Oil And Gas Not A Fan Of Shutdown, Though Feds Prepare To Restart Permit Processing In Wyoming

Jan 11, 2019

Tom Meites is president of a small oil and gas company in Casper and he's planning a new project. He's begun the lengthy process with the Bureau of Land Management (BLM) to find new parcels for development, but has had to put it on hold.

"With the BLM shut down, the studies on parcels that we've nominated are not happening," Meites said.

He's still hoping to buy that land this year, but now he's not sure when it will happen. BLM is responsible for that environmental review, but most employees are on furlough.

"The longer the shutdown goes on, the longer we all will be unable to go ahead with the work we wanna do," he said.

Meites said there's enough uncertainty trying to predict when the price of oil will be right. A shutdown is hard for a small company like his.

"We're paying a price for it and no business likes being told you can't operate," Meites said.

The oil and gas industry has been doing well in recent years, particularly in Wyoming, for lots of reasons, including the Trump administration's push to open up vast areas of public land for drilling and to speed up the permitting process - plus better technology and cheap land.

Kathleen Sgamma, president of the Western Energy Alliance which is a group of oil and gas companies, said if the shutdown goes on much longer, it threatens to slow all that down... and not just in Wyoming.

"It's just a surprising choice of what is considered bare minimum essentials and what people decide to put resources towards."

"Colorado, Utah, New Mexico, same kind of situation," she said.

There's also a lot of confusion. The BLM says it is still processing online applications to drill, which has prompted criticism that the Trump administration is favoring the energy industry. Companies from around the country have submitted APDs, applications for permit to drill, that the BLM has posted online.

Screenshot taken of APD's submitted and posted during the time of the shutdown. Obtained from a section of the BLM's website.
Credit U.S. Department of Interior Bureau of Land Management

But Sgamma, said the limited staff and confusion could limit application processing beyond 2013 numbers. A report found the government shutdown in 2013 wasn't able to process 200 applications to start drilling.

"Companies are waiting for leases, if you don't have your full lease hold it's hard to do the exploratory work or the full development work that you're planning on, it just causes your development to slip," Sgamma said.

But a Petroleum Association of Wyoming memo obtained secondhand shows permits aren't just being processed, the BLM is also working on relevant activities for them. Four of Wyoming's busiest field offices plan to start doing that work Monday, January 14th. The memo also reads environmental and archeological reviews are not happening during the shutdown. The budget lasts for up to two months, accounting for a limited number of people.

Amy Snover said it's disappointing the Interior Department is prioritizing oil and gas over the many other areas in need of resources. Snover leads the Northwest Climate Adaptation Science Center, which is one of eight federal-academic partnered facilities focusing on finding solutions to climate change.

"It's just a surprising choice of what is considered bare minimum essentials and what people decide to put resources towards," she said.

Nada Culver of the Wilderness Society agrees. She's concerned about places where drilling is already happening. She worries about a lack of oversight if there's a spill or a leak from a well pad. BLM's shutdown plan says there are essential employees on the ground for: inspection, enforcement and emergency response.

But, "I would definitely worry that BLM is not paying any more attention to than it ever does, and would probably be paying less attention to than it does," said Culver. "Workers are not being paid, there's nobody to supervise, and certainly there's not a lot of incentive or ability to get out and about right now."

Meanwhile, there's another round of oil and gas lease sales in February and March. Some in the industry worry that if the shutdown drags on, that won't happen. But environmental advocates say an uninterrupted lease sale could mean work behind the scenes from the BLM during the shutdown. They say that should not be happening.