Oil workers in New Mexico fear they will lose their jobs and oil companies are rushing to secure drilling permits on federal lands ahead of the presidential election, which could result in Joe Biden winning who has promised to immediately ban new fracking on federal lands.
Many of the sweetest spots in the Permian left for drillers to profitably drill at $40 a barrel oil are located on the New Mexico side of the Permian. But most of New Mexico’s oil and gas production takes place on federal land, unlike in Texas.
Biden is not banning fracking overall, but he has said that he would move to ban new fracking activities on federal land.
Fracking on federal land is just 10 percent of the total U.S. fracking industry, but for New Mexico, it’s much more—65 percent of the state’s oil and gas production takes place on federal land, according to Reuters estimates.
The possibility of a Biden win in November has had many companies operating in New Mexico proactively securing months, and even years, worth of drilling permits on federal land before the election.
For the oil workers, a Biden win would mean fewer jobs – “It scares the heck out of us,” Jim Mayes, a foreman at S&J Contractors, told Bloomberg.
The New Mexico Oil and Gas Association (NMOGA) and the American Petroleum Institute (API) released earlier this month a new analysis warning that New Mexico would be among the states hardest hit by the proposal to ban federal land leases. New Mexico would lose over 62,000 jobs by 2022, according to the analysis.
“With nearly 40 percent of the state’s budget funded by natural gas and oil production, a ban could put at risk more than $1 billion of federal revenue sharing which helps support New Mexico’s education and conservation programs,” API and NMOGA said.
The oil industry in neighboring Texas also fears a President Biden. Texas oil and gas executives have a lot on their minds right now, but their worst fear for the next twelve months is neither the recession nor the pandemic—it’s the possibility that President Biden will win the White House.
According to a recent survey of the University of Houston’s Hobby School of Public Affairs among members of the Texas Oil and Gas Association (TXOGA), 76 percent of oil and gas executives in Texas say that the election of Joe Biden is the top threat to the economic well-being of their companies.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- The Debt Crisis Is Mounting For Oil Economies
- Shell May Cut Upstream Oil Operations By 40%
- Oil Bulls Return As OPEC+ Reassures Markets