Since President Joe Biden issued an executive order ending oil and gas leases on federal lands, some have worried about the economic impact it has had in Wyoming, while others are happy with the decision. .
While the executive order does not prevent oil and gas companies from using current leases, it does prevent companies from obtaining new leases on federal land, which in Wyoming is the destination of most businesses.
According to data from the Wyoming Oil and Gas Conservation Commission, of the 188 oil and gas wells approved since January, 80% of them are on federal land.
However, according to a Government Accountability Office report, from 2014 to the end of 2019, there were 9,950 permits approved but not used to drill on federal lands.
Dave Jenkins, president of the Conservatives for Responsible Stewardship, said he approves of the moratorium because it gives Congress time to balance the federal leasing system.
“They buy it cheaply when we should get higher prices … today’s economy is different, and we derive a lot more value from recreation and tourism, which brings people to the States to spend money and stimulate economic activity. “
For Wyoming in particular, which brings in a large amount of money for the oil and gas industry, Jenkins said he could take advantage of the state to try to diversify its revenue.
“States like Wyoming, if you depend too much on oil and gas as an economic engine, you’re going to be in trouble soon because the economics of all of that is changing,” Jenkins said. “The demand for oil and gas will decline as the transportation sector becomes electrified. It would make a lot of sense for Wyoming to diversify its revenue streams and think long term, rather than just putting all its eggs in oil and gas. basket.”
While Jenkins is hoping Wyoming might change course, Ryan McConnaughey, director of communications for the Wyoming Petroleum Association, sees Biden’s order as an attempt to shut down the oil and gas industry.
“I think it’s really just a promise from the Biden administration to pursue its goal of eliminating oil and gas on federal lands, and will have devastating effects on the state of Wyoming, its workforce. work and its income. “
Jenkins said the moratorium wasn’t much of a problem because oil and gas companies had a large number of leases on hand, while McConnaughey said this was incorrect due to the fact that many of them were owned by larger companies.
“Some companies have leases that they can continue to deal with, but others don’t, a lot of our small and medium operators don’t have the capital to secure leases for long-term planning,” said McConnaughey. “A lot of these leases once acquired take years to develop, so if we see this moratorium continue, there could be a gap in drilling activity in the state of Wyoming.”
McConnaughey said there were other issues that arose because of the executive order, with some undistributed rental bonuses to businesses having to go through the office of the Bureau of Land Management in DC rather than the county in which they operate. .
The Wyoming Petroleum Association is also a party to a lawsuit brought by Governor Mark Gordon and several other states to end the executive order.
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