ENB Pub Note: This article was posted on David Blackmon’s Energy Additions SubStack. I will be interviewing him today about several other topics and will add this one to the list. We highly recommend subscribing.
In a striking X post this week, the American Petroleum Institute spotlighted a powerful and unprecedented truth about American energy: Two counties in New Mexico – Lea and Eddy – account for an astonishing 78% of all federal onshore oil production, pumping out 1.3 million barrels per day. The API note comes on the heels of the recent Bureau of Land Management $4 billion lease sale on those very lands in southeastern New Mexico, an all-time record haul for such a sale in the Lower 48 states.
My response on X was simple: “God bless America’s drillers. God bless New Mexico.” I should have included “God Bless the 2nd Trump Administration and its Energy Dominance policy agenda. Oh, well, too late now.
Mind you, this revelation is thick with unintended irony. While New Mexico’s state policymakers have spent years layering on higher severance taxes, restrictive regulations, and anti-fossil fuel rhetoric, Lea and Eddy counties – situated deep in the Delaware Basin portion of the Permian Basin Region – quietly power the majority of federal onshore oil output. These two counties, with a combined population of roughly 130,000, produced about 2.1 million barrels per day of total oil at the end of 2024, much of it from federal lands distributed throughout the area in checkerboard fashion.
That output doesn’t just fuel the national grid and refineries; it fills state coffers with production taxes, royalties, and lease bonuses that benefit every New Mexican. Indeed, the oil and gas industry funds more than 40% of the state’s budget every year despite the best efforts of the majority Democrats to restrict the industry’s operations within its borders. It’s an agenda of economic self-destruction exceeded in scope and political aggression only by California.
Overall, federal onshore oil production tells a glorious tale thanks to the Shale Revolution. According to the Congressional Research Service and Office of Natural Resources Revenue data, output from BLM-administered lands surged 177% between FY2015 and FY2024, reaching 686 million barrels (roughly 1.88 million barrels per day on average) in FY2024. That volume represented about 14% of total U.S. onshore oil production that year. When paired with federal offshore output in the Gulf of Mexico – which EIA forecasts will hold steady near 1.8 million barrels per day through 2026 – the entire federal mineral estate contributes roughly 29% of all domestic crude oil.
The geographic spread of this federal production underscores its national importance. While Lea and Eddy dominate onshore oil thanks to the Permian’s federal acreage, other states play critical supporting roles:
• Wyoming, Utah, Colorado, and Montana host substantial federal gas production and growing oil output, with recent 2026 lease sales generating tens of millions in bonus bids.
• North Dakota and eastern states contribute through targeted sales that continue to draw strong industry interest.
• Alaska stands out for future potential: the current administration has reopened nearly 82% of the National Petroleum Reserve-Alaska to leasing, rescinded restrictive Biden-era rules, and advanced Coastal Plain development in ANWR. These moves could unlock billions of barrels over the coming decades.
Lease activity across federal lands has accelerated dramatically. In calendar year 2026 alone, BLM has already conducted multiple sales, including the massive May New Mexico/Texas offering that netted over $4 billion. First-quarter 2026 sales across 10 states generated $592.7 million. For context, the entire Biden administration produced less revenue from federal lease sales in four years than the Trump team achieved in 2025’s 22 sales alone ($356 million+). In FY2025, BLM approved a near-record 5,740 federal Applications for Permit to Drill – one of the highest totals in 15+ years.
Energy production on federal and tribal onshore lands plus federal offshore areas generated $14.6 billion in revenue in 2025, funding everything from tribal programs and state infrastructure to federal conservation efforts. Over 21.3 million acres remain under lease, with more than 12.4 million acres in active production from 91,000+ wells.
This is energy dominance in action, achieved despite years of federal permitting delays and state-level hostility in key producing areas. The Trump administration’s streamlining of leasing, commingling rules, and environmental reviews, combined with record APD approvals, is finally unlocking the potential that has always existed on federal lands.
The lesson from Lea and Eddy counties is clear: America’s energy future depends on treating federal lands as the national assets they are, not political footballs. We cannot claim supply-chain resilience, AI dominance, or true energy security while leaving vast resources idle. Two counties in southeastern New Mexico prove what’s possible when industry, sound policy, and geology align. It’s time the rest of the country – especially state governments in producing basins – got the message.
