American Oil and Gas Reporter - January 2016 - 127

The Presidential Papers
Federal Land Limitations
During the recent years' energy renaissance, the United States has become
the world's leading producer of both oil
and natural gas-a feat considered impossible more recently than a decade ago.
The ingenuity and innovations in horizontal
drilling, hydraulic fracturing and seismic
analysis have made the U.S. onshore industry the envy of the world.
New Mexico's oil industry has prospered as a result. The industry's 2015 oil
production was poised to achieve historic
highs, and as of this writing was estimated
to top 140 million barrels for the year.
Such a wealth of oil production, both
nationally and in New Mexico, has not
been without problems. Dramatic increases
in U.S. output have prompted the Organization of Petroleum Exporting Countries
to compete on price to maintain market
share. With production up in nearly every
part of the world and only moderate demand growth, there was only one direction
for prices to go: down.
Working through the challenges will
require building on every bit of the cumulative success we have enjoyed thanks
to our technological and operational innovations-the part of the industry that
virtually all of us love. Our industry has
survived and thrived on scientific and
engineering excellence. It is the oil and
gas industry's core strength, and I believe
we will continue to be on the forefront of
technology for years to come.
In addition to the intense economic
challenges from low oil and gas prices,
costly new regulations from the Environmental Protection Agency, Bureau of
Land Management, and other agencies
further exacerbate the industry's difficulties. Collectively, if these regulatory initiatives are not severely modified, they
have the potential to inflict damage on a
scope and scale that can rival the harm
from weak prices.
BLM regulations have a particularly
huge impact on the oil and gas industry
in our state, one greater than that of most
of the country's other producing areas.
After all, 62 percent of New Mexico's
natural gas production takes places on
federal land and another 4 percent sits
on tribal land. Meanwhile, more than
half our oil production can be found on
federal lands. BLM regulations are no
minor consideration in New Mexico; they
are often a driving factor.

The industry continues to face long
delays for applications for permits to
drill and rights of way on federal land.
Federal permitting delays even hinder
companies operating primarily on state
or private land, because New Mexico's
diverse land ownership pattern and abundance of federal acreage mean federal
permitting often comes into play for some
aspect of most projects, whether it is
lease roads, gathering systems or electrical
systems. Those delays add to the cost
and complexity of operating here.
The profusion of federally-controlled
land makes New Mexico a magnet for
lawsuits by outside entities that seek to
hinder oil and gas development. These
groups have initiated numerous lawsuits,
ongoing information requests and public
relations campaigns to expand the scope
of current regulations and enact new ones.
Oil and gas companies and their advocates
continue to spend large sums of money
to counter these superfluous initiatives.
Responding to these overreaching regulations increasingly has forced the industry to fall back on litigation and other
procedural challenges. Our victories in
these efforts have, thus far, prevented
immediate damage to large portions of
the industry and should be considered
great successes.
A Fresh Look
Even so, if we must continue to rely
on a judicial backstop without addressing
our problems' underlying cultural, societal
and political origins, we will be in trouble.
Over the long haul, if our industry's
ability to win in the courtroom becomes
as important as our access to resources
and our technical skills, we are setting
ourselves up for failure.
Our landscape calls for a fresh look at
our approach. The industry's technical
strengths increasingly are nullified by
propaganda based solely on emotions-
particularly fear. Virtually every industry
process and activity is systematically attacked in a manner that emphasizes fear,
and is packaged and promoted to a public
far more inclined to hear emotional arguments than a scientific or economic
discourse. The practical result is the long
list of legal and regulatory initiatives that
we now face.
The hostile public policy arena in
which we now operate requires new and
intensified action in the areas of commu-

nity outreach, energy education, stakeholder engagement and media relations.
In this time, when our schools and both
traditional and social media demonize
oil and natural gas, we must speak up.
We have a positive story we must tell.
Our industry and nation are at a crossroads. We are in a battle for the hearts
and minds of our young people, and for
the vision of our state and country. I
believe the oil and gas industry will play
a big part-and a very positive one-in the
next chapter of our history. But in the
meantime, the battle rages. Our industry
must train itself to become comfortable
at addressing the challenges of politics
and perceptions that we face, both individually and collectively.
As much as it may pain us to acknowledge it, our technical talent is no
longer sufficient to ensure success. Our
ability to educate, interact, engage, defend
and communicate using both facts and
emotion will determine our future. Historically, our industry has shown it will
take on any challenge, develop any technology and acquire any new skill necessary
to its success. Now we must apply the
same persistence to challenges of a very
different sort than the scientific and engineering variety.
The attitude I increasingly encounter
in the oil and gas industry, both nationally
and in New Mexico, is one of dogged
determination to address the issues we
face head on. Companies and individuals
who heretofore have shied away from
interacting with the media, our stakeholders and the public increasingly are
stepping up to the challenge. We are
getting better at countering our opponents'
negative and false assertions in a variety
of media, and I intend to tell our story
instead of leaving it to others.
In the coming year, the New Mexico
Oil & Gas Association will confront the
industry's economic, regulatory and public
perception issues directly. In a focused
round of strategic planning, we will develop strategies and tactics while we consider, in depth, the role that the trade association will play as the whole industry
intensifies its engagement.
My vision for the coming year sees
us fighting the tactical battles with the
focused attention and zeal that have been
our industry's hallmark. We will address
the technological, legislative, regulatory
and legal issues with the intensity and
JANUARY 2016 127

American Oil and Gas Reporter - January 2016

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