How big oil keeps a grip on New Mexico – with the help of a major lobbyist

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How big oil keeps a grip on New Mexico – with the help of a major lobbyist

An oil drilling rig looms over a house in Eddy county, New Mexico.

Records show the firm FTI and its fossil fuel clients benefit from local government ties

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for Floodlight and Adrian Hedden for the Carlsbad Current-Argus

Last modified on Sun 11 Jul 2021 06.02 EDT

When Joe Biden paused oil and gas drilling leases on federal lands earlier this year, the alarm bells rang in south-eastern New Mexico.

Officials in Eddy county – which, along with neighboring Lea county, holds New Mexico’s share of the oil- and gas-rich Permian Basin – immediately worried about potential economic fallout.

“This news is exceptionally disappointing,” county manager Allen Davis wrote in an email to colleagues. “The message couldn’t be more clear: south-east New Mexico is not a business friendly for an industry that has sustained the state of New Mexico finances for decades [sic].”

Situated in the Chihuahuan desert of New Mexico’s staunchly Republican south-east region, Eddy county is a rural, industrial area, where the top employers are in the mining and oil and gas industries. And county leaders appeared to be depending on their influential allies, including the international lobbying firm FTI Consulting, to keep it that way.

FTI, best known for consulting large corporations, has previously worked on behalf of major oil and gas companies like ExxonMobil, Chevron and Cimarex.

But for the past several years, it has also had lobbying contracts with much smaller clients: Eddy county and the city of Carlsbad, the county seat.

Emails, contracts and other records obtained by Floodlight and the watchdog organization Documented show how FTI has used its footholds in Carlsbad and Eddy county for years to help push pro fossil-fuel messaging and policy. At the same time, FTI has been able to give its energy company clients easy access to local officials. The firm and one of its spinoffs are not registered as lobbyists with the state.

In the first quarter of this year alone, Carlsbad and Eddy county together paid at least $50,000 for FTI’s influence services. These publicly funded lobbying efforts have helped to maintain the fossil fuel industry’s stronghold in New Mexico – a state where Indigenous communities have criticized previous oil and gas policies as environmental racism because of the long-term impact on their health and land.

FTI has a reputation across the US for running influence campaigns that give the impression they were started by local concerned citizens, despite being funded by big oil, a practice known as astroturfing. The New York Times reported that FTI staffers help run an organization called New Mexicans for Economic Prosperity, a coalition of business associations and other partners. Among them is the New Mexico Oil and Gas Association, which advocates for “responsible development” in the state, per the group’s website.

While it’s unclear exactly what FTI’s lobbying has achieved in southeast New Mexico, the firm has close ties to the extractive industries, and its relationship with the small localities of Carlsbad and Eddy county is unusual, especially for a company of FTI’s size.

For Carlsbad and Eddy county, contracting with FTI was one way of trying to maintain the drilling status quo.

One way FTI has used its influence on behalf of New Mexican county officials is by helping wrangle press. When Eddy leaders needed help pushing back against Biden’s drilling order earlier this year, they got in touch with Jeff Murray, a former Democratic congressional staffer and a high-powered lobbyist working with FTI Consulting.

Murray offered to help them get “friendly press”, including in the conservative Washington Examiner, adding that it would be “a good opportunity to get our story out to a wide audience”, according to an email obtained by Floodlight.

A few weeks later, the Examiner published a quote from Davis, the county manager, in which he criticized Democratic governor Michelle Lujan Grisham’s response to the drilling lease moratorium: “When the oil and gas production from Eddy and [nearby] Lea counties provide 35% of her state’s general revenue money, you’d think she’d want to understand how the bread is going to be buttered.”

Soon after, the governor publicly said she was seeking a waiver to exempt New Mexico from the order, a move that environmentalists strongly opposed.

State representative Jim Townsend, a Republican from Artesia, New Mexico, said oil and gas “ought to work hand-in-hand” with local government officials.

“They (oil and gas industries) employ lots of New Mexicans, they pay lots of taxes and they have a big impact on our state. I’m a big proponent of getting employers at the table equitably and within reason,” he said. “Most of those jobs are high-paying, career-based jobs. They deserve a significant seat at the table.”

Carlsbad’s mayor, Dale Janway, defended the city’s work with FTI and said the primary reason for its contract with the firm was to consult on nuclear energy waste regulations issues at the federal level. He said the oil and gas industry keeps Carlsbad’s economy thriving.

“Given the thousands of local residents who work in the oil and gas industry, there’s clearly going to be a correlation between supporting this industry and supporting our community,” Janway said. “Our governing body is always going to do what we feel is best for Carlsbad and its citizens.”

Drilling brings money, but at a cost

Big oil’s presence has long been felt in the southeastern corner of New Mexico, where Eddy county sits.

The extractive industry took hold in the formerly humble ranching community first for the mineral potash and later for oil and gas – overwhelming roadways with truck traffic and making housing less affordable as transient workers moved into apartments, RV parks and hotels.

The area is home to the Carlsbad Caverns national park and the Guadalupe Mountains national park, major tourist sites that could be threatened by pump jacks and pipelines. Along the Pecos River, wildlife could be threatened by expanded industrial activity, including the endangered Texas hornshell mussel.

Oil rigs stand in the Loco Hills field on US highway 82 new Artesia.

Critics say a tight relationship among government officials and the fossil fuel industry, facilitated by an aggressive lobbying firm, is not in the best interest of Carlsbad residents.

Nicole Ghio, senior fossil fuels program manager at Friends of the Earth, said funneling local tax dollars to oil lobbying firms derails needed reforms for the people of Carlsbad and Eddy county.

“For far too long, front-line communities have dealt with the irresponsible boom-bust cycle of fossil fuel development while being saddled with clean-up costs, exposed to toxic pollution, and the reality of climate change,” Ghio said.

Oil and gas drilling, which has boomed in Eddy county and is only expected to grow, is a major driver for ozone and other kinds of air pollution that cause health problems and are driving the climate crisis.

Air quality in Eddy county is among the worst in the nation, according to the American Lung Association, which gave it an F grade for ozone pollution – which can cause myriad health problems from chest pain to reduced lung function.

Rather than moving away from these industries, Eddy county officials are doubling down. After all, the local government – like the rest of New Mexico – relies on tax revenues from drilling. Oil and gas taxes were expected to contribute more than $30m to Eddy county in fiscal year 2021.

The industry often touts its contributions to the state budget, especially for public school funding, which in fiscal year 2020 totaled over $1bn. However, the state’s public services – including its schools – are ranked among the nation’s worst.

Ghostwriting and unregistered lobbying

Late last year, when both presidential candidates were debating how to handle oil and gas drilling leases on federal lands, FTI’s Jeff Murray stepped in to help local leaders in the south-eastern New Mexico region craft their response.

He wrote a letter to Joe Biden and Donald Trump that extolled the virtues of oil and gas drilling in New Mexico. “Energy is one of the top industries in New Mexico, and more than half of oil production and nearly two-thirds of natural gas production takes place on federal lands in our state,” he wrote.

Murray then sent the letter to Eddy county officials, asking them to sign it. All five county commissioners as well as Davis, the county manager, signed, and a county letterhead was attached. FTI’s messaging was sent to the president and the future president under the banner of a county government.

FTI has fostered relationships between local New Mexico officials and leaders of some of its large energy clients. For example, in 2019 Murray organized a trip to Washington DC for the former Eddy county manager as well as current County Commissioner Ernie Carlson. On the agenda were meetings with officials for Cimarex and Chevron – both of which have been FTI clients and drillers in Eddy county.

In addition to its work on the federal level, FTI has lobbied New Mexico state officials, including Democratic House speaker Brian Egolf. FTI representatives met with Egolf numerous times in recent years and even threw him a private campaign fundraiser, according to documents obtained by Floodlight and Documented. FTI’s Murray made a $1,500 in-kind donation to Egolf’s PAC.

However, neither FTI nor Jeff Murray are registered as lobbyists in the state’s database. Murray did not respond to a request for comment for this article.

Delaney Marsco, senior legal counsel for ethics at Campaign Legal Center, said the public has a right to know when special interests are paying to influence public officials.

“FTI is a sophisticated actor. If it’s evading lobbying registration requirements in New Mexico, which appears to be the case here, that’s a big problem – it means the public is being kept in the dark about FTI’s influence efforts,” Marsco said.

Murray left FTI in February to start his own firm, 535 Group LLC. Records show that 535 Group isn’t a registered lobbyist in New Mexico, either, though it had a $10,000 contract with Carlsbad and a smaller one with Eddy in 2021. Murray’s work in New Mexico appears to be the same in scope as when he was an FTI employee; the firm contracts with 535 still.

Despite the health and climate risks to reliance on a fossil fuel economy, officials in south-east New Mexico continue to push drilling. Davis, a top public official in the county, defended FTI’s pro- oil and gas lobbying in an email.

He wrote that there “is a lack of understanding about the business and fundamental economic drivers” that will be necessary to transition away from fossil fuels.

But Kayley Shoup, a Carlsbad-based organizer with the environmental group Citizens Caring for the Future, said local leaders are pushing a false narrative.

It “keeps our local community from having a seat at the table when it comes to this long economic transition that our country is and will be undergoing,” Shoup said.

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