Inauguration Day, A Deadline As Some Prepare For Possible Energy Restrictions

Dec 11, 2020

A state legislative committee is discussing the last stages of approval for a major oil and gas project in Converse County. The U.S. Department of Interior just has to sign the Record of Decision (ROD), which Select Federal Natural Resource Management committee members like Douglas Sen. Brian Boner is anxious to finish or even speed up.

"Especially with everything that we're faced with, with a potential new administration slowing down permitting for oil and gas, I think it's good to have at least the opportunity or the potential of having an expedited process," he said.

APDs received since January. Graphed by Wyoming Public Radio.
Credit BLM Data

The Converse County Oil and Gas Project would allow 5,000 new oil and natural gas wells to be drilled across roughly 1.5 million acres over 10 years. The process has been in the works officially since 2014.

State and local leaders are nervous that if a signature doesn't come in weeks, it might instead take years within a new administration.

If the current administration does sign the ROD before President-elect Joe Biden's inauguration day, that would ease some anxiety. Not just for operators who want to drill, but for the state of Wyoming, whose financial situation isn't in the best situation right now, and depends on oil and gas.

"We recommended it be signed on Dec. 15," said Randall Luthi, Gov. Mark Gordon's Chief Energy Advisor. "We all know elections do have consequences and we need this in place."

The pressure to sign a major oil and gas project is just one impact of an election with huge implications. Energy producers are permitting more land to drill. Businesses are considering diversification. Environmentalists are gearing up for a fight. And the state, alongside oil and gas advocates, are doing the same.

Restrictions to public land drilling, permitting, or leasing isn't necessarily certain. A specific policy is still in question after it was left off the official Biden-Harris Transition priority list post-election. Still, for Sen. Boner, it's not worth the risk.

Sen. Brian Boner
Credit Wyoming Legislative Service Office

"It's gonna be of utmost importance to everybody in the state that we have a clear-eyed understanding of the potential effects of these policies which at this point are a campaign promise," he said.

If there is some kind of restriction, it could be disastrous. University of Wyoming economics Professor Tim Considine put together and presented a preliminary report illustrating possible limits to public land extraction and its impacts to Wyoming's economy to the committee.

"It blows a big hole in the Wyoming budget, you know, it's going to make a bad situation even worse," he said.

His presentation considered three scenarios, including a leasing moratorium and an outright drilling ban. Over 20 years, it predicts an average of 26,000 jobs and $21 billion lost in oil and gas revenue.

In case the Biden administration does try to create restrictions, litigation is certainly a possibility, according to Pete Obermueller, president of the Petroleum Association of Wyoming. Like the state, he's mainly gathering knowledge at this point though.

"We'll make sure that we're fully up to speed on what our options are on all these things in order to protect Wyoming's industry," he said.

Obermueller's worry is certainly reflected in many local businesses that rely on oil and gas. But other larger operators active in Wyoming seem at least outwardly neutral. Some say they just don't believe it will happen. One reason is because it would be too devastating to the state.

Occidental Petroleum, which bought Anadarko Petroleum, considered another reason during a recent earnings call.

"I believe that there's going to be other things that are much more urgent for soon-to-be President-Biden to take on," said Vicki Hollub, Occidental CEO.

Billy Helms, chief operating officer of EOG Resources, a leading Wyoming producer, said on a recent conference call they have plenty of federal permits to last a while, "and then beyond that, we'll work with the administration on whatever regulation and permitting restrictions are out there to see how we access our land."

Obermueller said it's just hard to know right now what the true impacts will be given there just aren't any specific policy recommendations.

"I'm a bit of a pessimist about these things, and so it's possible that it wouldn't be as bad for us as what I fear," he said.

Preliminary Report Predictions of Losses in Oil and Gas Revenues in Various Scenarios.
Credit Wyoming Legislative Service Office

His worry though is certainly reflected in some numbers. There was a surge in applications for permits to drill on federal land prior to the election, starting in September, which Obermueller and other experts say could be an effort to get out ahead of any possible restrictions.

While some are preparing for defense, environmentalists active in Wyoming are preparing to go on offense. Kate Hudson, Western U.S. advocacy coordinator with the Waterkeeper Alliance, is already thinking about new actions. She's worked with several environmental organizations to combat quarterly lease sales for years.

"This coalition of organizations see, finally, a light at the end of the tunnel, an opportunity for the new administration to stop the bleeding; to stop the leasing of any more public lands," said Hudson.

Post-election, this coalition is still pushing back against an upcoming federal lease sale in Wyoming coming up Dec. 15-17. This time, though, the coalition is calling it a "last gasp assault," and then calling on the Biden administration to abandon fossil fuel extraction on public lands to address climate change.

"We need to start reversing this or we're going to run out of time in terms of the climate impacts that we're looking at," said Hudson.

Petroleum Association's Obermueller and other political leaders dismiss the idea that ending federal leasing would limit climate impacts, saying the demand would move elsewhere and that it's an expensive way to reduce emissions.

Hudson pushed back that there isn't enough private land to replace the public land made available for drilling, adding that private land is typically more expensive with tougher regulations.

With a new administration, Hudson said her coalition is preparing to push for changes they want including an executive order ending new lease sales and reversing executive orders intended to expand oil and gas leasing on public lands on Biden's first day in office.

For now, with no policy recommendations yet, it's a waiting game with interests in Wyoming holding onto their wish lists, and dread lists, ahead of Inauguration Day, Jan. 20.