Wyoming’s oil and gas industry could get slammed by more than $900 million in lost revenue and lose nearly 3,000 jobs under proposed changes in how federal land is managed in southwestern Wyoming.
The industry hasn’t ruled out the possibility of litigation to challenge the Bureau of Land Management’s “flawed data” used to develop its preferred plan. Oil and gas producers also say the Rock Springs Resource Management Plan is an attempt to take off the table a lion’s share of the 3.6 million acres managed by the BLM’s field office in the Rock Springs area.
In written comments about the BLM’s preferred Alternative B of the plan that leans heavily in favor of conservation, oil and gas companies say it could reduce economic activity in Wyoming’s oil and gas industry by $907 million annually. That would come with a loss of 2,920 jobs, according to an estimate provided by two energy trade groups.
The hit also equates to $211 million in less labor earnings in the planning area.
“These are not meaningless, rounding error impacts, but would have generational impacts to people living in the (Rock Springs area) and beyond,” wrote executives from the energy trade groups to the BLM on Wednesday.
“This is very bad for oil and gas. That’s very clear,” Pete Obermueller, president of the Petroleum Association of Wyoming, told Cowboy State Daily about the proposed BLM rule change.
He also says the plan is riddled with and based on flawed data.
“This (Biden) administration isn’t interested in hearing from oil and gas,” he said.
Rigged Reports
Obermueller’s group, along with the Western Energy Alliance, wrote in a Wednesday letter to BLM State Director Andrew Archuleta that their reaction to the proposed rules was “one of shock.”
Litigation hasn’t been ruled out as a response to Alternative B, through it may still be far off from actually happening.
Trona and mining groups, as well as Gov. Mark Gordon, also submitted feedback on BLM’s proposed Resource Management Plan (RMP) and raised concerns about its economic impacts. Among their gripes is that the BLM used flawed, incorrect and old data to make the numbers work.
Gordon concurred with the energy groups that the BLM data is “grievously out of date, and just plain wrong” and “is so far removed from reality.”
Gordon wrote that he could not support a plan that attempts to make such broad policy decisions based on outdated and easily refuted data.
Obermueller told Cowboy State Daily said that BLM is using the plan to “essentially end current and future leases” in the Rock Springs area.
According to the letter submitted by the two energy groups, BLM intends to close 2.5 million acres to future oil and natural gas leasing, and shut almost 800,000 acres currently leased when the terms of those contracts expire.
Wednesday was the deadline for public comment on the Rock Springs RMP.
Flawed Data
Obermueller says BLM’s analysis is riddled with flawed data.
New drilling in the area — or spudding — was overestimated by BLM by more than 1,800% and was based on old data tapped from 11 years ago, he said. Neither did the BLM consider more advanced drilling methods to draw oil and gas from the ground.
Based off the BLM data, the agency estimates 6,700 new wells being drilled over the current 20-year life of the RMP.
The trade groups reconstructed how many spuds were drilled using their own figures, coming up with an overestimation by the BLM of oil and natural gas development of 1,867%.
BLM Spokesman Micky Fisher said the agency’s proposed rule is far from complete, and changes are likely to happen with the final land management rule in Rock Springs.
Fisher conceded that BLM’s “preferred alternative” would stifle oil and gas development the most, but more work must be done before anything becomes final.
“It is really important to know that we just closed out public comment, and we received a ton of feedback from Wyomingites. Nothing is final,” Fisher said. “There are a whole range of alternatives on the table. BLM didn’t create this in a vacuum. It was a huge team effort.”
A spokesman with the Petroleum Association of Wyoming also doesn’t rule out litigation.
“The BLM relies on data that is more than a decade old. Several technological advances have happened in the last several years, and the data just isn’t accurate,” said Ryan McConnaughey, the association’s vice president and director of communications.
“We’ve not made our final determination” about litigation, he added. “The reality is that anything is on the table now. The impact that this plan could have on the industry are so astronomical both in the communities in southwestern Wyoming, and the industry as a whole.”
Pat Maio can be reached at pat@cowboystatedaily.com.
