FILE - Texas oil rig

(The Center Square) – President Joe Biden's executive orders halting all new drilling permits on federal lands for 60 days and all leasing of federal land indeterminately will hurt the economies of a number of U.S. states, but perhaps nowhere more than New Mexico.

Rob Black, president and CEO of New Mexico Chamber of Commerce (NMCC), said the fallout from these orders are bad for everyone, but especially in New Mexico.

“The majority of our oil and gas activity is actually on federal land as far as revenue for the state,” Black told The Center Square. “Thirty-seven percent of the state of New Mexico is federal land, but if you look at Texas, it’s less than 2% federal land.”

The Permian Basin, which straddles New Mexico and Texas, is the biggest oil play in the country right now, Black said.

“What happens when you create a ban on oil and gas activity on federal lands, it doesn’t change the demand for that oil, it just changes who supplies it and who gets paid for it,” he said.

There are questions about whether these orders will be made permanent. As it is, the second moratorium doesn’t have a time limit, and if it lasts long enough, companies will shift resources to Texas where they can drill on private land, Black said. When New Mexico loses oil and gas business, public schools and other services lose funding, he said.

Besides Texas, demand will be met by Russia, China, Iran and Saudi Arabia – foreign producers who don’t come close to abiding by the strict environmental protections New Mexico companies do, Black points out.

Jim Winchester, executive director for the Independent Petroleum Association of New Mexico, agrees, saying in a statement that besides hardworking Americans, the environment is the real loser.

“The Biden administration has just accelerated climate change,” Winchester said, adding that those countries most hostile to the United States have been empowered.

“Our oil and gas producers report that these orders are the equivalent of dropping a bomb on their operations,” he said.

As one of the poorest states in the nation, New Mexico is in a challenging spot economically, Black said. He points out if these moratoriums were to last longer, those challenges would only grow.

A study done last December by the University of Wyoming indicates if the leasing and drilling ban on federal lands continued over five years, the state of New Mexico would lose close to $1 billion annually in tax revenue alone, Black said.