[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
FEDERAL ENERGY PRODUCTION SUPPORTS LOCAL COMMUNITIES
=======================================================================
OVERSIGHT FIELD HEARING
before the
SUBCOMMITTEE ON ENERGY AND
MINERAL RESOURCES
of the
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
Monday, February 13, 2023, in Odessa, Texas
__________
Serial No. 118-3
__________
Printed for the use of the Committee on Natural Resources
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
or
Committee address: http://naturalresources.house.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
51-182PDF WASHINGTON : 2023
COMMITTEE ON NATURAL RESOURCES
BRUCE WESTERMAN, AR, Chairman
DOUG LAMBORN, CO, Vice Chairman
RAUL M. GRIJALVA, AZ, Ranking Member
Doug Lamborn, CO Grace F. Napolitano, CA
Robert J. Wittman, VA Jim Costa, CA
Tom McClintock, CA Gregorio Kilili Camacho Sablan, CNMI
Paul Gosar, AZ Jared Huffman, CA
Garret Graves, LA Ruben Gallego, AZ
Aumua Amata C. Radewagen, AS Joe Neguse, CO
Doug LaMalfa, CA Mike Levin, CA
Daniel Webster, FL Katie Porter, CA
Jenniffer Gonzalez-Colon, PR Teresa Leger Fernandez, NM
Russ Fulcher, ID Melanie A. Stansbury, NM
Pete Stauber, MN Mary Sattler Peltola, AK
John R. Curtis, UT Alexandria Ocasio-Cortez, NY
Tom Tiffany, WI Kevin Mullin, CA
Jerry Carl, AL Val T. Hoyle, OR
Matt Rosendale, MT Sydney Kamlager-Dove, CA
Lauren Boebert, CO Seth Magaziner, RI
Cliff Bentz, O RNydia M. Velazquez, NY
Jen Kiggans, VA Ed Case, HI
Jim Moylan, GU Debbie Dingell, MI
Wesley P. Hunt, TX
Mike Collins, GA
Anna Paulina Luna, FL
John Duarte, CA
Harriet M. Hageman, WY
Vivian Moeglein, Staff Director
Tom Connally, Chief Counsel
Lora Snyder, Democratic Staff Director
http://naturalresources.house.gov
------
SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES
PETE STAUBER, MN, Chairman
WESLEY P. HUNT, TX, Vice Chair
ALEXANDRIA OCASIO-CORTEZ, NY, Ranking Member
Doug Lamborn, CO Jared Huffman, CA
Robert J. Wittman, VA Kevin Mullin, CA
Paul Gosar, AZ Sydney Kamlager-Dove, CA
Garret Graves, LA Seth Magaziner, RI
Daniel Webster, FL Nydia M. Velazquez, NY
Russ Fulcher, ID Debbie Dingell, MI
John R. Curtis, UT Raul M. Grijalva, AZ
Tom Tiffany, WI Grace F. Napolitano, CA
Matt Rosendale, MT Vacancy
Lauren Boebert, CO Vacancy
Wesley P. Hunt, TX Vacancy
Mike Collins, GA
John Duarte, CA
Bruce Westerman, AR, ex officio
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CONTENTS
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Page
Hearing held on Monday, February 13, 2023........................ 1
Statement of Members:
Stauber, Hon. Pete, a Representative in Congress from the
State of Minnesota......................................... 1
Westerman, Hon. Bruce, a Representative in Congress from the
State of Arkansas.......................................... 3
Pfluger, Hon. August, a Representative in Congress from the
State of Texas............................................. 5
Statement of Witnesses:
Gallegos, David M., New Mexico State Senator, District 41,
Eunice, New Mexico......................................... 7
Prepared statement of.................................... 9
Ackerman, Doug, President & CEO, New Mexico Oil & Gas
Association, Santa Fe, New Mexico.......................... 10
Prepared statement of.................................... 11
Questions submitted for the record....................... 12
Bentley, Tracee, President and CEO, Permian Strategic
Partnership, Midland, Texas................................ 14
Prepared statement of.................................... 16
Additional Materials Submitted for the Record:
Gosar, Hon. Paul A., a Representative in Congress from the
State of Arizona, Statement for the Record................. 35
OVERSIGHT FIELD HEARING ON FEDERAL
ENERGY PRODUCTION SUPPORTS LOCAL COMMUNITIES
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Monday, February 13, 2023
U.S. House of Representatives
Subcommittee on Energy and Mineral Resources
Committee on Natural Resources
Odessa, Texas
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The Subcommittee met, pursuant to notice, at 3:19 p.m.
Central Time, in Room 1200, Henry Auditorium, Engineering
Building, University of Texas Permian Basin, Midland Campus,
11105 West Highway 191, Midland, Texas, Hon. Pete Stauber
[Chairman of the Subcommittee] presiding.
Present: Representatives Stauber, Tiffany, and Westerman.
Also present: Representative Pfluger.
Mr. Stauber. The Subcommittee on Energy and Mineral
Resources will come to order.
Without objection, the Chair is authorized to declare a
recess of the Subcommittee at any time.
The Subcommittee is meeting today to hear testimony on how
Federal energy production supports local communities.
Under Committee Rule 4(f), any oral opening statements at
hearings are limited to the Chairman and the Ranking Minority
Member.
I ask unanimous consent that the gentleman from Texas, Mr.
Pfluger, be allowed to participate in today's hearing and be
recognized for 5 minutes to deliver an opening statement.
Without objection, so ordered.
STATEMENT OF THE HON. PETE STAUBER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MINNESOTA
Mr. Stauber. Welcome to a new day in the House of
Representatives and, therefore, on the Energy and Minerals
Subcommittee. For the last 4 years, under Democratic control,
this Subcommittee has preached a ``keep it in the ground''
mantra, regardless of its world impact. And this mantra
includes banning lands from mineral development, arbitrarily
raising royalty rates, sidelining American workers at the
behest of the wealthy, and importing foreign energy and
minerals whenever possible.
But no longer. The Energy and Mineral Resources
Subcommittee will now focus on putting Americans back to work.
The Subcommittee will focus on traveling out of the Beltway and
into the parts of our great nation where we find these natural
resources. And that is why I am so pleased to have our first
hearing where it belongs, sitting right on top of the great
Permian Basin.
It will focus on reshoring our supply chains to prioritize
domestic sources of minerals. My great state of Minnesota, for
example, has unparalleled mineral wealth with currently
untouchable amounts of copper, nickel, cobalt, and platinum
group metals. And, no, domestic does not mean from across the
Atlantic or from across our northern border. Domestic means
domestic. Domestic means from our 50 states, plus the
territories.
The Subcommittee will also focus on boosting American oil
and gas development on our Federal lands and waters.
We have been endowed with the greatest resources in the
world. We can use them to keep costs down and leverage an
international geopolitical advantage.
It will focus on other issues as relevant, too, whether it
is permitting for energy transmission lines or removing
barriers to motivate energy technologies, such as geothermal
energy. But today, we are focusing on how oil and gas
development boosts our local communities.
This morning, we took a tour across the border into Lea
County, New Mexico. To date, the oil and gas industry has
contributed $51.1 million to Lea County alone for education.
And, more broadly, oil and gas development accounts for one-
third of New Mexico's general fund revenue--housing assistance,
public safety, food programs, transportation programs, health
care, and infrastructure, all of which are funded by oil and
gas receipts.
The Mineral Leasing Act is the law. That means that we must
issue oil and gas leases at least quarterly, and the benefits
of those lease sales and royalties at the state level means
more money for students, teachers, and our communities.
So, why has there been a significant hostility to
development in New Mexico since Joe Biden became President,
especially when it is such a boon for education? It is not the
same oil and gas find as West Texas, the Permian Basin, where
operators could easily follow the prescribed rules and
regulations.
Sadly, it is because my colleagues on the other side of the
aisle and this Administration choose ideology over the law. In
New Mexico, with such an expanse of Bureau of Land Management
land, the Federal Government permits by decree.
Government decides that oil and gas is going to end in 10
years. They won't issue a permit, or maybe they will issue a
permit for one parcel, but slow walk an easement for a pipeline
throughout another; or maybe the government decides a chicken
or a lizard needs to be added to the endangered species list.
There are countless ways for bureaucrats to slow walk a project
to death, just like they have in northern Minnesota, all of
which are methods to permit by decree.
Contrast this with Texas across the state line. In West
Texas, the Texas Railroad Commission permits by rule: You have
a proposal. You follow the rules. You receive your permits.
When permitting by decree, the Administration picks and
chooses winners or losers. And, unfortunately, even when
American operators do it the cleanest in the world and provide
tens of millions of dollars to schools, this Administration has
decreed that oil and gas operators must lose in New Mexico.
And this isn't the only case where the government picks
winners or losers. Just last month, Joe Biden chose to ban
mining in more than 225,000 acres of an industrial working
forest called the Superior National Forest, in the district
that I represent. It is the biggest copper-nickel find in the
world--95 percent of our nickel reserves, 88 percent of our
cobalt reserves, and over a third of our copper, and other
platinum group metals. Purely for political reasons, banned
mining in northern Minnesota.
But, just 41 miles north, in the very same watershed,
Canada permitted an open-pit gold mine in under 3 years. Joe
Biden decreed that my constituents are not allowed to mine
domestic critical minerals.
Meanwhile, miners in Canada simply followed their rules,
and they received a permit. It is wrong. It is misguided, and
it is time we hold them accountable.
With that, I look forward to this discussion today with our
three witnesses.
I now recognize the Full Committee Chair, Bruce Westerman,
for his opening statement.
STATEMENT OF THE HON. BRUCE WESTERMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARKANSAS
Mr. Westerman. Well, thank you, Pete.
Good afternoon to everyone.
August, it is an honor to be here in your district again.
The last time I was here, it was you and I, and then Leader
McCarthy, who is now Speaker McCarthy. And that cold day when
we had that press conference outside, we were laying the
groundwork for this meeting today. We were talking about
American energy independence. We were talking about cutting
supply lines that depended on China and Russia and foreign
adversaries. And that was part of the making of a commitment to
America.
And this is like Step No. 2 or No. 3 in the commitment to
America. And we have a long ways to go to make sure that
America is energy independent, that we are not relying on
foreign allies, or foreign adversaries, for the things that we
have to have to keep our economy functioning and to keep
Americans safe.
It is great to have Pete here. He is the Chairman of the
Energy and Minerals Subcommittee that deals under the guise of
the Natural Resources Committee on all things energy and
minerals--onshore, offshore mining.
And Tom Tiffany, who is the Chair of the Federal Lands
Subcommittee, and deals with the tremendous amount of issues
and natural resources under Federal lands. We also deal with
water and wildlife, and the Endangered Species Act, NEPA. All
those things fall under the jurisdiction of our Committee. And
energy production starts under the jurisdiction of this
Committee.
As I mentioned earlier, Cathy McMorris Rodgers, the
Chairman of the Energy and Commerce Committee, will be here
Thursday for another hearing where they will talk about the
hurdles that Americans are facing downstream in refining and
processing and getting the permits on those downstream
manufacturing and processing areas that are so critical to
creating even more jobs and even more national security.
Last week, we had a hearing in DC. We titled it
``Unleashing America's Energy Potential,'' and it shined a
light on the policies that are preventing us from achieving
those goals today. And our goal is to make sure that we are
using the tools of the Federal Government to somehow get the
bureaucrats off of dead center so that they will do their job
to issue permits.
It doesn't make sense when you go out and talk to folks in
the field and you ask them, is there any difference between a
permit that was obtained in a relatively short period of time
through a state permitting agency versus a permit obtained over
a long period of time through the Bureau of Land Management?
And I have had people tell me for years, over and over: You
can't go out and look at a project completed under a state
permit and a Federal permit and tell any difference to the
environmental restrictions and the guidelines to the quality of
the project. It all ends in the same result.
So, as Federal policymakers, we have to ask the question
are America's tax dollars best being spent by these Federal
bureaucracies that aren't producing results? They are becoming
more of a hindrance instead of part of the solution. We don't
want the Federal Government to be part of the problem. We want
the Federal Government to be part of the solution. And it is
under our power to put those policies in place and I believe
ultimately to use the power of the purse to make sure that
those policies are implemented.
There is no reason, no reason whatsoever, that the
President of the United States should ever go to Saudi Arabia
or Venezuela or, God forbid, Russia, or any other place to ask
them to make up the supply of energy that we could be producing
here at home. There should never be another time in our future
when the President of the United States depletes our Strategic
Petroleum Reserve to lower prices instead of focusing on the
real economic issue, and that is low supply.
We have to increase supply so that we don't see these
inflationary costs and these instances where we have fuel
prices at the pump going through the roof. And we know that
transportation fuel is only part of it. Natural gas is one of
the cleanest burning, most efficient burning fuels on the
planet. Because we have been able to utilize a lot of natural
gas, America has been able to lower our greenhouse gas
emissions more than the top 12 countries in the Paris climate
accords combined.
Natural gas produced in the United States, one report
shows, is 41 percent cleaner than natural gas produced by
Vladimir Putin. You have a lot of oil in the Permian Basin. You
have a lot of gas in the Permian Basin. But the largest deposit
of natural gas on the planet is in the Marcellus and Utica
Shale play out in Pennsylvania. Yet, we can't build pipelines
up to New England.
And, when all this was going on with Russia and people were
talking about us buying energy from Russia, we were buying
liquefied natural gas, bringing it into the Port of Boston to
supply gas to New England residents instead of building
pipelines from Pennsylvania to New England.
That just plain doesn't make sense, and it shouldn't be
that way. It shouldn't require Congress having to have hearings
and pass laws to do the right thing. But, if that is what it
takes, I know that there are three other gentlemen here and
about 220 or 218 more in Washington, DC that are wanting to do
the same thing--to put common sense back into the equation, to
look out for America's needs and America's resources, and to
also do this in a way that generates wealth and provides
American jobs instead of shipping our jobs overseas.
So, I thank the witnesses that are here today. I enjoyed
reading your testimony. I look forward to hearing your oral
testimony and then having a chance to ask questions and to find
out more about these issues so that it can inform us to write
legislation that we should be marking up and passing out of the
House in early March. And, hopefully, you will see a broad
energy package coming out of the House of Representatives by
the end of March to address these issues.
And I really believe we will get some bipartisan support
and even some bicameral support in the Senate, because
Americans are tired of having to depend on other countries and
not have the national security and having to front the huge
cost for energy.
Mr. Chairman, I will yield back.
Mr. Stauber. Thank you, Mr. Westerman.
The Chairman now recognizes the gentleman from Texas, Mr.
Pfluger, for 5 minutes to deliver an opening statement and to
introduce our witness from Texas, Ms. Bentley.
STATEMENT OF THE HON. AUGUST PFLUGER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Pfluger. Thank you very much to the entire Committee on
Natural Resources, Chairman Westerman, and my colleagues from
Minnesota and Wisconsin, for being here. It is very important
that we have a hearing here in the Permian Basin, Odessa,
Texas, talking about the issues.
I would like to specifically thank University of Texas
Permian Basin to be able to pull together a hearing. Dr. Sandy
Woodley, the entire staff here, thank you; Ector County Judge
Dustin Fawcett; the Mayor of Odessa, Texas, Javier Joven; and
the President of the Chamber of Commerce, Renee Earls, thank
you for being here, for your support, and so many others--
Sheriff Mike Griffiths, and so many others that are here.
The hearing was open to all members of the Committee,
Republican and Democrat. And I think what is telling right now
is that we want to have this bipartisan discussion. We want to
talk across the aisle to our colleagues about the issues that
we are facing, because this should not be a partisan issue to
put energy in an inexpensive, reliable form that every American
family can enjoy, that increases our economic prowess, that
helps our national security, that we are able to deliver across
the ocean to places like Ukraine or other countries that are
being threatened or held hostage by adversaries or would-be
adversaries. This should not be a partisan discussion. We
should be able to come together.
And it is disappointing to see a lack of participation in a
field hearing like this. If you are willing to attack this
industry, then come out and see it. And we have invited those
Members that do. And I think that is important to note, that we
don't have those folks showing up right now.
But we do have folks showing up that want to make a change,
that want to talk about the very issues that you have just
heard. When you look at the Permian Basin, Texas is lucky to be
on the private side. But, today, we are probably going to spend
some time talking about the Federal lands side.
And my very first piece of legislation in Congress, H.R.
218, talks about preventing the Biden administration from
placing a moratorium on Federal leasing, or drilling, or the
permitting of pipelines. That was in advance of President Biden
taking the oath of becoming President. That was in the first
week of January 2021, because we knew, based on his campaign
promises, that he was going to attack the industry, and here we
are.
So, while Texas is lucky, other parts of the United States
do have to go through the Federal permitting, and that is one
of the things that we need to talk about today. When you are
looking to supply energy needs for America, President Biden's
first call should have been, his first visit should have been,
to Odessa, Texas, not Saudi Arabia. He shouldn't have called
Putin or Venezuela. He should have come right here to the
Permian Basin to ask what the producers here, what all of you
in this room and throughout this community can do.
Globally, the share of crude oil production coming from the
Permian has grown 1 percent in 2007 to nearly 6 percent--in
2007 to 6 percent. At one point in late 2019, early 2020, this
region was doing almost 14 percent, 15 percent of global
production on a daily basis, 13-plus million barrels a day.
That is increasing economic security, not just for the United
States of America, but for our allies. That is increasing the
jobs that every community has, the 10 million Americans who
participate in this industry.
And the fact is that the Permian Basin is the largest
secure supply of oil and gas in the entire world and remains a
safe harbor of stability and opportunity. And, by investing in
the Permian Basin, America is investing in our own future.
It is my pleasure to introduce you to the witness from the
Permian Basin, Tracee Bentley, who is an incredible leader in
charge of the Permian Strategic Partnership, with a membership
of 19 companies, a model for what private partnerships with
public entities can do--by investing in our education, by
investing in health care, by investing in infrastructure
needs--not just right here in Midland and Odessa but also into
New Mexico, by taking private dollars and putting them to work
so that families can enjoy high-quality education and high-
quality health care, and that they can have a safe transit and
a safe commute, that our roads and our bridges and our highways
are safe.
Tracee brings a wealth of knowledge, coming to us from
Colorado prior to this and running a large trade organization
responsible for encouraging investment in the energy industry
inside New Mexico.
I know that we are going to be very, very happy and pleased
to hear her testimony. And I can't wait to hear the questions
asked because, when it comes to the communities, the
investments that those communities are making into energy
security, which is a national security issue, nobody knows this
better than Tracee Bentley, and nobody knows it better on the
impact that it has on every American family who decides to take
this up as a career, to put food on the table and to put their
kids through college and raise their families than Tracee
Bentley.
Mr. Chairman, thank you for coming to the Permian Basin.
Thank you for coming to Odessa, Texas.
I yield back.
Mr. Stauber. Thank you, Representative Pfluger.
Now I am going to introduce our other witnesses: The
Honorable David Gallegos hails from Eunice, New Mexico, and
represents the 41st District in the New Mexico State Senate.
Mr. Doug Ackerman is from Santa Fe, New Mexico, and serves
as the President and CEO of the New Mexico Oil & Gas
Association.
Let me remind the witnesses that under Committee Rules,
they must limit their oral statements to 5 minutes, but their
entire statement will appear in the hearing record.
We use timing lights. When you begin, the light will turn
green. When you have 1 minute left, the light in front of you
will turn yellow. And, at the end of 5 minutes, the light will
turn red. I will ask you to please complete your statement by
that time.
I will also allow all witnesses on the panel to testify
before Member questioning.
The Chair now recognizes Senator Gallegos for 5 minutes.
STATEMENT OF DAVID M. GALLEGOS, NEW MEXICO STATE SENATOR,
DISTRICT 41, EUNICE, NEW MEXICO
Mr. Gallegos. Thank you, Mr. Chair.
Thank you, Chairman Westerman, Subcommittee Chairman
Stauber, and honorable Members. It is an honor to be here today
to testify before you and to discuss the significant
contributions that onshore Federal oil and gas production
provides for my community in southeast New Mexico.
My name is David Gallegos. I am honored to serve on the New
Mexico State Senate, District 41, and previously served in the
New Mexico House of Representatives. And, during my tenure in
the State legislature, I have had the privilege of representing
Eddy and Lea County in southeastern New Mexico. And that is the
heart of the oil and gas country in New Mexico.
As the second highest oil producer in the nation, New
Mexico continues to play a vital role in our nation's push for
energy independence. Reducing our reliance on foreign countries
that often fail to meet our environmental standards in energy
production is more important than ever. And I am proud that New
Mexico has become the leader in providing cleaner, safer, more
reliable, and affordable energy through the use of oil and
natural gas production.
In Fiscal Year 2022, the oil and gas contributed $10.8
billion to our state and local coffers, which was more than
double the previous high in Fiscal Year 2021. Annually, oil and
gas contributions make up the average of one-third New Mexico's
state budget, and the recent record-level revenues were
accomplished despite harmful reductions by the Biden
administration.
And, according to data that was provided by Energy in Depth
New Mexico, the Obama and Trump administrations held an average
of 3.25 and 3.5 lease sales in New Mexico per year
respectively, and, as President, the Biden administration has
only held a schedule or a total of two sales with current
average of 0.67 lease sales per year. Even if the Biden
administration were to hold three sales in 2023, we will have
only offered the average of 1.7 lease sales per year in New
Mexico. This is significantly less than the Obama and Trump
administration.
Despite these facts, I am proud to share that, in my home
county, Lea County, it is rated as the No. 1 county in the
nation for oil production. This production has led to historic
funding for public schools locally and throughout the state.
Roughly one-third of the state's public education funding is
derived from the oil and gas, providing $1.4 billion annually
to support our students and teachers.
As a longtime school board member of the Eunice Public
School District, they allow us to, and I apologize, be the
beneficiary--so Lea County is beneficiary of $48.7 million for
our public schools. That was in Fiscal Year 2022. And it
supports 14,793 students and 1,343 teachers that reside in my
district.
This funding aids our teachers, our students--our student
tenants in actually adding the needs for the most at-risk
students. And these allow us to produce an education for our
students that are beyond what the capability is of the district
alone.
These figures are more than $283 million, which was
provided by the industry to New Mexico's higher education, and
it is clear that the oil and gas not only is funding our
current needs, but our future needs and our successes.
Unfortunately, the Biden administration's position on
energy jeopardizes those very dollars and risks the quality of
life for my family and my constituents.
Oil and gas production from public lands accounts for
roughly one-fourth of the annual U.S. production, and limits on
the Federal drilling disproportionately impacts New Mexico,
which depends heavily on the revenue from our share of the
extraction royalties. Any significant revenue reduction caused
by the imposing production limits would result in catastrophic
cuts to our public schools, our infrastructure, our public
safety, and New Mexicans' health.
At a time when New Mexico ranks below the national average
on economic opportunity, the oil and gas industry provides more
than 134,000 New Mexicans with high-paying jobs. Meanwhile, the
revenue received by the state supports construction maintenance
of our roads, highways, and helps put officers in our
communities to help keep us safe.
The positive impacts of oil and gas can be seen each day,
it being with the school bus driving our kids to and from
school, our clothes we wear, the technology in our classroom,
and the workforce we use, our everyday necessities, and the
affordable and reliable energy is heating the homes of my
constituents, their families. It is time for both the state and
Federal Government to work together in adopting an all-energy
policy, for traditional fossil fuels and alternative energy to
be included in a comprehensive effort to secure our nation's
energy.
I appreciate the opportunity to speak here today, and I am
standing ready to work with you to make an effort a reality.
Thank you.
[The prepared statement of Mr. Gallegos follows:]
Prepared Statement of David M. Gallegos, New Mexico State Senator,
District 41
Chairman Westerman, Subcommittee Chairman Stauber, and Honorable
Members, thank you for the opportunity to testify today and discuss the
significant contributions of onshore federal oil and gas production to
my state and community.
My name is David Gallegos and I am honored to serve in the New
Mexico State Senate for District 41. I previously served in the New
Mexico House of Representatives, and during my tenure in the State
Legislature, I have had the privilege of representing Eddy and Lea
counties--the heart of oil and gas country in New Mexico.
As the second highest oil producer in the nation, New Mexico
continues to play a vital role in our nation's push for energy
independence. Reducing our reliance on foreign countries that often
fail to meet our environmental standards in energy production is more
important than ever, and I am proud that New Mexico has become a leader
in providing cleaner, safer, more reliable, and affordable energy
through oil and natural gas production.
In Fiscal Year 2022, oil and gas contributed $10.8 billion dollars
to our state and local coffers, more than double the previous high in
Fiscal Year 2021.\1\ Annually, oil and gas contributions make up an
average of one-third of New Mexico's state budget, and the recent
record-level revenues were accomplished despite the harmful
restrictions by the Biden administration.
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\1\ New Mexico Oil & Gas Association. (2022). Fueling New Mexico.
Retrieved from https://assets.nationbuilder.com/nmoga/pages/98/
attachments/original/1672930489/Fueling_New_Mexico
_Report_Low_Res.pdf?1672930489
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According to recent data provided by Energy in Depth New Mexico:
``[T]he Obama and Trump administrations held an average of 3.25
and 3.5 lease sales in New Mexico per year, respectively, as
President, while the Biden administration has only held or
scheduled a total of two sales, with a current average of 0.67
lease sales per year. Even if the Biden administration were to
hold three lease sales in 2023, it will have only offered an
average of 1.7 lease sales per year in New Mexico--
significantly less than the Obama and Trump administrations.''
\2\
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\2\ Energy in Depth New Mexico. (2022, November 14). Retrieved from
https://www.energyindepth.org/president-bidens-comments-on-federal-
lands-leasing-in-new-mexico-are-disconnected-from-reality/
Despite these facts, I am proud to share that my home county, Lea
County, is the number one county in the nation for oil production.\3\
This production has led to historic funding for our public schools
locally and throughout the state. Roughly one-third of our statewide
public education funding is derived from oil and gas production,
providing $1.4 billion dollars annually to support our students and
teachers.\4\ As a longtime school board member for Eunice Municipal
Schools, I would note that Lea County was the beneficiary of $48.7
million dollars for our public schools in Fiscal Year 2022, which
supports 14,793 students and 1,343 teachers in my district.\5\ This
funding aids our school leaders as they diligently work to address the
needs of New Mexico's most at-risk students. Add to these figures the
more than $283 million dollars provided by the industry to New Mexico
higher education, and it is clear that oil and gas is not only funding
our current needs, but our future successes.
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\3\ (2020, March 27). Retrieved from Hobbs News-Sun: https://
www.hobbsnews.com/2020/03/27/lea-county-is-nations-no-1-oil-producer/
\4\ New Mexico Oil & Gas Association. (2022). Fueling New Mexico.
Retrieved from https://assets.nationbuilder.com/nmoga/pages/98/
attachments/original/1672930489/Fueling_New_Mexico
_Report_Low_Res.pdf?1672930489
\5\ Ibid.
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Unfortunately, the Biden administration's position on energy
jeopardizes those very dollars and risks the quality of life for my
family and my constituents. Oil and gas production from public lands
accounts for roughly one-fourth of annual United States production, and
limits on federal drilling disproportionately impact New Mexico which
depends so heavily on revenue from our share of extraction royalties.
Any significant revenue reduction caused by imposing production
limitations would result in catastrophic cuts to our public schools,
infrastructure, public safety, and health.
At a time when New Mexico ranks below the national average in
economic opportunity, the oil and gas industry provides more than
134,000 New Mexicans with high-paying jobs. Meanwhile, the revenue
received by the state supports the construction and maintenance of our
roads and highways, and helps put more officers in our communities to
keep us safe.
The positive impacts of oil and gas can be seen each day, be it the
school buses driving our children to and from school; the clothing we
wear; the technology in the classroom and workforce we use; our
everyday necessities; and the affordable and reliable energy that is
heating the homes of my constituents and their families. It is time for
both state and federal governments to work together to adopt an all-
energy policy where traditional fossil fuels and alternative energy can
be included in a comprehensive effort to secure our nation's energy
future. I appreciate the opportunity to speak today and I stand ready
to work with you to make such an effort a reality.
______
Mr. Stauber. The Chair thanks the witness for his
testimony.
The Chair now recognizes Mr. Ackerman for 5 minutes.
STATEMENT OF DOUG ACKERMAN, PRESIDENT & CEO, NEW MEXICO OIL &
GAS ASSOCIATION, SANTA FE, NEW MEXICO
Mr. Ackerman. Chairman Westerman, Subcommittee Chairman
Stauber, distinguished members of the Committee, on behalf of
the 400-plus members of the New Mexico Oil & Gas Association,
first and foremost, thank you for being here, thank you for
your support, and thank you for having us here.
New Mexico is the second largest oil-producing state in
America. Our industry continues to provide the energy people
need to live their lives. Through innovation, technology, and
the industry's ability to exceed environmental standards, New
Mexico operators supply our nation and world with cleaner, more
affordable oil and natural gas energy.
Because of our prolific Permian and San Juan Basins and a
dedicated workforce of 134,000 strong, New Mexico operators
produced another record-breaking year, and the industry remains
the No. 1 source of revenue in the state budget of New Mexico.
New Mexico's oil and gas industry generated over $63.3
billion in oil and gas revenue in Fiscal Year 2022, an increase
of 132 percent, which generated a record $10.8 billion in state
and local revenue this past year; $5.8 billion goes to the
state general fund, 5 billion to the other state and local tax
revenues, reserve fund, and permanent fund. The growth will
have an unprecedented impact on the state of New Mexico during
this fiscal year.
The $5.8 billion to the state's general fund equates to
about 35 percent of the New Mexico State budget, a contribution
the oil and gas industry has achieved consecutively since
Fiscal Year 2014.
With the growth of our industry, these funds ensure New
Mexico will have the resources to invest in our children's
education. Our oil and gas industry revenues supported $1.4
billion for public and higher education operating budgets, as
well as an additional $268 million in new capital outlay
spending for public school construction and renovation. Our oil
and gas industry funds also support vital infrastructure, such
as the construction of new roads and highways, which keep New
Mexicans and our supply chains moving.
Our funds also help New Mexico put more first responders
and public safety officers on the street, helping to keep our
communities safer.
From Raton to Las Cruces and Gallup to Tucumcari, the
positive impact of our industry is tremendous for all New
Mexicans. This fiscal and economic leadership goes hand in hand
with environmental stewardship and the protection of our
state's natural resources. Our operators around the state are
consistently working to ensure the oil and natural gas produced
here is cleaner, safer, and more environmentally sound than
anywhere else in the world.
We are your neighbors. We take great pride in working
together and giving back to our communities to help make them
stronger and better for all of our families.
With energy demand increasing around the world, our
industry workforce remains strong, committed to providing the
energy America needs while moving New Mexico forward. Energy
produced here is vital to our national security.
Thank you for your time.
[The prepared statement of Mr. Ackerman follows:]
Prepared Statement of Doug Ackerman, President & CEO,
New Mexico Oil & Gas Association
New Mexico is the second-largest oil producing state in America.
Our Industry continues to provide the energy people need to live their
lives. Through innovation, technology, and the industry's ability to
exceed environmental standards, New Mexico operators supply our nation
and the world with cleaner, more affordable oil and natural gas energy.
Because of our prolific Permian and San Juan Basins and a dedicated
workforce of over 134,000 statewide, New Mexico operators produced
another record-breaking year and the industry remains the #1 source of
revenue in the state budget of New Mexico. New Mexico's Oil and Gas
Industry generated over $63.3 billion in oil and gas revenue in FY22,
an increase of 132 percent from FY21, which generated a record $10.8
billion in state and local revenue this past year ($5.8 billion to the
state's general fund and $5 billion to other state and local tax
revenues, reserve fund and permanent fund.) The growth will have an
unprecedented impact on the state of New Mexico during this fiscal
year.
COMMUNITY IMPACT:
The $5.8 billion to the state's General Fund equates to about 35%
of New Mexico's state budget, a contribution the oil and gas industry
has achieved consecutively since FY14.
With the growth of our industry, these funds ensure New Mexico will
have the resources to invest in our children's education. Our Oil and
gas industry revenue supported $1.4 billion for Public and Higher
Education operating budgets as well as an additional $268 million in
new capital outlay spending for public school construction and
renovation.
Our Oil and Gas Industry funds also support vital infrastructure
such as the construction of new roads and highways which keep New
Mexicans and our supply chains moving. Our funds also help New Mexico
put more first responders and public safety officers on the streets,
keeping our communities safer.
ENVIRONMENTAL STEWARDSHIP:
From Raton to Las Cruces and Gallup to Tucumcari, the positive
impact of our industry is tremendous for all New Mexicans. This fiscal
and economic leadership goes hand in hand with environmental
stewardship and the protection of our state's natural resources. Our
operators around the state are constantly working to ensure that the
oil and natural gas produced here is cleaner, safer, and more
environmental sound than anywhere else in the world.
We are your neighbors and take great pride in working together and
giving back to our communities to make them stronger and better for our
families.
With energy demand increasing around the world, our industry
workforce remains committed to providing the energy America needs while
moving New Mexico forward. Energy produced here is vital to our
national security.
______
Questions Submitted for the Record to Doug Ackerman, President & CEO,
New Mexico Oil & Gas Association
Questions Submitted by Representative Westerman
Question 1. The small BLM office in Carlsbad, New Mexico receives
approximately one-third of all applications for permit to drill
submitted to the Bureau of Land Management. A recent GAO report (GAO-
20-329) stated that the APD approval time decreased nationally from 196
days in May 2016 to 94 days in June 2019. This dramatic decrease was
largely in due to BLM field offices prioritizing APDs for review under
the Trump administration. APD approvals are again approaching 300-day
delays, with some operators waiting years for approval.
1a. Do you think that BLM headquarters should allow and encourage
BLM field offices with excessive APD delays to prioritize APD approval
by working proactively with the private sector to ensure the necessary
information is submitted and reviewed in a timely manner to comply with
the 30 day deadline for APD approval in the Mineral Leasing Act?
Answer. Absolutely. While the permitting staff in the Carlsbad
Field Office (CFO) attempts to prioritize permitting needs of those
member companies of ours who pursue direct engagement with the office,
the average number of days an application for permit to drill (APD)
remains pending until final approval from the CFO is currently
averaging around 500 days. Moreover, our members are forced to
logistically manage their rig lines while dealing with a number of
``overdue'' permit instances in which the CFO surpasses the 700+
pending days threshold prior to their approval. Any encouragement or
additional effort made by BLM headquarters to facilitate additional
prioritization between their field offices and the private sector to
ensure necessary information is reviewed in a timely manner would be
extremely beneficial to our members.
It is important to note that the industry is doing our part to
ensure these APDs are submitted complete by participating in workgroups
to standardize the APD (this was done in the past & we are trying to
get another workgroup together with CFO). Some items inside the APD are
left to the Authorized Officer for interpretation. Certain NRS (Natural
Resource Staff) ask us to complete the APD in AFMSS 2 then add several
attachments at the end of the APD for their review while others only
require the necessary attachments required for AFMSS 2. NRS staff seem
to focus on different goals, ex. one may not require cut/fill diagrams
while another will require it. The goal of AFMSS 2 was to make a
standard APD that anyone in the county could approve so that other
field offices could assist with approving APDs. Industry provides 3rd
party surveys for several of the specialists, cave/karst, botany,
archaeology, and any other that is required by BLM. This is costly for
industry but is a requirement for BLM to approve APDs so we pay it.
1b. Do you think BLM headquarters should consider a reallocation of
resources and staff to local BLM field offices with excessive APD
delays to alleviate permitting backlogs?
Answer. Certainly. In fact, a review of the Automated Fluid Mineral
Support System (AFMSS 2.0) data suggests that other state/field offices
with a disproportionately lower volume of APD's submitted per rig line
operating in their respective region(s), have been able to process
APD's with greater efficiency. Therefore, an extensive review of
personnel and subsequent reallocation of resources to those field
offices such as the CFO with excessive APD delays (even in the form of
a temporary strike team and/or remote personnel support given the
digital permit processing system) would be highly beneficial to our
member companies. This could alleviate many of the 3rd party surveys.
Additionally, AFMSS is routinely down or encounters errors that lead to
prolonged and unnecessary delays in processing permits. Investing in
the technology/infrastructure behind the AFMSS platform to keep it
functioning at the highest levels would be beneficial.
Question 2. What else can the BLM and Congress do to address
permitting backlogs and ensure permits are issued in a timely manner?
Answer--
A. Ensure Utilization of Congressionally Directed NEPA
Efficiencies--Congress should ensure that the original intent of
Section 390 of the Energy Policy Act of 2005 is realized by expressly
directing those categorical exclusions be utilized for projects meeting
the specified criteria, and strictly limit when an agency may decline
their use. Congress specified that certain activities were to be
excused from burdensome (or duplicative) NEPA requirements because they
were determined to not have a significant effect on the human
environment (e.g. drilling on existing well pads). In practice, BLM
frequently declines to utilize these Congressionally directed
efficiencies, although a high rate of submitted APD's would meet one of
the five statutorily codified exclusions. Furthermore, given existing
impediments to the express authorizations of these previously codified
exclusionary criteria, BLM headquarters should develop clear and
concise Guidance that honors the intent of Congress in defining these
instances and encourage a rollout and implementation plan with each
field office in which they're tasked with adhering to such.
B. Overhaul the existing Office of personnel Management (OPM)
onboarding process to ensure streamlined reallocation and recruitment
of human resources within the Bureau of Land Management-Currently, it
is NMOGA's understanding that approximately 35% of approved positions
throughout the state of Nex Mexico's BLM field offices remain unfilled
due to archaic background review and onboarding processes taking up to
two years, on average, to fill announced and published roles. Should
this Congress or Administration wish to achieve energy prosperity for
the country moving forward, regardless of what energy forms (fossil or
non) you may support, we will have to instill efficiencies in the
onboarding process to appropriately staff the agency for adequate
permit processing. This may also include consideration of unique
incentives to incentivize and attract field specialists (e.g.
archeologists, botanists and biologists) to certain regions, along with
the consideration of ``remote'' employee retention to support digital
processing of permits.
C. Mitigate Unnecessary Delays Caused by NEPA Litigation--Congress
should change the standard for judicial review of NEPA determinations
by amending NEPA to only allow courts to set aside agency
determinations for reasons of abuse of discretion and/or allow agency
determinations to stand if they are in substantial compliance with
NEPA. Congress should also limit standing to challenge NEPA
determinations by adopting modest, but clear thresholds, for parties to
establish standing to challenge agency determinations under NEPA and
associated agency actions.
D. Streamlining APO Permitting--To decrease unnecessary burdens on
BLM resources and improve the administration of APO permitting,
Congress should enact the following statutory provisions:
i. Require BLM to develop regulations to allow APDs to be
issued through provisional permitting (permitting-by-rule); and
ii. Require that APDs be issued for a minimum of four years,
instead of two years with the potential for a two-year
extension; and
iii. Automatically extend APO terms throughout the full
duration of any litigation challenging the APO and BLM
corrective action.
E. Clarify BLM's Limited Discretion to Defer Lease Sales--Congress
should clarify that the MLA substantially limits BLM's authority to
defer oil and natural gas lease sales and confirm that BLM must conduct
lease sales at least quarterly. Congress should clarify that the MLA
only allows BLM to cancel or suspend a specific lease sale if doing so
would violate a clear statutory requirement or obligation.
Additionally, Congress should clarify that the Interior Secretary shall
issue the leases to the winning bidder within 60 days of auction, with
no delays allowed for protests or other analysis before the acreage is
issued. The Secretary shall issue the lease, not put it into suspension
or place it under a hold until protests are resolved. Once the parcel
is offered at sale, the protest is deemed cleared.
Question 3. How can this administration encourage companies to
reinvest capital in exploration to increase production and drive down
oil and natural gas prices?
Answer. Amidst the global backdrop of high energy prices and
skyrocketing inflation, the Biden administration should ensure it's
doing all it can to support continued access to produce oil and natural
gas on federal lands. The US Department of the Interior should hold
regular lease sales, as statutorily required by the Mineral Leasing
Act. Additionally, permits and Application for Permit to Drill (APO)
should be approved in a timely manner. The Biden Administration's
historically low federal acreage reduction in leasing, along with its
myriad of new regulations, coupled with the omnipresent risk of
litigation, create serious challenges for operators working to
responsibly develop federal mineral resources. To ensure NMOGA's
members can meet growing energy demands, Congress should promote
infrastructure development and reform the permitting process.
Streamlining the National Environmental Policy Act (NEPA) process and
ending obstruction of oil and natural gas projects in the permitting
process will spur project investment in energy infrastructure. And
lastly, NMOGA member companies need regulatory certainty. While our
members often exceed federal regulatory standards as part of their
efforts to operate safely and efficiently, certainty is key to
deploying capital and we respectfully request that this Administration
ensures federal regulations are technology-neutral, flexible, cost-
effective, and not duplicative of other federal and state regulations.
Approve more APDs & ROWs. APDs receive much of the attention but ROWs
are just as important to produce wells without flaring/venting. ROWs
cut down on truck traffic which also reduces emissions and allows for
safer travel. Industry is being asked to perform 3rd party environment
assessments for the BLM to help speed up approval times.
______
Mr. Stauber. I thank the witness for his testimony. The
Chair now recognizes Ms. Bentley for 5 minutes.
STATEMENT OF TRACEE BENTLEY, PRESIDENT AND CEO, PERMIAN
STRATEGIC PARTNERSHIP, MIDLAND, TEXAS
Ms. Bentley. Good afternoon, Mr. Chair and members of the
Committee.
My name is Tracee Bentley, and I am the President and Chief
Executive Officer of the Permian Strategic Partnership, also
known as PSP.
I am grateful for the opportunity to share our work with
you and that you have chosen to host this hearing right here in
the Permian, which not only leads the nation in energy
production but is also a place where innovation, private
industry, and the private sector all come together in a very
unique and powerful way.
PSP is a partnership of 20 oil and gas companies operating
in the Permian Basin, which includes West Texas and
southeastern New Mexico. Our companies who are members of our
partnership are listed in my written oral testimony.
PSP was founded in 2018. Our mission is to strengthen and
improve the quality of life for Permian Basin residents by
partnering with Federal, state, and local leaders to develop
and implement strategic plans that foster superior schools,
safer roads, quality health care, and a well-trained workforce.
In 5 short years since our founding, the PSP has directly
invested nearly $125 million of our own dollars in projects
across the region, but we have leveraged these dollars into
collaborative investments totaling $975 million.
In 2022 alone, we committed $32.6 million toward education,
workforce, health care, and road safety initiatives, all of
which will support the region's crucial social and economic
infrastructure.
Our work for future generations begins with investing in
education. One out of every three residents in the Permian
reads below a third grade level. Polling of PSP member company
employees has shown that public education is the single
greatest factor in evaluating a location change, and it is
equally important to families already living here in the
Permian.
The majority of our students are not meeting grade-level
standards, and over 50 percent of our students are economically
disadvantaged. Progress is being made, but we still face the
challenge of exponential growth.
PSP has directly invested over $47 million in education
initiatives across our region. As one example, we announced a
partnership with the Cal Ripken, Sr. Foundation to provide $7.5
million toward the creation of 134 state-of-the-art STEM
facilities in schools across our region. This will impact 3,000
teachers and 60,000 students.
While a robust curriculum is critical to our educational
success, it means little if there is nobody there to teach it.
Our classrooms are facing massive shortages of qualified
teachers. And, while this is a problem that cannot be solved
with any single initiative, we believe that one key element is
to provide professional development opportunities for our
teachers.
We have invested more than $4 million in helping teachers
go through the rigorous process to become certified through the
National Board for Professional Teaching Standards.
When it comes to health care, our region has a high
prevalence of chronic conditions, including, among others,
obesity, diabetes, and heart disease. A recent healthcare
assessment shows 25 percent of residents right here in Midland
and Odessa seek complex inpatient care outside of the Permian,
while 45 percent of the rest of the region leave the region for
inpatient care. This is unacceptable.
PSP has invested $53 million with our partners, including
two of our outstanding regional universities--of course the
University of Texas Permian Basin, Texas Tech University,
Southeast New Mexico College in Carlsbad, and New Mexico Junior
College in Hobbs.
PSP has helped expand access to 14 different types of
certifications, residencies, fellowships, and behavioral health
professionals, providing Permian Basin residents a local
pathway to fulfilling careers while also ensuring that local
businesses' workforce needs are met.
Truck drivers, quite literally, drive the economy here, and
the Permian is facing a severe shortage of certified truck
drivers. In fact, a recent study that we supported indicate
that drivers were the leading occupational shortage among
skilled workers in our area.
Last month, we announced our partnership with Odessa
College, a $3.5 million investment to expand their Truck
Driving Academy. And we hope to do something similar in
southeast New Mexico. This will provide essential training in
high-demand, high-paying careers for nearly 100 Permian Basin
residents per year while also making our roads safer.
These are just a few examples of our efforts toward
improving health care, education, and workforce development in
our communities. Our work is made possible through each of our
members' vision and long-term commitment to our region and to
our communities.
Members of the Committee, we ask you to partner with us. By
supporting responsible energy development in our region, you
are supporting our efforts and our investment in an area that
the United States and the world will rely on for many, many
decades to come.
We look forward to working with you to make transformative
progress through strategic public-private partnerships in our
region.
Thank you.
[The prepared statement of Ms. Bentley follows:]
Prepared Statement of Tracee Bentley, President and CEO, Permian
Strategic Partnership
Good afternoon, Mr. Chairman, and distinguished members of the
Subcommittee. My name is Tracee Bentley, and I am the President and
Chief Executive Officer of the Permian Strategic Partnership, also
known as the PSP. I am grateful for the opportunity to share our work
with you and that you have chosen to host this hearing here in our home
in the Permian Basin, which not only leads the nation in oil production
but is also home to the thriving communities that we work with every
day.
For those not familiar with the PSP, we are a partnership of 20 oil
and gas companies operating in the Permian Basin in West Texas and
Southeastern New Mexico. While the Permian Basin has helped drive the
American economy for decades, many of our communities are underserved.
One out of every three residents in the Basin reads below a third grade
level. Meanwhile, less than half of our students are meeting grade
level standards.
The PSP was founded in 2018; our mission is to strengthen and
improve the quality of life for Permian Basin residents by partnering
with federal, state, and local leaders to develop and implement
strategic plans that foster superior schools, safer roads, quality
healthcare, affordable housing, and a well-trained workforce. The
companies involved with the PSP bring the people, expertise, resources
and leadership needed to develop solutions in partnership with local
leaders and communities.
In the five short years since our founding, the PSP has directly
invested nearly $125 million in projects across the Permian Basin and
contributed to collaborative investments totaling $975 million. In 2022
alone, the PSP committed $32.6 million toward education, workforce,
healthcare and road-safety initiatives, all of which will support
crucial social and economic infrastructure in both West Texas and
Southeastern New Mexico.
Partnerships between the oil and gas industry and our local
communities are essential for the success of the Permian Basin, as they
foster collaboration that can lead to increased investment, job
creation, and economic development. Through this work, we
simultaneously strengthen the existing foundations of our communities
and create the opportunities that will fuel them for generations to
come.
Our work for those future generations begins with investing in them
through education. Polling of the PSP's member company employees has
shown that public education is the single greatest factor in evaluating
a location change, and it is equally important to families already
living in the Permian Basin. Children in school today will be joining
the workforce of tomorrow and access to a quality education is critical
for success both now and in the future. Our schools, and school
leadership, must have the resources to provide the next generation with
access to highly qualified teachers and a robust curriculum.
Today, the percentage of Midland and Ector County Independent
School District students that met grade-level standards across reading,
math, and science is under 45%. The majority of students at these two
ISDs do not meet grade level. I'll let that sink in for a minute. Over
50% of the students at these two ISDs are economically disadvantaged.
Progress is being made but we still face the challenge of exponential
growth.
Fueled by the growth of the region, public schools in the Permian
Basin are experiencing extreme increases in student populations and,
unfortunately, have underperformed in the past when compared to other
areas. We understand that in order for our communities to thrive, we
must ensure that teachers and schools in the Permian Basin have the
resources and support they need to help not only improve, but excel.
To achieve this goal, the PSP has directly invested over $47
million in education initiatives across the Permian Basin, supporting
local public schools, universities, teachers and students.
One area of particular focus in education for the PSP is ensuring
access to Science, Technology, Engineering and Math (STEM) learning. By
providing resources for these curricula, we can encourage our children
through developing problem-solving and critical thinking skills while
also building their knowledge base for future careers.
This year, the PSP announced a partnership with the Cal Ripken Sr.
Foundation to provide $7.5 million toward the creation of 134 state-of-
the-art STEM facilities in schools across the Permian Basin, impacting
3,000 teachers and 60,000 students. Through this investment, students
will have access to the tools and resources they need to explore the
world around them while learning useful skills for the future. These
centers will be installed over the next four years and will help
inspire students to pursue careers in STEM for decades.
While a robust curriculum is critical to educational success, it
means little if there is no one to teach it. Teachers play a crucial
role in shaping the future of our children and our communities.
Research shows that student performance rises with teacher experience
and quality--and declines with high teacher turnover and inconsistent
school leadership.
Sadly, as in many areas across the country, our classrooms are
facing a massive shortage of qualified teachers. While this is a
complex problem that cannot be solved with any single initiative, we
believe that one key element is to provide professional development
opportunities to bolster teachers in the classroom. To do so, the PSP
has invested more than $4 million dollars in helping teachers go
through the rigorous process to become certified through the National
Board for Professional Teaching Standards.
Supporting such certification initiatives is an important part of
improving not only education in the Permian Basin, but its entire
workforce as well.
Many times the PSP works together with both private and public
sector partners to propel an idea into reality. One example is the
Hobbs CTECH School, a Career Technical Education school to improve
workforce readiness in a range of disciplines including energy,
construction, hospitality, STEM, information technology, manufacturing,
and transportation.
The PSP has also worked with America's Warrior Partnership (AWP) to
design the Permian Warrior Partnership. AWP is a national veteran
organization that focuses on an upstream approach to proactively know
the veterans in the community and connect them with local resources and
opportunities. At the PSP, we have set the goal for the Permian Basin
to become one of the most veteran friendly places to live and work.
We are passionate about addressing the needs of our current and
future workforce. As members of this Subcommittee, you know first-hand
how a shortage of essential employees can impact local communities and
unnecessarily limit their economies.
Our area is blessed to have innovative and collaborative academic
institutions that we find ourselves partnering with often. The PSP has
collaborated with the Texas Tech University Health Sciences Center
through a number of residency and fellowship programs with focuses in
Family Medicine, Physicians Assistants, Surgery and Sub-Specialty
programs and avenues for the rural basin to access primary care. We
have also worked to significantly bolster nursing programs at both the
University of Texas Permian Basin and Odessa College. With the suicide
rate over 50 percent higher than the national average in our region and
increased fallout from COVID-19, the PSP invested to provide mental
health counseling and support across the area.
To this end, the PSP has committed $14 million toward workforce
development across the Permian Basin, with an additional $53 million
invested specifically towards workforce development in healthcare. With
regards to healthcare, our region has a high prevalence of chronic
conditions including, among others, obesity, diabetes and heart
disease. A recent healthcare assessment shows that 27% of Midland and
Odessa residents seek complex inpatient care outside of the Permian
Basin and 45% of all other Permian residents leave the region for
impatient care. Large healthcare investments are needed in our region.
Through our efforts, the PSP has helped expand access to 14
different types of certifications, workshops and fellowships, providing
Permian Basin residents an accessible, local pathway to fulfilling
careers while also ensuring that local businesses' workforce needs are
met.
Those needs will only continue to grow as the Permian Basin's
prominence as an epicenter of energy production increases. According to
industry experts, Permian oil is on track to make up fifty percent of
all U.S. production by 2030, compared to approximately forty percent
today. This increase in production presents a tremendous economic
opportunity for our region and the country--but it also comes with
great challenges to provide the workforce, educate their children and
provide healthcare for their families.
If the Permian Basin was its own country, it would be the third-
largest oil producer in the world. As the world faces complex energy
and geopolitical challenges, the Permian Basin provides clarity and
stability and remains an essential--and trusted--global partner. Great
potential exists in the region with reserves of 94.5 billion barrels of
recoverable oil. The low-carbon oil produced in the Permian is cleaner
and more environmentally friendly than other major production areas,
and the region has emerged as a leader in wind and solar generation.
As the Permian Basin continues to grow, partnerships dedicated to
having a workforce that can meet the demands of both the oil and gas
industry and the regional economy overall will become even more
essential.
Logistics will be a crucial element in ensuring our economy has the
capacity and capability to grow; truck drivers quite literally drive
the economy, and the Permian Basin is facing a severe shortage of
certified drivers. In fact, a recent study that we supported indicated
that drivers were leading the occupational shortage among skilled
workers in our region. That is why, last month, we had the pleasure of
announcing our most recent partnership with Odessa College, a $3.5
million investment to expand the Odessa College Commercial Drivers
License Truck Driver Academy. Not only will this program help ensure
that our local economy can continue to grow, but it will also provide
essential training in a high-demand and high-paying career for nearly a
hundred Permian Basin residents per year.
These are just a few examples of our efforts toward improving
workforce and education, as well as healthcare access in our
communities. Our work is made possible through our member company's
generosity and commitment to their communities and the tireless effort
of our staff.
The PSP dedicates itself to helping ensure the Permian Basin not
only continues to fuel America and the world for decades to come, but
also working hand-in-hand with our partners to grow our region to meet
its full potential. We take great pride in knowing that our work has
direct, lasting impacts for our families and the communities we are
privileged to call home.
While we take great pride in our accomplishments so far, as the
Permian Basin continues to play such an important role in the country
and the world, our work will not end, and we continue to look for other
partners to leverage our funding.
Members of the committee, we ask that you consider joining our
public private partnership and support PSP through strategic
investments in education, healthcare, workforce development and
infrastructure. Such investments will return not just economic
dividends but will assure that we have adequate energy resources to
meet future needs across the globe for decades to come. As one of the
most important regions in the country and the world, it is crucial that
education, healthcare and workforce development in the Permian Basin be
prioritized.
We look forward to working with you to make transformative progress
through public private partnerships in our region.
Thank you, and I look forward to answering your questions.
[GRAPHIC] [TIFF OMITTED] T1182.001
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.eps__
Mr. Stauber. The Chair thanks the witness for her
testimony.
The Chair will now recognize Members for 5 minutes for
questions, and I will begin by recognizing myself.
Mr. Gallegos, we were in Roswell with another Member of
Congress a little over a year ago, and we talked about the
devastation that this Administration has, and the reduction in
the royalty or the production for the communities that we
talked about--health care, police, fire, ambulance, education,
roads, et cetera.
I remember asking an individual who wasn't supportive of
the industry--I said: How are you going to make this up?
I couldn't believe the answer I got, but I am going to
share it with you: through the sales tax of selling marijuana.
I thought, I can't believe that a professional answered
that way. I don't know how much and how high people have to get
to sell that much to make up for what you described. And that
is unacceptable. I wore the police uniform for 23 years. You
are going to make that up by doing this to our kids?
That is why, when Representative Pfluger said this was
supposed to be a bipartisan--the Chair and I invited everybody
from the Committee. And I am disappointed that my colleagues
from the other side of the aisle didn't come to this valuable
hearing.
Mr. Ackerman, thank you for participating today.
Joe Biden claimed in his State of the Union that, ``oil and
gas will end in 10 years.'' We know that isn't true. It is not
even feasible. However, he is trying. Although perhaps
unlawful, he has crippled leasing as much as he possibly can.
Much of the Federal production right now is occurring on leases
offered under the Trump administration and previous
administrations. Under Trump, 153 parcels per year were
offered; under Obama, 103 parcels; and, under Biden, only 9.6.
This shortfall will unjustly be felt by your membership.
With Joe Biden choking leases on energy, which allows energy
demand to skyrocket, how will your membership react to the
dwindling acres available, and how can we in Congress help?
Mr. Ackerman. Mr. Chairman, thank you for the question.
No industry has been more unjustly villainized than oil and
gas on all fronts. Never has a more vital industry to the
security of this nation faced a bigger onslaught of attacks.
Vague and random ESG policies have shut down financing. From a
numbers standpoint, 53 to 54 percent of the production within
New Mexico is on Federal land. The other 35 percent is on state
land.
So, when you look at the challenges both on the Federal and
the state level, any slowing of lease granting, any feet
dragging on the permitting side slows down 53 to 54 percent of
the entire production within the state of New Mexico.
The oil and gas industry within New Mexico has proven, from
a time when oil actually went negative during COVID--you had to
pay people to take oil--they have increased production 132
percent in a short amount of time when costs in the oil field,
labor is hard to get, anywhere from 75 to 150 percent increase
in cost of inputs because of the supply chain challenges.
The industry can provide, and we are grateful for any help
and support we can get to minimize the effects of the current
progressive agenda.
Mr. Stauber. Thank you. And I can tell you that the
permitting reform is a priority for Mr. Westerman and the other
members of Natural Resources Committee.
Senator Gallegos, thank you for participating.
Your constituents are hardest hit by this Administration's
``keep it in the ground'' mentality. Building off my question
to Mr. Ackerman, as the Trump and previous administrations'
leases are completed and we now fall to the few acres offered
by the Biden administration, how do your counties, townships,
and municipalities brace for future catastrophic funding
shortfalls?
Mr. Gallegos. Thank you for that, Mr. Chairman.
So, what happens, because we have ridden the cycle before,
in the Southeast, we have always learned to be able to restore
some money back. But what is going to happen drastically here
now because the permitting is--I predict we have 2 to 5 years
maybe of permits that are out there--production is on a peak
during the initial drill, but it drops off significantly. And I
don't think it hurts just my communities. I think it hurts the
state as a whole.
Right now, we are spending money recklessly throughout the
state because we have an abundance because of oil and gas. You
take that out, we are going to go back to what we have
historically done--taking money from schools, from public
safety, because you have to find some places you can pull back.
We have to have a balanced budget every year for the state
of New Mexico. Well, when that money is not there, we have to
pull it back from areas that we can. And a large part of that,
Mr. Chairman and Members, is in staff. At some point in time,
you have to lay people off because we do not have the funds
available to do it.
So, what happens to oil and gas in the good time is a
blessing to the state. And, on the other side, it hurts the
whole state by losing people and opportunities.
Mr. Stauber. I thank you for your answers.
The Chair will now recognize the Full Committee Chair, Mr.
Westerman, for 5 minutes of questions.
Mr. Westerman. Thank you, Chairman Stauber, and thank you
to the witnesses for your testimony.
Senator Gallegos, I have to say I am a little bit envious
having served in the Arkansas Legislature, where we had a
balanced budget. And, when I read your written testimony, there
was a number that stood out, and it is the $10.8 billion in oil
and gas revenues that are going to the state. So, I did a
little further research, and I saw that the population of New
Mexico is 2.1 million, and the population of Arkansas is almost
3.1 million. Yet, our balanced budget last year was $6 billion,
and the state of New Mexico's balanced budget was $9.44
billion.
So, you have a lot to work with because of these oil and
gas revenues. And you just mentioned that, some wasteful
spending, but how on Earth do you waste that much money? We
were up there this morning. You are obviously not spending it
on the roads.
Mr. Gallegos. Mr. Chairman, thank you for that.
Actually, we keep trying to work on infrastructure, but
what happens is a corridor, the Albuquerque area, have the
majority of legislators, so they get what they want, not what
we need.
But the bad thing is, you go back in history, Governor
Martinez did a real hard job of cutting our budget. Ever since
she has been gone, every year, we increase the budget, and it
is one of those where you can't see the positive attributes.
New Mexico is still a really poor state. Like you said, our
streets and roads are in really poor condition, our children
are at 50th in the nation on education. So, we are throwing
money at things without expecting a return on our investment or
an increase for our kids. They are just frivolously--I voted no
last year on giving money out, the only one in the Senate who
voted no, because I think we need to look forward 10 years out,
5 years out, at some point in time say: OK, here is what we are
going to have. At the end of this time, if oil and gas takes a
reduction, where will we be?
And our governor and the other people on the other side of
the aisle and even some of my colleagues are happy to be
spending their money today, not thinking about tomorrow.
Mr. Westerman. So, most of that revenue is being generated
in Lea and Eddy Counties, and it goes to Santa Fe and on to
Albuquerque, I guess. There is this nursery rhyme about a goose
that laid a golden egg that you might want to inform your
colleagues about there in Santa Fe.
Mr. Ackerman, there are a lot of rumors that have been
floating around the past couple years. The oil and gas industry
has been vilified. We were all shocked when the President's
spokesperson came out and talked about these 9 or 10,000
permits that aren't being utilized, and I was waiting for today
to be in a place where somebody can set the record straight on
that.
And, also, when you are doing that, can you talk about how
long it takes to develop a project and how a delay right now
may not even be seen, but 5 or 10 years from now, we are
creating gaps that, really, you don't get to go back and make
that up?
Mr. Ackerman. Mr. Chairman, thank you for your question.
Also, how to know whether or not you live in New Mexico or
not is whether you have a cracked windshield from all those
great roads that you were talking about earlier.
It takes about 6 to 12 months to get a permit, and you need
between 30 and 50 permits to drill a well. And the average cost
of putting a well and committing to a well on a site is about
$50,000 a day. So, if you look at the dollars and cents that
are associated with what we are speaking about here, it is a
real challenge.
And, with the delays in permitting, with some of the new
challenges to the San Juan Basin, the Tenth Court of Appeals
legislation that just passed, we are concerned about being a
foothold to the Permian.
One of the other things that you hear about is also the
challenge with the dollars and the challenge of why the oil
companies aren't investing back into more production. And, at
the end of the day, what is the incentive for an oil company
when you have an administration that is outwardly saying they
are going to shut you down, and the most recent State of the
Union address said, for 10 years, you know, we are going to
need you for another 10 years.
Well, the forecast for oil and gas from the state of New
Mexico is, by 2050, we are going to be 25 percent domestic
production. We are not going anywhere, but who is going to
invest when----
Mr. Westerman. Those actions don't exactly promote investor
confidence.
Mr. Ackerman. Correct, sir.
Mr. Westerman. I see that my time has expired, so I yield
back, Mr. Chairman.
Mr. Stauber. Thank you, Chairman Westerman.
I will turn it over for 5 minutes to the gentleman from
Wisconsin, Mr. Tiffany.
Mr. Tiffany. I hope all of you from Ector County understand
the challenge that Senator Gallegos has issued to all of you
with his testimony. Lea County in New Mexico being the No. 1
county in the nation for oil production, you have some work to
do. He is coming into your state and laying down the gauntlet.
Mr. Gallegos. We love West Texas.
Mr. Tiffany. Yes, absolutely.
Ms. Bentley, we hear all about kids that get liberal arts
degrees, end up in their parents' basements, $100,000 in debt
and all the rest. Is that what the jobs look like in the
Permian Basin?
Ms. Bentley. It is not, no. We have many, many jobs
currently and also in the future where they are STEM related,
many of them. But many of them are skilled labor jobs, such as
electricians and plumbers. We need accountants. The whole gamut
is available right here and will be for the foreseeable future.
Mr. Tiffany. Yes. I was really struck today, in the tour
that we did over in the Hobbs area, at the number of
professionals that are employed, and it really struck me that
the number of people, whether they are engineers, geologists,
whatever they may be, there are a lot of high-skilled jobs to
come into an area, aren't there?
Ms. Bentley. There absolutely is. We like to say that, if
anywhere in the country really should have a robust career
technical education program, it should be right here in the
Permian.
Mr. Tiffany. Senator Gallegos, did I hear you correctly
saying, if you see reduced oil production in New Mexico, that
you may see cuts in education and health care? Is that
accurate?
Mr. Gallegos. Thank you for that question.
Actually, we have seen it on a periodic table. Whenever oil
and gas drops, historically we have gone to schools first. So,
what happens, they have a fund that they hold back for bad
times. Well, we, the legislature, just take it from them. We
don't ever replace it. We just take it from them.
And that really hurts our students. We are, I think, in
another downturn. We are going to have to look broader. I know
that we have taken from public safety and education, but it is
going to hit more areas, because we keep increasing the budget
in all areas in our state. So, the governor is just spreading
the wealth everywhere. At some point in time, he will have to
pull back in order to make that budget work.
Mr. Tiffany. Mr. Ackerman, have you done an analysis of the
effects of the reduced number of permits that are being
issued--have you done an analysis when that is going to hit? I
mean, you see that production is still strong as a result of
the permits that have been issued.
Do you have a projection when this is going to hit and you
are going to see less production, fewer wells as a result of
issuing fewer permits?
Mr. Ackerman. Thank you for the question.
I don't have an official look at that. As we have looked at
the challenges that are facing the industry and the challenges
that continue to grow, there are so many different variables at
play here. I don't have an exact number for that, no, sir.
Mr. Tiffany. Senator Gallegos, do you have a guesstimate of
when you expect to see that?
Mr. Gallegos. Well, and thank you for that.
Also, just seeing how it has been in the past, I would say
between 2 and 5 years, because projections are we have plenty
of oil and gas. It is not about the product. It is about the
timeline that you have and the gap that it is going to create.
I think we are going to have a cliff effect. Whenever the
permitting gets to the point that we are not replacing the
permits, then I see oil and gas drop. And, just because of
regular production out of that well, if you don't continue
drilling, then the production falls off.
So, I would say, just my thoughts, I would say 2.5 to 5
years, we will see a drop, unless the Feds start allowing us to
have permits.
Mr. Tiffany. If a member of the New Mexico Congressional
Delegation asks for a Federal energy production hearing in
southeast New Mexico in your district, would you welcome them?
Mr. Gallegos. I would. I don't see that coming, because
they are totally against oil and gas. I sent a text to my last
Congresswoman, Yvette Herrell, earlier. She would have loved to
be here.
But, in reality, the other side of the aisle in New Mexico
wants to do away with oil and gas production, so they are not
in favor of the permitting process at all, even at the cost to
our students and our kids and our communities.
Mr. Tiffany. I want to close with just two quick things,
Mr. Chairman.
One, as Chairman Stauber mentioned earlier, we are looking
hard at NEPA, which is one of the biggest concerns. When you
are talking about forest management, mining, oil production,
wherever the case may be, we do need reforms to NEPA, the
regulatory policy that governs on Federal lands. And we are
hoping to be able to get some changes to that, and hopefully
get some bipartisan agreement.
And, finally, I would just say to you, for those people
that are chasing the green fantasy, the Permian is a problem,
and you should smile every day when you go to work knowing that
you are stopping people who want to impoverish Americans with
higher energy prices. I hope you smile every day as you
continue that robust production in the Permian because you are
standing up for the people of the United States of America.
Thank you for the work you do.
I yield back.
Mr. Stauber. Thank you for the questions.
And, finally, the Chair recognizes the gentleman from
Texas, Mr. Pfluger, for 5 minutes.
Mr. Pfluger. Thank you, Mr. Chairman.
And I couldn't agree more with my colleague, Mr. Tiffany,
about that. Thank you for standing in the gap.
And, as a small correction to my facts on the $14 million,
my point was to say that the Permian Basin is producing almost
50 percent of that, which is about 6 to 7 percent of the
worldwide production. Just an incredible amount.
Ms. Bentley, the Permian Strategic Partnership is really a
one-of-a-kind organization that is doing something that is
supporting national security. If you can talk about the
importance of national security and then maybe give us a sense
in scope of how many people are employed in the Permian Basin
by this industry, and then the family members that are impacted
positively by this industry.
And I will have a follow-up here in a second.
Ms. Bentley. Thank you, Congressman Pfluger.
Well, you said it best earlier when you said we are in the
midst right here of the world's largest and most secure supply
of energy, for many reasons.
But, No. 2, I think it is important to remember why that
is. And a lot of that is due to the hardworking men and women
that every day go to work and produce some of the cleanest
energy of anywhere in the country and the world as well.
So, when we hear rhetoric from Washington, DC that that is
not important anymore, you can imagine the effect that it has
on a region like ours, and of course across the country. But
the truth of the matter is we know that the world is going to
need our energy for decades and decades to come, so we keep at
it.
I will tell you also that, when my companies are sitting
around the boardroom talking and I ask them what keeps them up
at night, workforce comes up, without fail, almost every single
time. We are worried about having the workforce for the future
that we are going to need to continue to produce the energy
that the world relies on. So, making sure that we have the
infrastructure, both social and what we think of as traditional
infrastructure, to sustain our workforce is becoming more and
more important every day.
Mr. Pfluger. Well, thank you for that.
If we go the path of Western Europe, and we attack fossil
fuels, and we enact the policies that President Biden has done
over the last 2 years, what is the economic impact here? I
mean, Texas had $24 billion paid in from the oil and gas
industry--$24 billion paid to the state in local taxes, state
taxes that supported education, that supported roads, that
supported infrastructure.
So, if we continue down this path, what is the economic
impact we can expect?
Ms. Bentley. You are exactly right. And we heard the good
Senator from New Mexico say earlier that oil and gas revenue is
about a third, maybe a little over a third of New Mexico's
state budget. And that is just our two states.
When you look at the national level and globally, there is
no other greater economic driver when it comes to energy than
right here in the Permian. We employ--I think the statistic is
nationally over 900,000 workers in the energy industry. And the
revenue, of course, that comes from this area pays off all the
way down the chain, dividends over dividends over dividends.
So, we understand that, while we are producing much-needed
energy, the economic downfall that would happen if we keep
seeing what we are seeing happen in Washington is that it is
going to be devastating to all of us.
Mr. Pfluger. Senator, thanks for standing in the gap in New
Mexico in a very, very tough environment. I can't for the life
of me understand why you would want to cut off the funding
stream that produces almost 50 percent of your state's budget.
It just doesn't add up here, so thank you for what you do.
And, Mr. Ackerman, same to you. Let's get back to those
9,000 permits. I cringe every time I hear those. And you just
mentioned 30 to 50 permits per well.
Mr. Ackerman. Yes, sir.
Mr. Pfluger. I always come back to 9,000, and I say, well,
we actually need 90,000 permits. I know that that is not
accurate.
Can you tell us how many permits we need in New Mexico and
how many have been impacted? I mean, we talked about a
production cliff, so how many permits do we need roundabout,
right now, new permits?
Mr. Ackerman. Wow. Thank you for the question.
Honestly, if we just got the permits that are being delayed
right now, with APD challenges that are going on in Wyoming and
New Mexico, Center for Biological Diversity, and some of the
other environmental NGOs that are challenging us, there are 400
APDs that are tied up there. The Tenth Circuit of Appeals issue
in the northwestern part of the state is challenging hundreds
more.
This could shut down production for a year. I have
companies up there. My incoming chairman for next year is
worried about whether or not his company is going to be able to
operate because they are, like I said, it is $50,000 a day that
you are committing to a well. And every day that that well is
not active, it is costing $50,000 a day. The ROI on that from a
business standpoint just isn't there.
When you start to look at the numbers that is necessary, we
will start with just what we have and be able to drill what we
have and then look at where we can go from here. But, honestly,
what would help most is just to stop the feet dragging and the
way that some of the challenges and--well, something that can
help us more than anything else is some clarity in the
regulatory, legal, and legislative environments so that there
are not these holes that people can drive trucks through and
grab on and tie things up and slow us down.
Mr. Pfluger. Well, thank you for that.
And the production cliff that the center talked about, when
supply starts to decrease and the price starts to increase,
inflation will continue to increase. We know that affordable
energy helps those who need it the most in the lowest earning
bracket in our country.
And I know, Senator, that you probably experienced that
just like everyone who is elected experiences that. We need to
unleash America's energy potential. It starts right here. It
starts with permitting. It starts with doing things in a
market-based reality; not this fictional green fantasy that my
colleague mentioned.
With that, Mr. Chairman, thank you for being in Odessa,
Texas.
And I yield back.
Mr. Stauber. Thank you, Mr. Pfluger.
And now the Chair is going to request, if there is a second
round of questioning, we have some time. And, with time, we
always want to get as many questions in as we can.
But, before I do that, I want to thank the University of
Texas Permian Basin for your hospitality in such a short period
of time. We thank you very much.
And I would also like to thank our staff. So, we come here,
and we sit at the table. It is a lot of staff time to get it
done, and the Natural Resources staff that came with us from DC
and other parts, I want to thank you for your hard work. It is
worth it.
So, I am going to recognize myself for 5 minutes. We will
go in the same order.
We always talk about all of the best energy. I used to say
``all of the above energy'' but all of the best energy. And one
of the things that we are seeing across America is this forced
transition.
And I just, I want to bring you back to critical minerals
mining for a minute. We need to be, as August said, energy
dominant. We need to be critical mineral dominant, too. That is
part of our strategic national security. Those are two areas we
can't get wrong, and right now, under this Administration, they
are not looking at it that way. They are putting us behind.
So, Ms. Bentley, thank you for the work that you do,
strengthening the quality of life of those living in the
Permian Basin. Your testimony discussed students missing key
benchmarks--reading, math, and science--and your organization's
work to overcome those issues.
How would the Biden cuts to education through leasing
restrictions set back the progress you have already made?
Ms. Bentley. Thank you, Mr. Chair.
I believe that they would be very, very significant in that
you heard Senator Gallegos earlier say how much oil and gas
revenue in the state of New Mexico, for example, goes directly
toward education, not only teacher salary but also per-pupil
spending and also to actually build brick-and-mortar, these
educational institutions. So, if you start whittling that away,
my goodness, you can see what is immediately going to happen.
And I feel like New Mexico is one of the best examples of that.
And I could tell you that, as far as the rest of the
region, here in West Texas, our companies are able to make
large investments like what I have described earlier because it
is good business here. But the second that that starts to erode
is the second that these kind of investments we are going to
have to take a harder look at.
So, education is the key to everything that we have found.
Without a solid education system, everything else kind of
starts to crumble around it.
Mr. Stauber. Well, as Mr. Westerman said, we took a tour of
CTECH. Very, very impressed, and I know you were a part of
that.
We must permit by rule, not permit by decree. This is what
this Administration has been doing, and we are seeing the
devastating effects with that.
So, to anybody on the panel, how do your friends and
neighbors cope when the White House decrees that they must do
with less and that your rural lifestyles must be squeezed dry?
Any of the panel members.
Ms. Bentley. I will start.
Well, I can tell you, and it kind of goes to what I said
earlier. We can say that we are in an energy transition, and I
think my industry would tell you we prefer the word ``energy
expansion.'' But, regardless, as we hear the condemnation and
the talk about we have to move away from traditional energy,
and yet we know that that is just not even possible, not even
in the near-time future, that is just not feasible.
So, to hear our industry getting vilified, as we said
earlier, in a forum that is not reality but yet my neighbors
and our neighbors are expected to get up every morning--and
they do, and they are happy to do so--but knowing that they are
operating under decision makers who are not living in reality,
it is difficult to watch for sure.
Mr. Stauber. Yes.
Senator.
Mr. Gallegos. Well, in our area, everything rotates around
oil and gas and not just the cost of the oil and gas. Your
gasoline is one issue.
But, if you start looking and you talk to the people in my
community about the cost of products, you look at an iPhone,
you look at our tires, everything that we use in our nation is
driven by oil and gas product.
My wife, I use this often. She says please don't do that.
It takes her 2 hours to get ready to go to Walmart. She is
going to put on makeup and get ready to be out in public. What
is the cost of the petroleum products going to be in makeup? I
will still have to pay it, regardless of what the cost is. But
that is a necessity to her.
And we are taking away these necessary pieces of our
society because we are trying to hurt oil and gas. What are the
solar panels going to come from? What are the wind mills going
to come from? You look at the freeze here in Texas. Why did it
freeze? They didn't have heaters in the petroleum that helped
rotate.
So, there is so much that they don't have figured out, but
all it does is hurt all of us and it starts right here.
Mr. Stauber. Mr. Ackerman.
Mr. Ackerman. There is no harder question to answer,
especially in a state that is boasting $10.8 billion in money
that goes to the state government to try.
I get asked all the time how to reconcile the--you all
brought it up earlier today--how do you reconcile the fact that
this industry that means so much to the state and also to the
security of this nation, the vilification and the shutting down
of it? You just can't reconcile them. There is no more
difficult question that I get asked on a daily basis.
Mr. Stauber. Well, your constituents and friends and
neighbors matter. Our rural way of life matters. No matter
what, you have an ally in the four Members of Congress sitting
in front of you.
I will now turn to Chairman Westerman for the additional 5
minutes.
Mr. Westerman. Thank you, Chairman Stauber.
Ms. Bentley, one of the things that we have had to endure
the past few years, serving in the Minority party, were
hearings where we were inundated with witnesses about
environmental justice and social justice. And I am still not
sure I ever comprehended what these witnesses, the point they
were trying to get across.
I have traveled a lot of different places in the world, and
where I have seen what looked to me like the most environmental
injustice and social injustice and governance injustice were in
areas of poverty where you had rogue governments and socialist
governments in control.
And, to the contrary, I thought we were actually providing
more environmental and social justice to American citizens by
giving them lower cost energy, by giving them the good things
that come from having a reliable energy sector.
But I have always wondered: How would somebody that is out
here on front lines, how would they answer that question about
how energy production in the Permian has resulted in better
environmental justice, better social justice? You have talked
about health care. You talked about the education system.
But what would you like to tell those people that are
accusing the good people here in the Permian Basin that are
producing energy of creating environmental and social
injustice?
Ms. Bentley. Thank you for that question.
I would tell them that the 20 oil and gas companies over
the last 5 years have spent $125 million of their own dollars
and leveraged that into $1 billion and put it right back in the
community via health care, education, roads and infrastructure,
and workforce development.
And I don't know of anywhere else in the country, quite
frankly, who has this public-private partnership. And nobody
told them to do it. We didn't ask government to do it for us.
We took the leadership, stood it up, and asked others to come
in and partner with us.
So, as far as the environmental aspects, this area has some
of the best stewards of the land that I have ever seen. And
that is not only energy producers. It is our farmers and our
ranchers and everybody who lives here. We are all raising our
kids here and our families here as well. So, it behooves us. We
want the exact same thing.
And I have been to many basins across the country when it
comes to oil and gas production. And I can tell you that some
of the cleanest energy is coming right here from the Permian.
Mr. Westerman. Good answer.
That is what I thought.
Mr. Ackerman, you represent industries that produce on
both, or on private, state, and Federal lands. So, I am
assuming you are familiar with all the permitting issues they
go through. How long does it take in New Mexico, and you may be
familiar with Texas, to get a permit to drill on private land,
going through private or state land, going through the state
permitting agency?
Mr. Ackerman. Thank you for the question, Mr. Chair.
There is very little private. It is about 53 to 54 percent
Federal; another 35 percent, there is some private. It is about
6 to 12 months just to get the permits. But then with the
challenges we are seeing in different legal venues to those
things, they can get frozen at any time.
That is one of the big concerns we have with this Tenth
Circuit of Appeals issue that we have right now. It is getting
a toehold in the northwest, and it is going to creep down in
the Permian and affect what we are doing here.
Mr. Westerman. So, 6 to 12 months on Federal land, going
through the BLM.
Mr. Ackerman. Yes, sir.
Mr. Westerman. So, what about state land or private land?
How long does it take?
Mr. Ackerman. One of the issues they are facing on the
state side is people. They are trying to go out and get more
people and recruit for the permitting process. Hopefully, the
new budget will get passed with the $10.8 billion of extra
money that is going to be out there, and we can get more people
involved to help with the permitting process, but it is
similar.
Mr. Westerman. So, I think some of the folks we were with
this morning were saying sometimes it is a matter of weeks to
get a permit if you are not going through the Federal
Government.
Have you seen any discrepancy on the environmental
stewardship of the land going through the state permitting
process versus the Federal permitting process?
Mr. Ackerman. The state has been much easier to work with.
The Federal, there has been no real predictability. You just
never know what it is going to be, and that is one of the big
issues when you are asking people to invest.
Mr. Westerman. But out on the ground, is the land
protected? Is the environment and the public protected more
when there is a Federal permit versus when there is a state
permit?
Mr. Ackerman. New Mexico has the highest regulatory
environment there is, as far as capturing methane and some of
the other things. We literally lead the nation and the world in
what we do as far as taking care of the environment.
Mr. Westerman. So, the state can permit more quickly and
more effectively than the Federal Government can.
Mr. Ackerman. Yes, sir.
Mr. Westerman. So, as policymakers, should we look at
policy to maybe take that power from the Federal agencies and
let the state agencies do the permitting?
Mr. Ackerman. That is a great question, Mr. Chairman.
I think, honestly, at a bare minimum, that is one of the
alternatives. Also, inviting the industry to the table and
helping them to have the industry present and provide an
operational standpoint to what it really means when you are
establishing permitting. We don't have a seat at the table
right now.
So, why not bring the experts and the innovators to the
table when it comes to helping to bring regulatory and
permitting issues to some sort of reality?
Mr. Westerman. I am out of time again. Again, thank you all
for your testimony.
And I yield back.
Mr. Stauber. The Chair thanks the Member for his questions.
And now I will turn it over to the gentleman from
Wisconsin, Mr. Tiffany, for 5 minutes.
Mr. Tiffany. Last week, I introduced a bill called The FARM
Act, the Future Agriculture Retention and Maintenance Act. And
what it does is it disallows subsidies for intermittent sources
of power like wind and solar if it is located on productive
farmland.
Coming from Wisconsin, America's dairy land, we have a lot
of terrific agricultural producers. And we are seeing this
spread of intermittent sources of power, which, by the way, up
by us, will be on at most 20 percent of the time, maybe 25
percent of the time, clearly the definition of intermittent
sources of power.
And what we are saying with the bill is that producing food
is more important than producing energy. Now producing energy
is really important. Right? But there is one thing that I
believe is more important, and that is producing food. And we
are sidelining agricultural land, productive agricultural land,
to put in intermittent sources of power when we have baseload
power that is being produced right here in places like the
Permian.
And what we have found out is those subsidies amount to as
much as $50,000 an acre for those intermittent sources of
power. The Tax Code is being used at the Federal level to drive
that.
So, you have rich subsidies that are going to wealthy
developers, and they are converting farmland into a use which I
would say is secondary to food production. And I am greatly
concerned about that.
Ms. Bentley, are your members asking for additional
subsidies from the Federal Government?
Ms. Bentley. No, sir. They are not.
Mr. Tiffany. Mr. Ackerman?
Mr. Ackerman. No, sir.
Mr. Tiffany. Mr. Gallegos, with the people that you
represent in your Senate district, are any of them asking for
additional subsidies from the Federal Government?
Mr. Gallegos. No, sir, we are not. We are asking to be let
alone so that we can work in our own way.
Mr. Tiffany. That is the only question I had, Mr. Chairman.
Mr. Stauber. Thank you for those questions.
The Chair now recognizes the gentleman from Texas, Mr.
Pfluger, for 5 additional minutes.
Mr. Pfluger. OK. Thank you.
Last summer, the EPA threatened a redesignation peer--ozone
attainment because of a lawsuit from an outside group. And a
non-attainment redesignation would be, I think, devastating to
our local economy. In fact, when you look at places like San
Antonio, Texas, which had that happen to them, the cost is
estimated to be upwards of $36 billion.
Let me start with you, Mr. Ackerman. Weaponization, what
types of President Biden weapons have you seen aimed at this
industry in New Mexico, whether it is EPA related or SEC
related? Can you give us kind of a laundry list of the types of
weapons to make good on the promise to end fossil fuels?
Mr. Ackerman. Thank you for the question.
I don't have time to give you a laundry list. There are
only 5 minutes on the agenda. I will say, when somebody
blatantly comes out and says we are trying to shut you down, it
drives up financial markets, right there. The lack of
consistency, we keep going back to permitting reform and the
need for that, the regulatory environment. There is no
predictability.
And then getting beat up on the back end of that for not
putting enough money into it when the price of gasoline goes
high, it is just--you just can't make this stuff up, for lack
of a better way to say it.
So, there are two fronts to that. There is the also the
environmental NGO. I am also very familiar with the non-
attainment that we are looking at, at challenging as well. When
we are looking at--out of the 70 parts per billion that are in
issue from the ozone nonattainment, only 3 of them are
attributable to oil and gas, but yet we're going to go after
oil and gas for 3 out of the 70 parts per billion. From issuing
permitting to challenging leasing, it is time to put us first.
Mr. Pfluger. I would encourage, whether it is NMOGA or
TXOGA or any of the trade organizations, to continue to provide
us with these details because, at the end of the day, these
costs are being passed on to consumers.
Endangered species, this week, I plan to introduce a
Listing Reform Act that I think would modernize the Endangered
Species Act, things like the lesser prairie chicken. These are
things that are not just impacting the oil and gas industry. In
fact, they are impacting agriculture productions. They are
impacting green energy, if you want to call it green,
intermittent, unreliable energy.
One thing that was said about the predictability and I
think that is the investment environment here due to the
unpredictability. We are acting like a Third World country when
you see the Keystone Pipeline basically being expropriated from
the government.
Ms. Bentley, if you can kind of talk to me about what your
member companies are saying, the lack of predictability, how is
that affecting their willingness to invest in new operations
with that environment that we are seeing?
Ms. Bentley. Well, I feel very blessed in that for my 20
companies, some of them have 30-, 40-, 50-year plans to be in
the Permian. And some of them will even tell you, if they are
going to be anywhere in the world, it is going to be right here
in the Permian. So, for those reasons, prices will rise and
fall, and hopefully the Federal Government will loosen up and
understand how important we are.
But we are in it for the long haul. We are going to be here
for as long as the community needs us and as long as we can
help in this community.
Having said that, though, I will say that it certainly
makes it harder to make those decisions when the cost of doing
business skyrockets and you are getting permitted to death,
without a doubt.
Mr. Pfluger. The ESG issues are overwhelming throughout the
country, and I think it has been said on this panel that the
unwillingness to invest is because there is lack of
predictability.
Senator Gallegos, when it comes to New Mexico, I mean, how
is this impacting your constituents and communities?
Mr. Gallegos. It does. Earlier we were talking about the
long list. You look at the flurrying of fracking, and even the
leasing and the permitting process, it hurts the majors and the
independents. And those independents may have a marginal well
that they get 10 barrels a day, and they may be living a family
off that income. And it is not there anymore.
If we could take those people that are against us out to
the oil fields and show them the technology that is out there
now, I used to work for a natural gas company and we were
always looking for leaks because you want to retain that
product for sale, not to have it into the atmosphere.
I think for years we have been doing a great job of
protecting the environment because it is costing us if we
don't. And to see what they are doing, what they are willing to
do to these small communities, just because they are in a high
rise in New York doesn't give them the opportunity to do that
to us.
Rural New Mexico, rural Texas have people that live here
and will be here as long as we can. You shut off oil and gas,
it devastates Eunice. I mean, we would have to flee the area
because it is the base of our existence, and that hurts each
one of my constituents.
Mr. Pfluger. And I will say it will devastate every place
in America, every place, rural or urban.
Mr. Gallegos. It will.
Mr. Pfluger. And, with that, Mr. Chairman, I yield back.
Mr. Stauber. Thank you.
Before we gavel out, the Chair is going to take a moment of
personal privilege and allow one more question and then some
closing statements by the Full Chair, Mr. Westerman.
So, Congressman Tiffany, you have asked for one question.
The Chair recognizes you.
Mr. Tiffany. Real quickly, will the proposed rule of the
Waters of the United States affect your industry?
Are you familiar with it?
Mr. Ackerman. I am not up to speed on it. I am sorry, sir.
Mr. Tiffany. We can come back to it off-line. I was just
wondering if you had studied that at all.
Thank you.
Mr. Stauber. Thank you.
And the Committee Full Chair, Mr. Westerman, for some
closing comments.
Mr. Westerman. Thank you, Chairman Stauber.
And, again, thank you to the hospitality here in Odessa and
UT Permian Basin for allowing us to use your facilities for our
first field hearing of the 118th Congress.
Representative Pfluger, thank you for your leadership and
for helping organize.
And I do want to mention that with the Federal lands being
one of the big issues under our Committee, we could have had
this hearing in New Mexico. We have two of the New Mexico
delegation actually sit on the Natural Resources Committee.
But, out of respect for Members who don't want to have hearings
in their district, we moved just across the state line here
into Odessa.
But Members may not want to hear this in their district,
but we are going to get the message out to show the American
people what is happening in the real world, and we are right
here in the real world today.
So, again, thank you to the witnesses and to everyone who
put effort into making this hearing take place.
We are going to take the information we have learned,
again, back to DC. We are going to write legislation, and we
are going to pass that out of House and hopefully work in a
bipartisan manner with some in the Senate and some in the House
to actually get this legislation on the President's desk so
that I can do the right thing for America, for U.S. supply
chain issues, for national security, and for the future of our
country.
I yield back.
Mr. Stauber. Thank you.
And I, too, want to thank the witnesses for their valuable
testimony and the Members for their questions.
The members of the Subcommittee may have some additional
questions for the witnesses, and we will ask you to respond to
these in writing.
Under Committee Rule 3, members of the Committee must
submit questions to the Committee Clerk by 5 p.m. on Thursday,
February 16. The hearing record will be held open for 10
business days for these responses.
If there is no further business, without objection, the
Committee stands adjourned.
[Whereupon, at 4:40 p.m., the Subcommittee was adjourned.]
[ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]
Statement for the Record
Paul A. Gosar, D.D.S.
Member of Congress
Ninth District, Arizona
February 13, 2023
Thank you, Chairman Westerman, and members of the Committee on
Natural Resources, for allowing me to share my views on this important
field hearing, entitled ``Federal Energy Production Supports Local
Communities.''
On November 15, 2021, the Department of Interior announced a
decision to consider a withdrawal of 300,000 acres surrounding the
already protected Chaco Culture National Historic Park--a buffer around
the park of about ten miles, thereby barring new oil and gas leases in
the affected area. This has, and will continue to, result in spreading
poverty among the tribe, lowering their standard of living, and
depriving the tribe and the country of much needed oil and gas.
In December 2019, our office conducted a field hearing on the
Navajo Nation Reservation in Nageezi, New Mexico. Over 500 people came
to the hearing and gave testimony about the importance of oil and gas
to their lives, their tribe, and their people. Notwithstanding the
excellent environmental record the Navajo Nation has when it comes to
resource development, democrats and radical environmentalists stopped
additional resource development in Chaco Canyon and actively pursue
means to shut down the current production.
Tribal members who own allotments containing mineral rights have
been ignored and excluded from the Chaco Canyon process. The 24th
Navajo Nation Council has passed legislation supportive of energy
development in the region and opposes the establishment of a 10-mile
buffer around Chaco Canyon.
The Navajo Nation Council was willing to allow a buffer around the
park of five miles, thereby reducing the number of allotments affected
from 418, made up of 16,615 allottees and 66,576 acres to 53 with 5,462
allottees and 8,479 acres--according to calculations made by officials
from the Navajo Nation. This compromise would have kept seven-eighths
of the land in native hands, but the Interior Department ignored this
reasonable offer.
Although local residents were 100% in favor of the resource
development, outside interests insisted on shutting down a significant
source of inexpensive energy and stopping tribal members from gaining
economic independence. A good portion of the seized land is private and
belongs to individual members of the Navajo Nation. Stealing native
land from this tribe again a century and a half is beyond malicious.
In fiscal year 2013, the combined revenues for the four counties
that are near the proposed Chaco Canyon buffer area was $198.2 million,
as well as 31.5 percent of New Mexico's General Fund. Establishing this
buffer area will decrease these revenues and negatively impact the
economy of not only the area surrounding the proposed buffer area, but
also the entire state of New Mexico.
The Committee's presence in New Mexico is more than a symbolic
first choice for our first field hearing this Congress. It is a
statement that we stand with America, with an energy independent
America, and that we support tribal sovereignty and economic self-
determination.