Elected Officials and Wyoming Oil & Gas Professionals React to Federal Ban on Drilling
Many of Wyoming’s elected officials, as well as professionals within Wyoming’s oil & gas industry are reacting to the recent news that President Joe Biden is set to announce a wide-ranging moratorium on new oil and gas leasing on U.S. land.
The moratorium (which the dictionary defines as “a temporary prohibition of an activity”) will be announced Wednesday, and it comes just days after Biden’s administration issued a 60-day suspension of new drilling permits for U.S. lands and water. According to the Associated Press, this is all being done as part of Biden’s plan to address climate change.
But what does that mean for Wyoming?
Governor Mark Gordon responded to the news of this moratorium, calling it “beyond misguided.”
Gordon said that calling the moratorium a “pause” doesn’t change what he believes it actually is.
“It is disingenuous, disheartening, and a crushing blow to the economies of many Western States, particularly Wyoming,” he stated. “No matter how it is framed, this action is still a ban on leasing.”
Ryan McConnaughey is the Communications Director for the Petroleum Association of Wyoming and he believes this moratorium will have “devastating” effects on the Wyoming economy.
“I wish I could say we were surprised about what we hear is going to happen tomorrow in regards to the Biden administration doing a year-long ban on new oil and gas leases on public land,” McConnaughey stated. “I also don’t think this is going to be the last thing we see in regards to this topic. The president said on his campaign trail that he was committed to an outright ban on McConaughey the production of oil and gas on federal lands, so I think this is probably just the next step in its evolution.”
McConnaughey continued, stating that, “What this means for Wyoming is absolute decimation to the economy. According to the study that the University of Wyoming released at the end of last year, Wyoming stands to lose $300 million in tax revenue each year through 2025 and, in that same time, 15,000 jobs would be lost. And that’s not just oil and gas jobs; those are restaurants and small businesses that rely on oil and gas money to keep them afloat.”
“So really,” he stated, “this is an attack on the livelihoods of the people of Wyoming.”
In addition to this move possibly impacting countless service industry jobs, Jillian Balow, the Wyoming State Superintendent of Public Instruction, believes that “A federal ban on oil and gas leases will defund schools,” as well.
Balow put out a statement in which she stated she was “taken aback” by the orders of the Biden Administration last week.
“Wyoming depends on some $150 million a year in oil and gas federal mineral royalties to fund our K-12 schools,” Barlow said. “And on the heels of the worst economic year we’ve all experienced in modern history, it is unconscionable that Acting Interior Secretary de la Vega would now do this to our kids. I plan to call my counterparts in these most affected states of New Mexico, Colorado, Utah, North Dakota, Montana, California, and Alaska to discuss advocacy with the Acting Secretary and anticipated Interior Secretary to end the moratorium.”
Barlow stated that she understands “there may be further, similar orders coming in the near future that need to be stopped. I hope that k-12 advocates across both parties will join me in speaking out against defunding our schools. Our students, teachers, and communities simply cannot afford this draconian executive order.”
Barlow is not alone in wanting to stand with her contemporaries to challenge this order, as Liz Cheney, along with 19 other House Republicans sent President Biden a letter late Tuesday afternoon, calling on him to revoke the leasing and permitting moratorium.
“On the campaign trail, and in your inauguration speech, you spoke of unifying a fractured country that is reeling from the health and economic effects of COVID-19,” the letter wrote. “In states like New Mexico and Pennsylvania, you have spoken directly to our fellow citizens and promised the economic opportunities tied to energy development would not be eliminated in your Administration. Unfortunately, your actions have completely contradicted your words. Worse, in the middle of an economic crisis, your Administration is prioritizing virtue signaling and pink slips over paychecks.”
The letter continued to condemn the Biden Administration’s moratorium, and it echoes what many professionals in the oil and gas industry believe as well.
“We had high hopes with his selection of Deb Haaland as the new Interior Secretary, being from New Mexico, a state that is just as reliant on federal oil and gas as we are” McConnaughey said. “But, obviously, that was not the case. During the campaign, when he announced his intention to ban all this, he made it very clear that Wyoming is not politically important to him. And, therefore, he is willing to sacrifice the people of Wyoming for political points with his extreme base that helped get him into the White House.”
Many people in the oil, gas, and energy industry understand the importance of renewable energy, but they don’t think there can be an automatic switch from fossil fuel to renewable energy.
Darrin Moorman, the Vice President of Innovation and Business Development for Moser Energy in Casper, WY believes that energy transition is important and necessary, but that there needs to be an actual transition.
“Here’s the deal, energy transition is necessary and it’s happening,” Moorman stated. “Whether you want to believe it or not, whether you want to accept it or not, energy transition needs to happen. And what I mean by ‘energy transition’ is moving from fossil-based energy to renewable energy. Carbon-based energy is a harvesting exercise, which means there’s a finite amount.
Moorman believes that some people are twisting the idea of energy transition into the idea of climate change. The two, he says, aren’t necessarily related in this case.
“We’re transitioning energy because we are going to run out of it sooner or later,” he said. “But energy transition has nothing to do with AOC’s ridiculous ‘New Green Deal.’ That’s not the real situation. The real situation is that energy transition from fossil to renewable is inevitable. It’s happening. And we need to come up with an orderly fashion to do that transition, so that we can lead the world, rather than be behind it. But, at the same time, you can’t just turn your back on the people who are working and put those people out of work. Shutting off the Keystone Pipeline does nothing but ensure that you get more oil from Saudi Arabia. It does not stem the use of fossil fuels. It’s a ridiculous thing that was done on political grounds.”
Some people, like McConaughey, believe that Biden is acting in order to “score political points.” Biden himself has said, that he is pursuing renewable energy to drive down carbon emissions in order to preserve the earth’s climate.
In his inaugural address, Biden said that, “A cry for survival comes from the planet itself. A cry that can’t be any more desperate or any more clear [sic] now.”
What is not clear, at least at this point, is how this will impact the thousands upon thousands of people working in the oil and gas industry.
But, proponents of Biden’s plan point to the fact there are still thousands of already approved, yet unused drilling permits throughout the country.
According to the Government Accountability Office, oil and gas companies have stockpiled 9,950 approved but unused drilling permits, from 2014-2019. These account for roughly half of all permits approved over that time. Likewise, according to an Associated Press analysis, oil and gas companies have secured thousands more drilling permits in the months leading up to and following the November 2020 election.
EOG Resources, in Houston, has amassed the most permits in 2020. In total, they have about 2,500 federal permits that are already approved or are in the process of being approved.
EOG CEO Lloyd Helms stated in a November investors conference that, “If he (Biden) tries to impose some regulations on how new federal permits are issued, we certainly already have an inventory, a large inventory, of existing federal permits that will sustain activity for several years.”
The same is true of Wyoming. In the same Associated Press analysis, it was said that, “In Wyoming’s Thunder Basin National Grassland, a prairie expanse that abounds wildlife and offers hiking, fishing and hunting, oil companies like EOG Resources and Devon Energy have permission to drill three dozen wells among fields of sage brush.”
So, while Biden’s can and will ban new drilling, it can not take away already approved drilling permits.
Still, those who live and work in Wyoming have the right to be concerned about the future, at least according to Governor Gordon.
“The lost jobs and revenue caused by this action inhibit Wyoming's ability to invest in C02 capture and likewise the ability of the oil and gas industry to contribute to those projects,” Governor Gordon said. “In the longer run, Wyoming may find itself with no choice but to increase the costs of doing business on other energy sources to balance our budget.”
Gordon, like Cheney, is calling on Biden to readdress this situation, one he claims is just a replication and “reinvigoration of top-down, Obama-era policies that only served to divide and alienate the very working-class American communities with whom the Biden administration has pledged to unite.”
Gordon stated that there are other ways to find a happy medium between reducing carbon emission, while keeping the oil and gas industry afloat.
“It is clear President Biden has caved into a loud segment of the Democratic Party that is pushing to require all policies and decisions to meet a litmus test of climate change, regardless of consequence,” Gordon stated. “Any examination of the most recent election results would have to conclude that voters rejected this sort of far-reaching and radicalized platform. There are bipartisan solutions available that support the people working in oil and gas on federal lands as well as reduce carbon emissions.”
Moorman, who has worked in the oil, gas, and energy industry for more than a decade, put it best.
“It shouldn’t be ‘how do we curtail fossil energy,’” Moorman said. “It should be ‘how can we make renewables.' In 1920, there weren’t any arguments about horses or cars, because cars just made more sense. The same thing will happen with electric vehicles. The problem that people are living in today is that they believe it’s ‘either this or that.’ You’re either wanting to drive down the road in your diesel truck chug out black smoke every day, or you’re driving a Prius. People believe that you have to be for one or the other, you can’t be for both, and that’s an impossible situation for us to manage effectively.
“It would be like this,” he continued. “When my great-grandpa went and got his very first car, he didn’t drive it home, go in the barn, and shoot the horse.”