"We're the world's largest producer of natural gas, and we want to continue to do that," Vilsack said Thursday in an interview with The Daily Times.
With November's election heating up, the administration is working to get ahead of public anger about gas prices. Vilsack's interview came on the heels of President Barack Obama's visit to oil and gas fields in Maljamar.
"People have to understand that oil is priced on a global market," Vilsack said. Strong growth in China and India and tensions in the Middle East can boost prices, he said.
"If you have people talking loosely about what could happen in Iran or should happen in Iran at some point in time ... that could affect the price of the product," he said.
The U.S. is importing less than half its oil — 45 percent — for the first time in 50 years, Vilsack said.
"The president has been quite clear about the all-of-the-above strategy that we should be doing everything we can to produce oil and gas," he said.
In Maljamar in southeast New Mexico on Wednesday, Obama said, "if you hear anybody on TV saying that somehow we're somehow against drilling for oil then you'll know that they either don't know what they're talking about or they're not telling you the truth. We're drilling all over the place.
Oil futures closed at $106.74 Friday on the New York Mercantile Exchange, up $1.39.
Gasoline prices in Durango, Colo., rose 48 cents in the past month to $3.781 per gallon Friday, according to AAA. The organization does not publish prices for Farmington, but stations here were advertising similar prices Friday.
Steve Henke, president of the New Mexico Oil and Gas Association, said the industry is pleased with the administration's policies on existing oil and gas leases.
"They're doing well on existing leases and approving permits to drill on existing leases," he said. "That relationship is going well."
But producers and drillers worry about new regulations that potentially could come from the federal government.
"There's considerable concern over some of the regulatory proposals that are rumored to be coming out of the Bureau of Land Management and (Environmental Protection Agency)," Henke said, pointing to possible new rules on hydraulic fracturing.
New Mexico has not seen a single documented instance of water contamination because of hydraulic fracturing, Henke said.
"We feel strongly that we have adequate regulation through the state and on stipulations for permits to drill," he said. "They're attempting to regulate a situation where there's not a problem."
Gwen Lachelt, director of Earthworks Oil and Gas Accountability Project, called for the Obama administration to close hydraulic fracturing's exemption from the Safe Water Drinking Act, and to require fracking companies to disclose the chemicals they inject underground.
Lachelt said she was pleased by Obama's call for ending $4 billion in subsidies to the oil and gas industry.
"That funding can be plowed into clean, safe, renewable energy sources," she said. "There's certainly a lot more we should be doing to move forward."
Henke said the industry would oppose attempts to regulate industry emissions from vehicles, compressor sites and other sources.
Henke said Obama should make a push to convert vehicles, especially fleet vehicles and long-haul trucks, to run on natural gas. Such an initiative could improve demand for natural gas, a commodity suffering from a market glut.
"The industry is doing well in spite of additional regulation, but we would like to see the administration take a more active role in the promotion of natural gas for transportation," he said.