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White House Ties Secure Yates' Drilling Rights to Sensitive N.M. Grasslands

For Immediate Release: 
Thursday, July 21, 2005

WASHINGTON, July 21 — For $2 an acre, the Bush Administration has given the rights to drill for oil and gas on New Mexico's Otero Mesa to a company whose White House connections were key to reversing earlier plans to protect much of the area from drilling.

On July 20, the Harvey E. Yates Company, or HEYCO, of Roswell, N.M., placed the only bid for drilling rights to 1,600 acres of the environmentally sensitive Mesa in central New Mexico. A 2004 investigation by Environmental Working Group found that the Yates family controlled almost three times as many oil and gas leases on Western public lands as any other entity.

In the last three election cycles, HEYCO and other Yates companies have given hundreds of thousands of dollars to the campaigns of President Bush and other Republican candidates. After a former Yates lobbyist was appointed to the No. 2 position at the Interior Department, the Bureau of Land Management (BLM) revised a draft plan that would have restricted drilling on about 60 percent of the Mesa, to allow drilling in more than 90 percent of the area.

Environmental Working Group's analysis of campaign contribution data from the Center for Responsive Politics shows that HEYCO and other Yates companies gave almost $300,000 — all to the GOP — over the last three election cycles.

(Note: for details on HEYCO see http://www.ewg.org/oil_and_gas/leaseholder.php?cust_id=-129286;
for details on Yates see http://www.ewg.org/oil_and_gas/leaseholder.php?cust_id=-199080).

According to a 2004 report by the Campaign to Protect America's Lands (CPAL), Yates Petroleum in 2001 paid then-lobbyist J. Stephen Griles more than $40,000 to lobby BLM to "secure funding for BLM staffing." That meant ensuring that an official at BLM would create or revise a land use plan to allow an oil or gas company to drill, CPAL reported.

Shortly thereafter, Griles became deputy Interior secretary. In his new role, Griles met on December 6, 2002, with BLM Deputy Director Jim Hughes and BLM Chief of Staff Conrad Lass to discuss the Otero drilling plan. (CPAL 2004).

While at Interior, Griles continued to receive $284,000 per year under a buyout agreement from his former lobbying firm, National Environmental Strategies (NES), which had represented Yates for several years and continued to represent Yates while the payments were made (CPAL 2004). In 2002, HEYCO's Chairman and CEO, George Yates, held a $250-a-plate fundraiser for Vice President Dick Cheney that was expected to raise $62,500. The event also featured $1,000-per-couple photo sessions with Cheney. (Romo 2002).

In October 2000, the BLM had issued a draft environmental impact statement that protected much of the Mesa. The BLM proposed that there be no surface use of land in sensitive grassland areas in Otero Mesa and that only about 779,000 of the roughly 2 million acres would be open to drilling under the least restrictive leasing terms and conditions. (BLM FEIS 2003, S-2; BLM Draft EIS 2000, 2-28). BLM also proposed that about 160,000 acres would be open to drilling only from remote locations that would not disturb the surface of sensitive areas. (BLM Draft EIS 2000, 2-28). HEYCO's vice president, Steve Yates, repeatedly argued against the limits on surface use "by letter, e-mail and verbal testimony" CPAL reported (CPAL 2004).

Under BLM's final environmental impact statement, issued in December 2003, the grasslands were to be largely open to leasing. (BLM FEIS 2003, S-2). BLM doubled, to 1.4 million, the acreage that could be drilled under the least restrictive terms, (BLM FEIS 2003, 2-24). And BLM reduced by 75 percent the amount of land that would be protected from surface activity. (BLM FEIS 2003, 2-24). In its final decision, BLM in January 2005 opened 94 percent of the Mesa to some level of oil and gas drilling. (Perea 2005, TWS 2005).

New Mexico and a group of conservationists are challenging BLM's management plan in federal court. An agreement filed with the court July 19 will allow continued bidding on leases in Otero Mesa, though it would delay transfer of the leases until early next year, or until the court rules on the legal challenge. BLM finalized its management plan over the objections of New Mexico Gov. Bill Richardson, state Attorney General Patricia Madrid and thousands of citizens.

Richardson has offered an alternative plan for Otero Mesa that would allow some leasing while providing greater protection for water and sensitive habitat. Under Richardson's plan, the 1,600-acre parcel auctioned Wednesday would be off-limits to surface use, meaning that a company could drill under the land only from an adjacent location (Richardson Consistency Review 2004).

History suggests that Otero Mesa will produce a negligible amount of oil and gas. EWG's two-and-a-half-year investigation of drilling on Western public lands found:

  • From 1982 to 2004, the government leased or offered more than 27.8 million acres of public land in New Mexico. (EWG analysis of BLM data 2004).
  • Despite this access, between 1989 and 2003, New Mexico's public lands produced less than 18 days of U.S. oil consumption and 126 days of natural gas consumption (EWG analysis of MMS data 2004). This production amounts to less than one percent of the nation's oil consumption and about two percent of the nation's natural gas consumption over the 15-year period.
  • From 1982 to 2004 Ñ a period in which the government leased more public land for oil and gas drilling than the size of New Mexico, Colorado and Arizona combined Ñ U.S. dependence on foreign oil increased from 28 percent to nearly 58 percent (EIA 2005).
  • There are currently 29 oil and gas leases inside Otero Mesa that have been suspended since 1998 to ensure that a resource management plan could be in place to address significant natural gas development. [Learn more about Otero Mesa].

The BLM itself doubts much gas will ever be found in Otero Mesa. "[T]here's a huge question mark about whether there's ever going to be an economically viable resource that anyone will want to produce," Linda Rundell, BLM's New Mexico director, told the Los Angeles Times last year. "It's really pretty small potatoes." (Cart 2004)


References:

Bureau of Land Management (BLM FEIS). 2003. Proposed Resource Management Plan Amendment and Final Environmental Impact Statement for Federal Fluid Minerals Leasing and Development in Sierra and Otero Counties. Accessed online June 3, 2004 at http://www.nm.blm.gov/lcfo /white_sands_rmpa_eis/white_sands_rmpa_eis.html.

Bureau of Land Management (BLM EIS). 2000. Draft Resource Management Plan Amendment (RMPA) and Environmental Impact Statement (EIS) for Federal fluid minerals leasing and development in Sierra and Otero Counties. Accessed online at http://www.nm.blm.gov/lcfo /white_sands_rmpa_eis/white_sands_rmpa_eis.html.

Campaign to Protect America's Lands (CPAL). 2004. Cash, Connections and Concessions: The Yates Family, the Bush Administration and the Selling of Otero Mesa. March 2004.

Cart, Julie (Cart). 2004. Bush Drilling Plan Brings Foes Together; Ranchers, Hunters and Environmentalists Decry a Bid to Draw Natural Gas from New Mexico Wilds. The Los Angeles Times. February 11, 2004.

Perea, Mary (Perea). 2005. State Sues Federal Government over Otero Mesa. Associated Press. April 23, 2005.

Richardson, Bill. 2004. Governor Bill Richardson's Consistency Review of and Recommended Changes to the United States Department of the Interior, Bureau of Land Management's Proposed Resource Management Plan Amendment and Final Environmental Impact Statement for Federal Fluid Minerals Leasing and Development in Sierra and Otero Counties. Accessed online July 20, 2005 at http://www.emnrd.state.nm.us/EMNRD/Main/Administration /News/GovsPlanforOteroMesa.pdf.

Roberts, Chris (Roberts). 2004. New Mexico Grasslands Become Battleground in Debate over Drilling on Public Property. Associated Press. March 18, 2004.

Romo, Rene (Romo). 2002. VP Boosts Pearce, Iraq Plan. Albuquerque Tribune. October 15, 2002 at A2.

U.S. Department of Energy. Energy Information Administration (EIA). 2005. Monthly Energy Review May 2005, Overview of U.S. Petroleum Trade. Accessed online June 14, 2005 athttp://www.eia.doe.gov/emeu/mer/overview.html.

The Wilderness Society (TWS). 2005. Accessed online July 20, 2005 at www.wilderness.org/Library/Documents /upload/Factsheet_OteroMesa_RODanalysis.pdf.

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