CHEYENNE — Many of Wyoming’s political and industry leaders were quick to criticize President Joe Biden’s executive order halting new oil and gas leasing on federal lands, saying the pause is likely to have a significant impact on the state’s economy and revenue streams.
Biden announced the ban Wednesday, about a week after he unveiled a 60-day moratorium on new federal oil and gas leasing that drew similar opposition from the state’s leaders. The order signed Wednesday, which was one of several steps recently taken by Biden aiming to reduce the nation’s carbon footprint contributing to climate change, directs the secretary of the Department of the Interior to “launch a rigorous review of all existing leasing and permitting practices related to fossil fuel development on public lands and waters.” It does not indicate when the pause on new leasing activity could be lifted.
The announcement immediately drew a heap of criticism from Wyoming’s elected leaders. Gov. Mark Gordon was strongly opposed to the decision in a statement Tuesday, arguing the president “caved in to a loud segment of the Democratic Party that is pushing to require all policies and decisions to meet a litmus test of climate change, regardless of consequence.”
“The president’s decision to halt federal leasing on oil and gas under the guise of a ‘pause’ is beyond misguided,” Gordon said. “It is disingenuous, disheartening and a crushing blow to the economies of many western states, particularly Wyoming. No matter how it is framed, this action is still a ban on leasing.”
Gordon argued the administration’s action puts “thousands of jobs and hundreds of millions of dollars in revenues per year” in jeopardy. Last month, a study carried out by the Wyoming Energy Authority estimated the state would lose roughly $300 million in annual tax revenue from a long-term moratorium.
“This executive action lends credence to the concerns that the administration is bound and determined to dictate all policies from Washington, D.C., regardless of dire consequences,” Gordon said. “It is a reinvigoration of top-down, Obama-era policies that only served to divide and alienate the very working-class American communities with whom the Biden administration has pledged to unite.”
The ban is all but certain to have an outsized impact on Wyoming, as well as other western states. Roughly half of oil drilling in the state occurs on federal land, along with nearly all natural gas production – about 92%.
The new administration’s order also drew strong rebuke from Wyoming’s congressional delegation. U.S. Sen. John Barrasso, R-Wyo., who is the top Republican on the Senate Energy and Natural Resources Committee, called the order “divisive and illegal” in a statement Wednesday.
“Despite all the hot air from climate alarmists, banning new oil, gas and coal leases on federal land and waters will do nothing to address climate change. Energy producers will simply go elsewhere – likely out of state or overseas,” Barrasso said. “The president’s order will deprive thousands of people in Wyoming of their jobs and a principal source of revenue for public education and other essential services. If President Biden is serious about bringing our country together, he needs to understand that actions speak louder than words.”
U.S. Sen. Cynthia Lummis, R-Wyo., also condemned the decision, adding she plans to unveil legislation Thursday aiming to reverse the decision. Her legislation, called the Protecting our Wealth of Energy Resources Act of 2021, would prohibit the Biden administration from blocking energy or mineral leasing on federal lands without congressional approval.
“The Biden Ban would be nothing short of catastrophic for western states that are already reeling from the decline in energy usage brought on by the pandemic and continued volatility in energy markets,” Lummis said in a statement Wednesday. “It’s a one-two punch that means disaster for energy jobs, families and communities. Through the POWER Act, Congress would reiterate that federal lands should serve not the whims of a radical progressive minority, but the needs of all Americans.”
Barrasso also plans to join as a co-sponsor of the legislation. Meanwhile, a similar proposal was expected to be brought in the House by a Republican congresswoman from New Mexico, another state impacted by the leasing pause, according to a report from The Hill.
U.S. Rep. Liz Cheney, R-Wyo., also opposed the decision, stating the ban “will endanger our economy and threaten our national security.”
“Energy states like ours with a large percentage of federal land will lose out on critical education, infrastructure and health care resources, and the individuals who can least afford it will bear the brunt of this decision,” Cheney said in a statement Wednesday. “Not only that, but this will diminish our ability to produce energy domestically and maintain energy independence, forcing us to rely on our adversaries, which undermines our national security interests.”
Cheney said she intends to fight against the orders with her allies in Washington.
Energy, environmental groups split over order
Biden’s order was also denounced by the Petroleum Association of Wyoming, which described the announcement as “another step in the administration’s plan to eventually shut down all production of natural gas and oil on federal lands.”
“This misguided policy does nothing to reduce the demand or to improve environmental outcomes, but rather increases reliance on foreign sources of energy not beholden to America’s environmental, labor or safety standards while increasing energy costs for consumers,” Ryan McConnaughey, the association’s communications director, said in a statement.
Oil and gas activity brings substantial returns to Wyoming’s coffers. In 2019, the state gathered $1.67 billion in various tax revenues from oil and gas activity, nearly half of which went to K-12 education, according to the Petroleum Association of Wyoming.
“Some are trying to argue that a lease ban is not that big of a deal. We beg to differ,” McConnaughey continued in the association’s statement. “A ban on federal leasing could devastate Wyoming’s economy and upend our way of life.”
However, environmental groups in the state cheered the decision as a necessary step to fix the existing leasing process, although the order does not take away existing leases and permits, meaning many oil and gas operators can continue drilling. Bob LeResche, a board member for the Powder River Basin Resource Council, said the action was long overdue “to stop the looting of public resources as fossil fuel developers accumulate excess leases at today’s bargain basement prices.”
“Thousands of acres of federal subsurface resources are already leased and undeveloped, so this pause in breakneck leasing will neither harm producers with economic resources nor slow our energy economy,” LeResche said in a statement. “What it will do is give our nation time to thoughtfully rationalize and restructure management of our vast national energy resources to meet America’s future needs of climate, restoration, multiple use and revenues.”
LeResche also noted the order establishes a working group to assist communities that depend on oil and natural gas with diversifying their economies.
The order also had the approval of the Wyoming chapter of the Sierra Club. Connie Wilbert, the chapter’s director, said the order “offers us a chance to reset a broken boom-and-bust economy that has benefitted corporate polluters and left communities with more costs than benefits in the long run.
“Excessive extraction on millions of acres of public land in Wyoming has reduced air and water quality, harming human health; damaged wildlife habitat, driving the loss of biodiversity; and left behind thousands of idle and abandoned oil and gas wells that contaminate our environment,” Wilbert said. “Right now, we need immediate action to clean up fossil fuel pollution, support for a just transition to clean energy and reinvestment in communities hardest hit by the outgoing fossil fuel economy.”