Gov. Mark Gordon on Friday welcomed President Joe Biden’s change in policy that would again allow the sale of oil and gas leases.
However, Gordon questioned the impact of the Biden administration’s decision to sharply reduce the number of acres available for lease while increasing royalty rates.
Only 144,000 acres will be made available by the Interior Department for oil and gas drilling — an 80% reduction of land that had been under evaluation for leasing. The royalty rate will be increased by 50% — from 12.5% to 18.75%.
“The announcement of an upcoming federal oil and gas lease sale is welcome news, but long overdue,” Gordon said Friday. “While we don’t know the exact number and location of the Wyoming parcels, after 15 months without a lease sale in our state, to learn that royalty rates will be increased and available acreage significantly reduced is hardly cause for unbridled celebration.”
“I am concerned that these changes will have a chilling effect on Wyoming companies as they prepare their bids,” he said.
On Monday, the U.S. Bureau of Land Management will issue final environmental assessments and sale notices for upcoming oil and gas lease sales that reflect the new approach the federal government has taken in making federal properties available for lease.
Anger
Climate activists, predictably, were angered by Biden’s decision calling it a “betrayal.”
“This is pure climate denial,” Jeremy Nichols, climate and energy program director for WildEarth Guardians, said in a statement. “While the Biden administration talks a good talk on climate action, the reality is, they’re in bed with the oil and gas industry.”
Biden put a halt to oil and gas leasing almost immediately after taking office in 2021.
Skeptical
Despite the move, consumers aren’t likely to notice anything meaningful at the pump as once a lease has been granted, it can take years for any oil to be realized that could be added to supply.
The Independent Petroleum Association of America was skeptical of the announcement.
“This administration has begged for more oil from foreign nations, blames American energy producers for price gouging and sitting on leases,” C. Jeffrey Eshelman, the COO of the organization told the Wall Street Journal. “Now, on a late holiday announcement, under pressure, it announces a lease sale with major royalty increases that will add uncertainty to drilling plans for years.”
Spin
Meanwhile, the Department of Interior attempted to minimize what many are calling a “political announcement.”
“How we manage our public lands and waters says everything about what we value as a nation,” U.S. Interior Department Secretary Deb Haaland said Friday. “For too long, the federal oil and gas leasing programs have prioritized the wants of extractive industries above local communities, the natural environment, the impact on our air and water, the needs of Tribal Nations, and, moreover, other uses of our shared public lands.”
“Today, we begin to reset how and what we consider to be the highest and best use of Americans’ resources for the benefit of all current and future generations,” she said.
Embarrassing
A report released by the Biden administration last November about oil and gas leasing was called “embarrassing” by both Gordon and the Petroleum Association of Wyoming.
The BLM assessed potentially available and eligible acreage in Alabama, Colorado, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Utah and Wyoming. It began analyzing 646 parcels on roughly 733,000 acres that had been previously nominated for leasing by energy companies.
As a result of the environmental review, engagement with tribes and communities and prioritizing the American people’s interests in public lands, the final sale notices will offer approximately 173 parcels on roughly 144,000 acres, an 80% reduction from the acreage originally nominated.
