A drawn out battle in Congress, that has now turned its focus to the Oct. 17 debt limit deadline, could impact the region’s oil and gas industry and some local workers.
The federal closure of the Bureau of Land Management’s local office has already halted the processing of drilling permits. A prolonged backlog could interrupt the industry in southeast New Mexico, said New Mexico Oil and Gas Association’s spokesman Wally Drangmeister.
“As time goes on, it just increases the likelihood of disruption,” Drangmeister said Thursday. “Who knows how long this will go on?”
Forty-nine percent of the state’s oil and gas is produced on federal land, administered by the BLM. BLM offices in New Mexico and Wyoming permit 67 percent of the total wells in the U.S.
“If this goes on long enough, it could impact the whole basin,” Drangmeister said.
Every oil and gas operator that wants to drill must submit an Application for Permit (APD) with its local BLM office.
A Government Accountability Office report, issued Aug. 23, found the Roswell Field Office only received seven APDs in fiscal year 2012, a decline of 61 percent since fiscal year 2007. The Hobbs Field Station received [auth] 283, an increase of 138 percent and Carlsbad took in 679, a bump of 205 percent.
But the report found that, although the BLM only received half as many APDs for federal oil and gas resources in 2012 as in 2007, the agency still performed 17,866 inspections—a nearly 70 percent increase.
In a 2013 internal memo, the BLM also reported that it had not been able to meet the 30-day deadline required by its policy to complete APDs, at a cost of $6,500 each for the operator.
“It takes two to four months to get the permits through the BLM as it is,” Drangmeister said. “Many oil and gas companies have already received permits and have those in hand. No new ones will be issued until the government is current in status.”
The service companies that operate in the Roswell area and any industry employees could be affected, he said.
The Roswell Field Office manages 1,519 wells; Carlsbad manages 8,425 wells; and Hobbs oversees 4,802 wells.
New Mexico also is one of the states with the largest number of Department of the Interior workers, with 4,314. The DOI shuttered National Parks, BLM and the U.S. Geological Survey Tuesday, and furloughed 58,541 of its 72,562 employees. The Roswell office was closed Tuesday morning.
The local office also is possibly facing another awkward situation with its office location that could now be in flux if the federal budget crisis is not resolved quickly.
BLM had recently apparently solicited bids to possibly move its local operation from the office building, at 2909 W. 2nd St.
A bid request was publicized in September, asking for 12,450 square feet of office space and warehouse properties to be located within the boundaries of West Berrendo Road to the north, Second Street to the south, North Atkinson Road to the east, and the Relief Route to the west.
The term would be for at least 15 years.
Harvey Mordka, president of Roswell Investment and Development since the 1970s, submitted his property to the General Services Administration for consideration. The property, the former Glover Meatpacking Company on North Garden, fits the general description, he said.
“I was told Bureau of Land Management was looking for a new location,” Mordka said. “Our property is within the geographic area. We’ve got the zoning. We’ve got the acreage.”
The geographical area may not have the perfect specifications the government seeks. The government might decide to stay put, retrofit a building or buy land and build a new site. The process could take six months to a year, if the BLM decided to relocate at all, he said.
“I’m not so sure their ideal exists (in that location),” Mordka said. “They may need to re-evaluate the concept, especially with what’s going on in D.C. today. It’s nothing that’s going to be immediate. They’ll go through their selection process and how they evaluate it.”
BLM’s existing office is managed by Gregg Barton at Genesis Financial Group in Grosse Ile, Mich. That company was unaware of BLM’s intent to relocate and a representative declined to give details of the lease.
“They have not given any indication they are moving out in the future,” said Wendy, who declined to give her last name. “I don’t have any status on the building.”
The contractor negotiating the government’s bid for Roswell, Jason Lichty of Studley, Inc., in Addison, Texas, said he was not authorized to speak about it.
“I am just going to go with a ‘no comment,’” Lichty said.