A directional drilling rig on public lands in Wyoming (H/t Bureau of Land Management/Flickr, Creative Commons)
A ban on federal leasing and public lands could have devastating effects on Wyoming’s economy, according to a Sept. 9 analysis released by the Petroleum Association of Wyoming (PAW) and the American Petroleum Institute (API).
Democratic presidential candidate Joe Biden has spoken out publicly in favor of such a ban, promising to prohibit all new leasing for oil and gas exploration on public lands and waters, as stated on his candidacy website. The analysis, released Tuesday, examines exactly what this could mean for the country as a whole, and for the state of Wyoming in particular.
Wyoming accounts for 38% of the country’s onshore natural gas production and 16% of its oil production, according to current data. If federal mineral leasing was banned in the U.S. and the Cowboy State, the analysis finds that oil production would likely decrease by 31% and natural gas production would decrease by 36%.
Over 33,000 jobs would be lost in Wyoming alone, and the state stands to lose about $640 million in revenue.
The analysis finds U.S. oil imports could increase by as much as two million barrels per day by 2030, and the country’s natural gas exports could decrease by as much as 800 billion cubic feet by the same year.
The federal government owns 48.1% of all surface estate in Wyoming, according to information found on the Ballotpedia website, and 10.6 million acres were leased for oil and natural gas exploration and production in fiscal year 2014. The state produced more natural gas on federal land that year than any other state, according to the site.
“Given that 50 percent of all lands in Wyoming are owned by the federal government, a ban on federal leasing and development would decimate the natural gas and oil industry and Wyoming’s economy along with it,” PAW President Pete Obermueller said in a release.
“This policy would damage both national security and environmental stewardship while devastating Wyoming’s middle class, local communities and public-school system.”
In what could be seen as a silver lining for places like Campbell County, a ban on federal oil and gas leases would likely have a positive impact on coal, according to API. A reduction in natural gas production would cause the gradual shift from coal-fired power plants to gas-fired plants to reverse itself and coal production could increase by up to 15% by 2030.
But there’s a dark side to this silver lining, according to Campbell County Commissioner Colleen Faber.
Much of the lands in Campbell County are split-estate lands, according to Faber. This means that the person that owns the surface of the land doesn’t necessarily own the rights to what lies beneath it. In Campbell County, approximately 18% of surface ownership is federal, according to Faber, but the federal government owns 83% of the mineral rights.
“As for the potential for a ban of federal mineral leases, this would impact the mineral ownership side of things, which, in Campbell County, is significant,” Faber said Friday.
The revenue generated by oil and gas in 2019 was twice the federal coal revenue, she added. Oil and gas production increased that year, while coal decreased. Coal has decreased from a record production amount in Campbell County of almost 450 million tons to approximately 250 million tons in just over a decade.
Plus, a ban on oil and gas leases might very possibly be extended to coal leasing.
The Obama administration enacted a moratorium on new federal coal leases in 2016. With the support of industry and Campbell County Commissioners, that moratorium was lifted by the Department of Interior in 2017. The lifting of the moratorium has since been challenged in the federal courts by green groups opposed to the use of coal because of its impacts on the climate.
Having multiple energy sectors for revenue so that one can offset the other when market prices and production volumes fluctuate is a large part of the Campbell County economy, Faber said. If all federal mineral leasing was banned, the impacts to Wyoming and Campbell County would be devastating.