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Gordon supports Wyoming delegation’s challenges to Biden’s oil and gas moratorium


CASPER, Wyo. — Wyoming Governor Mark Gordon’s office said on Thursday that the governor supports Wyoming’s Congressional Delegation in their efforts to challenge President Joe Biden’s executive order halting mining and oil and gas leasing on federal lands and waters.

Wyoming’s U.S.Rep. Liz Cheney has introduced two pieces of legislation titled “The Safeguarding Oil and Gas Leasing and Permitting Act” and “The Safeguarding Coal Leasing Act” to prohibit moratoriums on mining and oil and gas leasing and permitting unless Congress passes a joint resolution approving of such an action.

“I commend Congresswoman Cheney for her continued leadership to protect the people of Wyoming,” Gordon said. “The introduction of the Safeguarding Oil and Gas Leasing and Permitting Act, along with similar legislation for coal, underscores her support of Wyoming.”

Gordon said the leasing moratorium “shows that traditional Wyoming energy industries are being targeted by climate-only activists. By sponsoring these bills, Cheney shows that Congress needs to participate in these brash, unilateral DC-based actions.”

Gordon also expressed support for Wyoming’s U.S. Sen. Cynthia Lummis’ “Protecting our Wealth of Energy Resources (POWER) Act of 2021.” Wyoming’s U.S. Sen. John Barrasso is a co-sponsor of the legislation.

The act would prohibit the president or the secretaries of the Departments of the Interior, Agriculture, and Energy from blocking energy or mineral leasing and permitting on federal lands and waters without Congressional approval. 

“I heartily endorse passage of the POWER Act, sponsored by Senators Barrasso, Lummis, and other western Senators,” Gordon said. “Wyoming, like most Western states, contains significant lands and minerals that are owned by the federal government. For generations, the federal government has recognized that multiple-use of those lands is essential to the economies and environment of states like Wyoming.”

“Unfortunately, a sudden, widespread and devastating halt of federal leasing of fossil fuels and minerals makes that long-honored practice moot. Sweeping actions such as this also fail to recognize the outstanding conservation and multiple-use efforts that states like Wyoming have conducted through partnerships with industry, NGOs, and private landowners.”

Gordon said that Wyoming could potentially lost $300 million in tax revenue under the moratorium, citing a University of Wyoming study.

“Oil and gas industries across the West are hit hard by the Biden administration’s executive action– eight Western states (Alaska, California, Colorado, Montana, New Mexico, North Dakota, Utah and Wyoming) could lose $8 billion in GDP and over $2 billion in tax revenue per year,” Gordon said. “This is a bipartisan issue.”

Most large companies will be able to lean on existing permits to continue producing oil and gas.

The AP reported on Jan. 10 that companies submitted over 3,000 drilling permits to the Bureau of Land Management in a three month period toward the end of the Trump administration and that the BLM approved about 1,400 of these permits. 4,700 federal drilling permits were approved in 2020.

KeyBank Capital Markets Managing Director of Equity Research Leo Mariani told the AP that most companies have up to two years to act on federal permits they have received.

Reuters reported in Sept. 2020 that most producers in Wyoming’s Powder River Basin have “a runway of 12 to 18 months,” citing Jake Roberts at energy investment bank Tudor, Pickering, Holt & Co.

Even if companies are unable to drill on federal lands, they will still be able to pursue drilling on state and private lands. The Wyoming Oil and Gas Commission approved 490 oil and gas permits to drill in 2020.

However, a pro-longed ban on new federal oil and gas leasing and drilling could impact Wyoming more than other oil and gas producing states.

Wyoming in among the top 10 states in terms of natural gas reserves but the EIA says that about two-thirds of natural gas production in the Cowboy State is produced on leased federal land.

While oil production in Wyoming is less reliant on federal leases, the Petroleum Association of Wyoming (PAW) said in October that a federal ban could lead to a 31% decrease in oil production in the state. They said a ban could lead to a 36% reduction in natural gas production.

Regardless of the moratorium, oil and gas production is expected to continue declining through February in the region, according to a Jan. 2021 report from the U.S. Energy Information Administration (EIA).

The EIA uses the umbrella term “Niobrara Region” to refer to oil and gas activity in Wyoming, Colorado and smaller sections of Nebraska and Kansas:

Oil production in the region is expected to decrease about 17,000 barrels per day in the region month over month and natural gas production is expected to decline by 62 million cubic feet per day, according to the EIA.

Oil production from new wells is actually projected to increase by about 17,000 barrels per day in the region, but the EIA says that legacy production (production from existing wells) is expected to decline by 34,000 barrels per day.

A similar pattern is projected for natural gas projection in which declines in legacy production are expected to outweigh production from new gas wells, according to the EIA: