CASPER, Wyo. — Natrona County School District Trustee Debbie McCullar told other members of the NCSD Board of Trustees on Monday that she received a letter from Wyoming Superintendent Jillian Balow talking about how oil and gas dollars fund education in Wyoming.
McCullar said the letter touched on how President Joe Biden administration’s oil and gas policies could impact education funding in Wyoming and that Balow had asked that school districts have a discussion about the topic and consider sending a letter to Biden discussing how districts could be impacted.
Balow said in a press release in late January that a ban on oil and gas leasing on federal lands would “defund schools.”
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“Wyoming depends on some $150 million a year in oil and gas federal mineral royalties to fund our K-12 schools,” she said.
Trustee Dave Applegate said that the NCSD Board of Trustees was meant to be “a bi-partisan board” but that he had some comments on the topic. Applegate said he works in the oil and gas industry and that a ban on drilling on federal lands not only would have impacts on education funding but that it also would be banning the most regulated sector of the industry.
Applegate said he thinks there is “probably no more environmentally friendly oil and gas [production] than what is done on federal lands.” He added that he thought a federal ban wouldn’t reduce demand for oil and gas and that the ban and would simply push production to places where oil and gas is less regulated.
“If you use hyrdrocarbons ,and most of us I’m sure do, then you should probably want that to come from American soil,” he said. “And federal land is the most heavily regulated oil and gas in the country.”
“I do think there is a way for us to be I guess not overtly political and support Superintendent Balow’s letter.”
Applegate said he thought the board should consider finding a way to support Balow’s request.
Trustee Rita Walsh said that she both supports oil and gas in Wyoming and recognizes that the country may be transitioning toward cleaner energy. She said that an abrupt transition doesn’t seem to make the most sense.
Applegate said he also thought there is room for development of alternative energy and that he doesn’t see why oil and gas “has to be in direct conflict with transition to more green energy sources.”
NCSD Board Chair Ray Catellier said that he had sent Balow’s letter on to members of the board and that they could have further discussion about potentially crafting a formal response at a later date.
Should the NCSD Board of Trustees formally express their concern about the oil and gas ban, they would not be the first in the state to express such concern.
Wyoming politicians and oil producers have expressed anxiety about potential impacts the Biden policies could have on the state’s oil and gas industry, though production won’t come to a halt even under the moratorium.
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 U.S. Energy Information Administration 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.