CASPER, Wyo. — Wyoming’s U.S. Senator John Barrasso’s office said on Friday that the senator “demands answers” regarding the Biden administration’s oil and gas leasing ban on federal lands and waters.
Barrasso has sent a letter to Acting Secretary of the Interior Scott de la Vega where he argues against the moratorium on gas leasing and permitting and expresses concern that there may be inconsistency in how the ban is being applied in different states.
“I write to express my strong opposition to two recent orders imposing a moratorium on oil and gas leasing and permitting on federal lands: Secretarial Order No. 3395 and President Biden’s Executive Order No. 14008,” Barrasso said. “While administration officials have stated that these orders do not affect activities on existing leases, oil and gas producers operating on federal land in Wyoming have told me that the Bureau of Land Management (BLM) is failing to issue permits necessary for oil and gas production on existing leases.”
Article continues below…
“It has also come to my attention that BLM is proceeding with a lease sale in Nevada and a variety of permitting activities in New Mexico, which BLM is not conducting in Wyoming. It is imperative that you clarify which activities BLM will conduct under Secretarial Order No. 3395 and not treat Wyoming differently than Nevada or New Mexico.”
In the letter, Barrasso cits a section of Secretarial Order No. 3395 which states that the moratorium does not “limit existing operations under valid leases.”
Barrasso continued: “On Wednesday, January 27, 2021, Gina McCarthy, President Biden’s National Climate Advisor, publicly stated that the President’s Executive Order No. 14008 ‘is not stopping permitting. It’s not stopping fracking.’ That same day, Jennifer Granholm, whom President Biden has nominated to be Secretary of Energy, provided sworn testimony to the Senate Committee on Energy and Natural Resources that, under the administration’s orders: ‘the licenses that currently are operating are not going to be disrupted. They will continue to operate…they can continue to permit and deploy and extract energy from.’ Ms. Granholm added ‘the moratorium on leases is prospective. It does not apply to those who are currently operating.’”
Barrasso said he has spoken with oil and gas producers who told him they were unable to obtain permits needed to produce on existing federal leases in Wyoming.
“At least one oil and gas producer has reported to me that BLM is permitting activities in New Mexico that it is not permitting in Wyoming,” Barrasso said. “In addition, I have come to learn that BLM will proceed with an oil and gas lease sale in Nevada on March 9, 2021, but does not appear to have plans to proceed with a lease sale in Wyoming scheduled for March 15, 2021.”
Barrasso provided a list of questions in the letter he said were aimed to clarify whether the Biden administration is treating New Mexico or Nevada more favorably than Wyoming and other states. Those questions along with the full letter are available online.
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.