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Oil companies challenge Biden's proposal to scale back drilling in western states


Oil prices have been pushed higher as the war in the Middle East continues. Those prices have renewed debate here in the U.S. over how much drilling should be allowed on federal land. The Biden administration had proposed dramatically scaling that back in Western states and is now finalizing new rules for a system that's been in place for a hundred years. But as NPR's Kirk Siegler reports, the reforms aren't sitting well in America's oil patch.

KIRK SIEGLER, BYLINE: Farmington, N.M., was built on fossil fuels. The first modern oil well drilled in the petroleum-rich Mancos Shale here in 1960 even has a nickname - Edna.

GEORGE SHARPE: Man, they were a long ways from anywhere when they got it up and drilled that well.

SIEGLER: Merrion Oil and Gas drilled it. Manager George Sharpe points to a historic photo of the towering well inside the company's airy lobby.

SHARPE: It took a lot more gonads than I got. So...

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SIEGLER: Today, the federal land around Farmington is dotted with tens of thousands of oil and gas wells. These helped New Mexico shatter a state record for crude oil production last year. The state now accounts for 13% of the country's total supply.

SHARPE: Most of the drilling in the Mancos Shale over the last five to six years has been in the oil window. But the real potential is in the gas window in northern New Mexico, southern Colorado.

SIEGLER: And there's a lot of untapped potential, Sharpe says. But the U.S. government is making it harder for small companies like his to explore for it. He's talking specifically about the Biden administration's new onshore leasing rule.

SHARPE: Let me read one of these things. This is actually...

SIEGLER: The proposed rule would do things like requiring companies to pay way more for new drilling permits on federal land and put up more money to cover cleanup costs should they go bankrupt later.

SHARPE: They really need to be focused on making sure we do it right, making sure the feds are getting what they deserve, making sure it's - you know, we're protecting the environment, but their stated goal on this is to make it harder and to have less of it.

SIEGLER: In Farmington, the timing of this rule is seen as ironic. New Mexico is now second only to Texas in oil production. But like the Biden administration, Democratic state leaders in Santa Fe have passed sweeping laws aimed at transitioning the state's economy away from fossil fuels. James Povijua sits on the governor's Sustainable Economy Task Force.

JAMES POVIJUA: Well, oil and gas is not going to be around forever, and I think that we need to take this opportunity to plan ahead.

SIEGLER: When he says opportunity, he means the state's $3.5 billion budget surplus, largely thanks to oil. He says it will help fund workforce training in solar and wind and help communities transition away from a dependence on the boom and bust of fossil fuels.

POVIJUA: What we heard from New Mexicans from around the state is that they really want to stay in their home communities, but there aren't jobs that can keep them there.

SIEGLER: Farmington, in the state's isolated northwest corner, has been dealing with this very problem. One massive coal power plant and mine recently shuttered, and another nearby on the Navajo Nation is in the process of closing as demand from the West Coast has tanked. Now, city leaders have been starting to market Farmington's public lands for something other than just fossil fuels - outdoor recreation.

UNIDENTIFIED CHILD: Yeah. I'll catch you guys.

SIEGLER: There's now a mountain bike park on federal land outside town, and another one is planned. They're also trying to lure more outdoor companies to manufacture products like rafts, hunting rifles or mountain bikes.


SIEGLER: Amy Conley coaches a local youth riding group here.

AMY CONLEY: I mean, we need something to keep people wanting to come this way now that the oil field is kind of decreased.

SIEGLER: Most of Conley's family worked in the oil field, and she wants to see her hometown keep thriving.

CONLEY: And there's tons of potential. I mean, we have the river. We have - I mean, just - we - it's there.

SIEGLER: There is hope that if the drilling really does slow down, maybe managers of the federal land here could at least devote more staff and money to building new campgrounds and trails and cleaning up abandoned wells that pockmarked the nearby canyons and badlands.

NATE DUCKETT: My name is Nate Duckett. I am the mayor of the city of Farmington.

SIEGLER: Mayor Duckett says that would help boost his town's outdoor recreation economy, but he doesn't think it should come at the expense of limiting drilling.

DUCKETT: You can't replace $100,000-a-year jobs that are in oil and gas with jobs in outdoor recreation. That doesn't work.

SIEGLER: There's anxiety here that towns like Farmington could be left behind, forgotten in a full-blown energy transition.

DUCKETT: I mean, if they stopped all production on federal lands, it would be awful for our area. Yeah, it would be decimating.

SIEGLER: The Biden administration's new drilling restrictions could be put into place by early next year.

Kirk Siegler, NPR News, Farmington, N.M. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

As a correspondent on NPR's national desk, Kirk Siegler covers rural life, culture and politics from his base in Boise, Idaho.