No new oil permits while shutdown is in place

Posted at: 10/02/2013 8:35 PM
By: Lauren Hansard, KOB Eyewitness News 4

New Mexico’s energy producers are taking a hit from the government shutdown.  The Bureau of Land Management has stopped processing permits to drill new wells.    

One of New Mexico’s biggest oil producers talked to KOB Eyewitness News 4.

As it stands, the oil and gas industry can’t drill new wells on federal land.  That means the industry is losing money, and so is New Mexico.

“The oil and gas companies pay the federal government about 12.5% of all revenues. Half of that money goes back to the states. So that’s how New Mexico would get hurt," said Jim Brown, Chief Operating Officer for Yates Petroleum Co.

Yates Petroleum is one of New Mexico’s top producers.  They tell KOB during the shutdown, they are only getting permits to drill on state and private lands.  They’re stuck waiting on federal permits.

“We do have some concern over their approvals of right-of-ways, surface right-of-ways for pipelines.  We certainly would not want to be delayed on those," said Brown.

“When the drilling rigs can't get permits to drill it’s a snowball effect.  It’s going to affect everybody that has anything to do with that well," said David Ancelo.

Ancelo is an oilfield supplier.

“It’s not going to be pretty for anybody in this industry.  It’s going to hurt us all," said Ancelo.

Sources tell KOB the permits at the BLM are stacking up.  And if the stalemate in Washington drags on, the bills could stack up for New Mexico. Right now the oil and gas industry accounts for about 25 percent of the state’s general fund.

So, as Republicans and Democrats continue to debate in Washington, oil country will keep waiting.