OIL AND GAS

What would Biden do with Interior? Look to N.M.

This story was updated at 12:30 p.m. EST.

Democratic presidential nominee Joe Biden is said to be weighing a trio of New Mexican lawmakers to helm the Interior Department should he win the White House.

The potential battle to come — any nominee for Interior secretary would have to clear Senate confirmation — could show a dramatic pivot for the agency.

The former vice president has promised "day one" actions that include methane pollution limits and an end to new federal oil and gas leasing and permitting. His campaign has also floated a ban on hydraulic fracturing on federal lands, the common but controversial drilling technique more commonly known as "fracking." Biden's stance on the issue kicked off a political dispute with President Trump that has continued into the final days of the political race.

"Biden has vowed to abolish the entire U.S. energy industry, right?" Trump said in a hyperbolic statement in Michigan recently. "Guy went for a year and a half, 'no fracking, no fracking.' Then he goes to Pennsylvania, 'Of course we're going to frack.'" Biden has said that Trump is lying about his record and that his fracking ban would not extend beyond public lands.

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But should Biden win, experts say the choice of a New Mexican Democrat for Interior secretary could reflect the direction of the agency and reveal how far away from the energy dominance era the Biden administration wishes to go. The state in recent years has been a confluence of conflicting elements — a state budget dependent on oil money, concerns about methane emissions and electricity shifts — and the top 3 contenders for the job in a Biden administration have different interests and have not always been in complete lockstep on issues.

Just as the Trump administration inclusion of Interior's leadership with Alaskans supportive of oil and gas development showed up in policies, a New Mexican at the helm also would view the agency with a unique lens, according to Subhankar Banerjee, a professor of art and ecology at the University of New Mexico and editor of an anthology on the Indigenous movement in Alaska, "Arctic Voices: Resistance at the Tipping Point."

A leading contender for the position is Sen. Tom Udall, a 22-year veteran of Capitol Hill who has said he will not run for reelection when his senatorial term ends this year. His father, Stewart Udall, led the Interior Department under Presidents John F. Kennedy and Lyndon Johnson and sources have confirmed his likely interest in the post (Greenwire, Sept. 9).

Sen. Martin Heinrich's name has also come up, though less so. The avid outdoorsman has been an outspoken voice on environment and public land issues, like opposing oil leasing near the Chaco Culture National Historical Park — an UNESCO World Heritage site in northern New Mexico.

And there's also Rep. Deb Haaland, former chair for the New Mexico Democratic Party representing the state's 1st District. Haaland was one of the first Native women to represent her state in Congress when elected in 2018 and has quickly risen in prominence. She co-sponsored the progressive energy policy framework that's become a bellwether for progressive bona fides on energy, the Green New Deal (E&E Daily, Oct. 22).

"I just feel like our priorities are so messed up right now," Haaland told The Guardian last year during an interview in which she said she was "wholeheartedly" opposed to fracking and oil drilling on federal land.

These potential front-runners represent the breadth of the Democratic Party's relationship to fossil fuels and with the pick, a future President Biden would be making a decision about how far left to lean, said Joe Monahan, a longtime New Mexico politics observer and blogger.

"The battle over Interior" will be pitched between the more traditional energy and environment groups and progressives pushing for an aggressive climate policy, he said.

A painful fracking ban?

It was not a huge surprise when New Mexico Gov. Michelle Lujan Grisham, a Democrat who signed the 2019 Energy Transition Act committing New Mexico to hit 100% renewable energy by 2045, said she'd ask for a fracking-ban waiver, if a president were to institute one.

That was back before Biden won the Democratic presidential nomination and more progressive candidates like Sen. Bernie Sanders (I-Vt.) were pushing the party platform to the left. This year, Sanders helped the Biden campaign pen its climate commitments, including the elimination of carbon pollution from power plants by 2035.

But in New Mexico oil and gas is more integral to the political dialogue than a national campaign allows for. The state has seen a boom on federal and state land in recent years that's enhanced the portion of its budget coming from fossil fuels.

And a fracking ban would have a serious economic impact, even if it were to be relegated to federal lands as the Biden campaign has said it would be.

Energy proponents have argued the infeasibility of the ban, casting doubt on whether a Biden Interior could or would go so far.

In 2016, New Mexico's oil and gas revenue contribution to the state's general fund was roughly $1.6 billion, according to a tally by the New Mexico Oil & Gas Association (NMOGA). Last year, following a burst of oil and gas growth along New Mexico's southwestern border, much of that on federal land, that figure rose to $3.1 billion. A third of that funding goes to the K-12 school system in the state.

"Clearly the figures speak for themselves," said Robert McEntyre, NMOGA communication director, of how the Trump administration has expanding leasing opportunities and cut through administrative delays that helped the oil and gas sector.

"What the Interior Department has been able to do over the past couple of years in expanding and expanding development and really prioritizes domestic energy is a huge accomplishment that I don't think you can underestimate," he added.

The New Mexico boom has also poured money into federal coffers. A single oil and gas lease sale at the tail end of 2018, generated roughly a half-billion dollars for the U.S. Treasury, triple the revenue from the previous highest sale, a reminder that fossil fuel receipts are often the second-highest source of revenue for the federal government after taxes (Greenwire, Feb. 17, 2019).

McEntyre said it's too close to the election to "prematurely measure drapes," but should Biden win, that's the kind of value that's at stake.

A New Mexican helming Interior would hopefully be aware of the importance of oil and gas development, both for the state and the country, he said.

Western Energy Alliance President Kathleen Sgamma said her organization would be "very supportive" of a New Mexico Interior secretary or one from any Western state for that matter. She questioned Haaland's experience and whether the Udall family legacy justified the retiring senator being elevated to the post, but said Heinrich would likely be a good fit.

'A crucible'

While New Mexico remains a fossil fuel state, it also represents a shifting relationship to those fuels. With a New Mexico pick, the Biden team thus would also be choosing a secretary familiar with that shift.

"New Mexico is very much a crucible for the interwoven climate, environmental justice, and energy issues animating our country's policy discourse as a whole," said Erik Schlenker-Goodrich, whose work at the Western Environmental Law Center has tried to move federal oil and gas policy through the court, pressing Interior to more broadly consider the emissions impact of its decisions.

New Mexico has had to adjust to the declining market for coal power. For example, the San Juan Generating Station, a coal-fired plant in New Mexico's northwestern corner, is slated for closure in 2022, wiping away nearly 500 jobs in the rural area. The utility Public Service Company of New Mexico is replacing that power capacity with solar, wind and battery storage. The state has made funds available to help speed the energy transition in these cases, subsidizing new projects and helping with refinancing of early retirements of fossil fuel plants.

The coal sector's descent is part of a broader decline of fossil fuels in the era of climate change that groups like the Western Environmental Law Center say Interior will have to juggle, and very soon.

"It's here that all of the New Mexicans under consideration for Secretary of the Interior could prove most critical," Schlenker-Goodrich said in an email.

The oil and gas revenue dependence for New Mexico is a big part of the transition equation, he said, noting that it makes it difficult for the state to progress with big climate action and "provokes short-sighted thinking across the political spectrum."

But Udall, Heinrich and Haaland likely understand that and support the kind of federal initiatives that can address dependency — like supporting communities that rely on fossil fuels during transition, he said.

Regulatory redux

While the Trump administration's energy dominance era has been hallmarked by deregulation, New Mexico has often gone in the other direction over the last few years.

One of the Trump administration's earliest actions on energy policy was to attempt to undo the Bureau of Land Management's methane regulations. It halted developing standards for existing sources of methane pollution by EPA and revised the agency's standards for new sources of emissions.

The Biden campaign has promised to reverse that trend, with methane emissions an early commitment that the campaign has not wavered on. In New Mexico, the issue has been a focus in recent months.

The state's Four Corners, a historic gas play in the northwest corner of the state that's also home to historic coal power production, is a methane emissions hot spot identified by NASA researchers in 2016 and as drilling increased in the Permian Basin, so have emissions in the oil and gas play in New Mexico's southeast. A study earlier this year found that the Permian in New Mexico and West Texas may have a leak rate 60% higher than other region of the country (Energywire, April 23).

The New Mexico Oil Conservation Division is in the midst of penning new state standards. The state published a final proposal last month that would require the oil and gas industry to capture some 98% of its methane emission from production by 2026. The state's environmental department is advancing another proposal designed to work in concert with the new limits and address fugitive emissions. The New Mexico methane package could be among the stronger regulations in the country, though critics remain at odds with the state over broad exemptions as drafted.

Haaland, Heinrich and Udall have knowledge on this issue "in spades," said Jon Goldstein, a former Cabinet secretary at the New Mexico Department of Energy, Minerals and Natural Resources, and now a policy analyst for the Environmental Defense Fund.

"I think the methane issue is a really great one to point to," he said of what the New Mexico delegation could bring to Interior. "[They] have really been champions for strong federal action."

Trump, coal and Indigenous rights

Among the three New Mexico contenders, Haaland stands out as having more progressive policy stances on energy, said Banerjee, the professor of art and ecology at the University of New Mexico.

Her inclusion is a big deal to observers from the Indigenous rights and conservation movements, Banerjee added.

Banerjee's work on Indigenous land issues has been divided between Alaska's Arctic and New Mexico's desert, two areas he said are critical to the confluence of climate action, Indigenous rights and federal energy policy.

In early 2017, then-Interior Secretary Ryan Zinke said in an Anchorage press conference that Trump had called for energy dominance "and the only way that energy dominance is possible is through the great state of Alaska." Heavy Alaskan representation in the agency's leadership ranks filtered to policy, according to Banerjee.

One of the Trump administration's signature achievements, for example, was the completion of the first oil and gas program in the Arctic National Wildlife Refuge, a job designated to Interior by Congress in 2017. Biden has said he would fight to protect ANWR from development.

Referring to New Mexico and the Arctic, Banerjee said that "these two places matter," noting that the Arctic is warming at twice the rate the rest of the world due to the burning of fossil fuels and that as a state, New Mexico is also high on the list of fast-warming locations.

But, Banerjee said that while the energy dominance era expanded oil and gas's footprint, a grassroots movement was also growing in Indigenous communities, pointing to the explosion of interest in the Standing Rock Sioux Tribe protests in 2016 that drew crowds of Indigenous people from across the country and Canada to bar progress of the Dakota Access pipeline.

Haaland was present at the Standing Rock protest and has since promoted an "indigenized" Green New Deal, a lens that's also been highlighted by movements like the NDN Collective. The Green New Deal policy framework calls for the consent of Indigenous people for land decision that would affect them or their traditional territories.

"What New Mexico is doing is taking the Green New Deal and taking it to new heights," Banerjee said. "The reason for that is Rep. Haaland is a Pueblo woman. She grew up with Indigenous values and ways of life. That is who she is."

Indigenous rights — particularly when in opposition to energy development — have been championed by Udall and Heinrich as well, part of what Banerjee said is a growing respect for Indigenous movements at the political level.

In New Mexico, the issues have colored the debate over federal drilling projects near the Chaco Culture National Historical Park, a protected area in the center of a regional crossroads for ancient Puebloan society that is speckled with ruins outside current protective boundaries, according to local researchers.

Udall and Heinrich were instrumental in getting Interior Secretary David Bernhardt to place a one-year moratorium on leasing within a 10-mile buffer of the park, which will extend to the end of this year.

The Trump administration, however, has pressed forward with an updated resource management planning document that does not contemplate the 10-mile buffer Native American groups had sought, instead offering various strategies to reduce surface impacts near Chaco should drilling occur.

Heinrich, when the plan was published in March, called it "woefully inadequate" and not a reflection of the state's position.

Confirmation fights

Should Biden become the next president, his Interior secretary would have to a clear a confirmation process in the Senate, the composition of which is being determined today at the ballot box.

The likely confirmation battle could be a determining factor in who the presidential nominee would choose, said Monahan, the New Mexico blogger.

The senators have a better shot than Haaland, he argued.

Post-election, Biden may lean into someone he's more comfortable with personally, someone he has a history within the Senate, to take Interior's helm, he said.

"[Biden's] a longtime senator, he's older and so is Udall," said Monahan noting Udall's history of being able to work across the aisle.

Heinrich is less of a shoo-in, he said, but is also a senator, with personal relationships to make his progress easier.

Haaland may well get through confirmation should Biden win and choose her for the role, Monahan said, but with strong statements opposing fracking and oil development, her confirmation process on Capitol Hill would be a "firestorm."

Twitter: @hroxanerEmail: hrichards@eenews.net

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