Oct 29 (Reuters) - The Trump administration on Thursday will auction oil and gas leases on more than 7,000 acres in New Mexico, its last before a U.S. election that is expected to determine the future of drilling on public lands.
The U.S. Bureau of Land Management will offer 11 parcels on 7,731 acres via an online auction. The parcels overlay parts of the Permian Basin, the world’s biggest oilfield.
Drilling on federal lands is a crucial part of Republican President Donald Trump’s “energy dominance” agenda to maximize domestic production of oil and gas. His Democratic opponent in Tuesday’s election, former vice president Joe Biden, has vowed to ban new drilling permits on public lands as part of a plan to combat climate change and reduce reliance on fossil fuels. Given that promise, a Biden win would immediately cast into doubt the ability of holders of undeveloped parcels to drill those lands.
BLM, a division of the Department of Interior, has kept up a regular schedule of oil and gas auctions despite weak bidding at sales as the industry struggles with sharply lower demand and prices because of the coronavirus pandemic.
A two-day auction in New Mexico in August drew an average bid per acre of $169, well below the $1,386 per acre the state took in at a sale in February.
Thursday’s sale is being criticized by environmental groups who say oil and gas drilling in the area would threaten tourism at nearby Carlsbad Caverns National Park, big game habitat, undermine public health and increase greenhouse gas emissions that cause climate change.
Taxpayer groups have also said that holding sales at a time when the industry is struggling results in poor returns. (Reporting by Nichola Groom; editing by Grant McCool)
Our Standards: The Thomson Reuters Trust Principles.