In December 2020, Kirkwood Resources bought and paid for seven oil and gas leases on almost 2,300 acres for $13,047.
That was just before President Joe Biden’s administration came on board.
Those leases, along with dozens of other leases that Wyoming’s oil and gas industry paid a collective $7 million for, have yet to be released four years later, despite repeated requests by Kirkwood and the other oil and gas companies involved.
The BLM has told Kirkwood it can’t issue the leases because of ongoing litigation surrounding the 2020 lease sale, an answer that hasn’t sat well with Wyoming’s oil and gas industry.
“The Mineral Leasing Act says they have to issue a lease within 60 days of a sale,” Kirkwood Oil’s landman Steven Degenfelder told Cowboy State Daily. “BLM has more than $7 million in lease bonuses they are holding without issuing leases, which are not subject to a lawsuit.”
Degenfelder, like a lot of other people in the oil and gas industry, have been crossing their fingers and toes just hoping for a Trump administration change.
Tuesday, they got their wish when Donald Trump was elected to a second term in office.
“I’m hopeful that with the new administration, this injustice can be rectified,” Degenfelder said. “It’s quite an injustice. As far as I’m concerned, anybody who buys something and pays for it and doesn’t get it counting on now near four years, something is wrong with the bureaucracy.”
Leave The Oil To Me, Bobby
It didn’t take long for Trump to start talking about the oil and gas industry after he was announced the winner of the 2024 presidential election.
“I just said, but Bobby, leave the oil to me,” Trump told supporters after he was announced the winner, referring to Robert F. Kennedy Jr. whom Trump has said will be involved with his administration.
Kennedy also is a well-known environmental activist.
“We have more liquid gold than any country in the world,” Trump continued. “We have more than Saudi Arabia. We have more than Russia. Bobby, stay away from the liquid gold. Other than that, have a good time, Bobby.”
While the comments didn’t address any concrete policy issues Trump might take during his second term of office, they do make it pretty clear he intends to strongly support the industry.
Trump also repeatedly along the campaign trail promised he would “drill, baby, drill” if he won.
“It’s going to be interesting to see,” Petroleum Association of Wyoming Vice President Ryan McConnaughey told Cowboy State Daily. “We’re still waiting on the results from the House, but obviously a Trump presidency and the Republicans taking back the Senate should be good news for Wyoming’s oil and gas industry. We’re definitely excited about it.
“And having people like Sen. (John) Barrasso in the leadership in the Senate should definitely be a good thing for the industry and a good thing for Wyoming.”
McConnaughey cited the curtailment of federal oil and gas leases as one of Wyoming’s big concerns.
“The Biden administration, from the very beginning, has said that one of their goals was to eliminate drilling on federal lands,” he said. “And, in Wyoming, where 75% of the mineral estate is controlled by the Feds, that’s a concerning statement.”
Biden Headwinds
Wyoming’s oil and gas industry has faced numerous headwinds under the Biden administration besides the curtailment of oil and gas lease sales.
The EPA, for example, announced new rules to cut emissions from oil and gas wells. These included bans on routine flaring at new wells as well as comprehensive monitoring for methane leaks and changes to equipment standards that have increased the cost of industry doing business.
The SEC, meanwhile, has been working on final versions of new rules that will require climate-related disclosures, including emissions reporting.
Those are scheduled to be released sometime this year, and they’re aimed at cutting off the stream of capital that fossil fuel companies need to operate.
The Biden administration also reversed Trump’s streamlined permitting regulations in 2022, which had aimed to expedite infrastructure projects like oil and gas pipelines and LNG plants, removing some of the red tape and hoops they had faced.
And a range of tax credits for renewable energies, as well as for things like electric vehicles, were also approved during the Biden administration.
To the extent those encouraged more people to buy electric cars, they are reducing the overall demand for oil and gas.
Lacking In Detail
So far, Trump has not had many specifics about what he will do on any of these particular policy points, though his previous administration is perhaps a starting point for an idea about what actions he might take.
Energy economist and University of Wyoming Associate Professor Rob Godby said he expects that Wyoming’s oil and gas industry will be optimistic that restrictions like the ones on federal leases and the like will be reduced or eliminated, along with other measures they had disliked.
“But that’s as much as you can really say right now, given the fact that there’s like no concrete policy,” he said. “There’s no direction about any kind of changes in organization. The Biden administration policies could be reversed, and (the oil and gas industry) is hopeful that they will be.”
Other steps that Godby said seem likely in a Trump administration are rollbacks of incentives and subsidies for renewable energy.
“Some have said he may roll back electric car mandates, or potentially rolling back fuel efficiency standards for vehicle that basically required a certain amount of electrification in the fleet.”
And, of course, climate change regulations would likely look very different in a Trump administration, Godby said.
“They were much more skeptical about climate change regulation,” he said. “So efforts by the EPA too control greenhouse gas emissions took a radically different approach.”
But the administration was still required through the legal system to take at least some climate change actions under the Clean Air Act, Godby added.
“The devil will be in the details about what the Trump administration … brings out in a climate change policy,” Godby said. “And it’s too early to tell anything about that.”
Market Forces Could Trump Even Trump
One thing Godby has seen is a lot of optimism in coal country that a Trump administration will help them.
But the picture there is more complex than presidential policies.
“I would suspect that coal interests in (Wyoming’s Powder River Basin) and across the state are probably optimistic that leasing restrictions there may be reversed,” he said. “But I would append to that thought that one does have to recognize that there have been no new coal lease agreements in the Powder River Basin since, I think, 2012. So long before, and during the first Trump administration, there were no new lease agreements.”
The reason for that, Godby said, is due in large part to market forces, not presidential policies.
“In the coal industry, it’s been difficult just due to cost conditions and alternative technologies,” Godby said. “Market conditions have been very challenging for coal regardless of regulations.”
And anything that Trump does to help natural gas supply could further pressure the coal industry, Godby added.
“Natural gas is a substitute for coal,” he said. “And often is a cheaper choice in the electricity generation market than coal. So, ironically, any opening of additional gas and oil reserves could actually harm the coal industry if it reduces natural gas prices and increases natural gas production.”
Trump wouldn’t be the first president to find market forces pushes against his aims.
For example, Biden, despite all the roadblocks he placed in the way of oil and gas, struggled to actually reduce its production. Instead, American oil production hit a new high under his administration, hitting more than 13 million barrels per day.
That was in large part due to market trends, which can often Trump even the best intentions, particularly when it comes to commodities that have to sink or swim in a global marketplace.
Renée Jean can be reached at renee@cowboystatedaily.com.
