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Pipeline Shutdown Won’t Crank Prices in Wyoming

in Energy/News
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By Jennifer Kocher, Cowboy State Daily

Wyoming drivers will likely not feel the pinch at the pump that has hit many drivers throughout the eastern and southern United States following a weekend ransomware attack on the country’s largest gasoline pipeline.  

The Houston-based Colonial Pipeline, which supplies more than 45% of the fuel used on the East Coast, transports fuel from Texas to New York. When the company closed 5,500 miles of the pipeline following the attack as a precautionary measure, it affected 17 states, including the nation’s capital.

The shutdown led to a spike of up to 6 cents per gallon, bringing the national average price of gas to just under $3 per gallon this week, according to the AAA. The price is just 3 cents per gallon shy of the record fuel prices set in November 2014.

However, in Wyoming, most prices climbed by only 3 cents per gallon in the last week to average almost $2.98 per gallon.

Mark Larson, of the Colorado Wyoming Petroleum Marketers Association, said Wyoming is in a good position to weather the impacts of the pipeline shutdown because it is home to four refineries and is a hub for a number of pipelines.

The larger concern for Larson is the cyberattack itself, which he said is the first such attack he’s seen in his 40 years in the industry.

“This is new normal type stuff that we haven’t seen before,” he said. “Infrastructure and cyberattacks have been on the forefront of national security for some time now,  but I was surprised that a pipeline could be impacted.”

Larson and Aldo Vazquez, a spokesman for AAA Mountain West, agreed that the upcoming Memorial Day holiday will have a larger impact on Wyoming’s gas prices.

With 90% of travelers on the weekend expected to drive to their destinations, the increased demand for gasoline will probably force prices up by about 2 cents per gallon, Vazquez said.

“Before the pipeline, AAA predicted that gas prices would increase regionally as summer travel gets underway,” he said.

As of Tuesday, gas prices throughout Wyoming averaged $2.98 per gallon with the cheapest prices at Maverik and Conoco in Newcastle at $2.44 and $2.49 per gallon, respectively, and $2.54 per gallon at a Maverik in Cheyenne.

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UW Professor Receives Prestigious Fulbright Scholarship

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By Ellen Fike, Cowboy State Daily

A University of Wyoming professor has been awarded a prestigious scholarship to conduct research related to changes caused by shifts away from fossil fuels.

School of Energy Resources Professor Tara Righetti has won a Fulbright Scholarship to conduct research at the Center for Legal Research and Perspectives in Law at the University of Lille College of Law in France.

During her 11-month sabbatical from UW, she will collaborate with researchers in Lille to formulate a comparative study of energy, industrial and workforce transition policies in Wyoming and France, with a focus on climate policies, sustainability and the circular economy.

“I am deeply honored to travel to Lille as a Fulbright Scholar,” Righetti said. “The award provides an incredible opportunity to develop new collaborations and research regarding energy transitions.”

Righetti’s current areas of expertise concentrate on legal issues related to split estates, subsurface trespass, energy transition and carbon capture and sequestration. Her proposed project will build upon her current competencies while allowing her to develop new partnerships and expand her research into international and comparative law.

“Professor Righetti is a leader in understanding complex energy policies and determining how Wyoming could be impacted, and identifying potential approaches to overcome negative outcomes,” SER Executive Director Holly Krutka said. “Professor Righetti’s choice to study parallel and diverging energy policies in Wyoming and the Hauts-de-France region is timely and important. I was thrilled to learn of her much-deserved recognition as a Fulbright Scholar.”

Righetti is among 800 U.S. citizens who will conduct research and/or teach abroad for the 2021-22 academic year through the Fulbright U.S. Scholar Program.

Fulbright scholars engage in cutting-edge research and expand their professional networks, often continuing research collaborations started abroad and laying the groundwork for forging future partnerships between institutions.

Righetti joined the UW faculty in 2014 and has worked to provide important scholarship for her discipline: informative resources for the Wyoming natural resources community; and educational opportunities for students.

Regularly sought out for her expertise and aid on major energy and carbon storage projects nationwide, she is a renowned expert on U.S. energy law.

In 2018, she was appointed as a trustee-at-large with the Rocky Mountain Mineral Law Foundation and, most recently, she was awarded tenure in the UW College of Law.

“Professor Righetti’s receipt of the Fulbright is an outstanding accomplishment and a unique recognition,” UW College of Law Dean Klint Alexander said. “In this special 75th anniversary year of the Fulbright program, she joins the ranks of many distinguished recipients of this honor who have gone on to become heads of state, judges, ambassadors, foreign ministers and business leaders.”

Alexander added that Righetti’s research in France next year will be an opportunity to work collaboratively with international partners in several fields and to “facilitate engagement between the United States and Europe on energy policy development in the 21st century.”

The Fulbright Program is the flagship international educational exchange program sponsored by the U.S. government and is designed to forge lasting connections between U.S. residents and the people of other countries, counter misunderstandings and help people and nations work together toward common goals.

Fulbright scholars address critical global challenges in all disciplines while building relationships, knowledge and leadership in support of the long-term interests of the U.S. 

Since its establishment in 1946, the Fulbright Program has enabled more than 390,000 dedicated and accomplished students, scholars, artists, teachers and professionals of all backgrounds to study, teach and conduct research, exchange ideas and to find solutions of shared international concerns.

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Wyoming Asks Court to Force BLM to Resume Oil and Gas Lease Sales

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By Jim Angell, Cowboy State Daily

Wyoming officials are asking a federal court to force the U.S. Bureau of Land Management to resume oil and gas lease sales on federal land pending the outcome of the state’s lawsuit against the Interior Department.

Gov. Mark Gordon announced Tuesday that the state has asked the U.S. District Court in Wyoming to issue an injunction allowing oil and gas lease sales to continue while the federal government conducts its review of the federal leasing program.

“This litigation does not challenge the (Interior) secretary’s authority to review the federal oil and gas leasing program,” the motion said. “Instead, Wyoming challenges the secretary’s suspension of federal oil and gas leasing before complying with applicable federal law.”

In his first days in office, Biden issued executive orders that have halted oil and gas leasing on federal land until the leasing program can be reviewed. 

Wyoming in March filed a lawsuit against the Interior Department, alleging the halt to leasing violates a number of federal laws, including the National Environmental Policy Act, and saying it amounts to a “de-facto moratorium” on federal leasing.

The request for an injunction filed Monday said the Interior Department halted lease sales without seeking input from the public or considering all the impacts of such a move.

“Put simply, the (Interior) secretary took a ‘shoot first, ask questions later’ approach to managing federal land by failing to involve the public, provide an explanation, or consider any environmental impacts before suspending the federal oil and gas leasing program,” the motion said.

State officials have said if a halt to leasing remains in place for several years, it could cost the state hundreds of millions of dollars, a fact cited in the motion.

“The secretary’s suspension of federal oil and gas lease sales deprived Wyoming of millions of dollars in revenue afforded to Wyoming by federal law,” it said. “Wyoming’s injury will compound each subsequent quarter the secretary’s suspension of federal leasing remains in place. Wyoming suffers from the lost opportunity cost of not having federal leasing revenues in Fiscal Year 2021 to support its schools, highways and local governments.”

Resuming the leasing program is the only way to solve the problems created by the suspension, the motion concluded.

“A preliminary injunction is necessary to remedy the harms caused by the secretary’s suspension of all federal oil and gas leasing,” the 49-page motion said. “The secretary’s purported unsubstantiated greenhouse gas benefits do not outweigh the public interest in ensuring compliance with federal laws which, in turn, generates substantial revenue for the federal government.”

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Gordon: Energy Moratorium Is Bad For Country, Climate, Wyoming

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By Ellen Fike, Cowboy State Daily

Wyoming’s public services will all suffer with the halt in energy development on public lands, Gov. Mark Gordon told a congressional committee Tuesday.

Gordon spoke in front of the Senate Energy and Natural Resources Committee, telling the senators why President Joe Biden’s energy moratorium is unnecessary and how the policy is harming Wyoming’s economy.

“This leasing ‘review’ is a crafty way of establishing a moratorium on federal lease sales, making continued progress ever more tenuous, more difficult, and more likely that good-paying, family supporting jobs will migrate somewhere else,” Gordon told the committee. “That is bad for this country, for the climate, and especially for Wyoming.”

In addition to Gordon, testimony came from Vicki Hollub of Occidental Petroleum, Pueblo of Acoma Gov. Brian Vallo and U.S. Bureau of Land Management Deputy Director Nada Culver.

Gordon noted that Wyoming ranks first in natural gas production on public lands and second in oil, and that this production is vital to the funding of schools, health care, public safety and other essential services.

Energy-related tax revenues from public lands in Wyoming totaled $457 million last fiscal year. Approximately $5.7 million of that was due to lease sales, but Wyoming has seen no lease sale revenues this year because of the moratorium.

“Doing something as extraordinarily draconian as we are with the policies of this administration doesn’t give us time to evolve,” Gordon said.  

In his first seven days in office, Biden issued two executive orders that have halted oil and gas leasing on federal lands pending a review of the federal government’s leasing programs. Gordon and a number of western governors wrote letters protesting the moratorium and members of Wyoming’s congressional delegation have also expressed their opposition.

U.S. Sen. John Barrasso, who invited Gordon to the meeting to testify, also spoke about how the moratorium will hurt the state.

“Wyoming’s energy has powered this nation for decades, but today, Wyoming and the Rocky Mountain West is under attack,” the senator said. “There are benefits that solar and wind will never be able to replicate.”

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Arch Kicks Of 2021 With $6 Million Loss, Reducing PRB Operations

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 By Ryan Lewallen, County 17

Arch Resources ended its first quarter of 2021 with a $6 million loss while taking strides to complete its accelerated reclamation plan in the Powder River Basin (PRB), according to a quarterly earnings report released Thursday.

While still a loss, the end of 1Q2021 showcased a $19.3 million improvement over the $25.3 million loss reported for the first quarter of the previous year, an accomplishment the coal giant attributes to the expanding availability of the COVID-19 vaccine and a declining rate of infection across its operations, according to the April 22 report.

“The Arch team maintained its world-class execution in (1Q2021), once again delivering operational excellence in the key areas of cost control, safety, and environmental stewardship,” Paul A. Lang, Arch’s chief executive officer, said in a statement.

This past quarter, Arch’s thermal coal sales came in at 12.3 million tons, about 1.8 million tons less than the amount sold in the final quarter of 2020 (4Q2020), a pattern that the company expects to hold well into the next quarter of 2021 due to still-inflated power plant stockpile levels and low power demand, according to the report.

Earnings from production at Black Thunder, Coal Creek, and the West Elk mines will be used to carry out the coal giant’s long-term accelerated reclamation plan in the PRB, per the report.

“We are methodically harvesting value and cash from our legacy thermal assets while working down our long-term closure obligations in a systemic and measured way,” Lang said in a statement.

The company had previously announced with the release of their 4Q2020 earnings report that it would strive to fulfill existing contracts at Coal Creek Mine throughout 2021 with the intent of closing and reclaiming the mine’s active pit south Gillette in 2022.

This past quarter, Arch spent around $8 million towards retiring Coal Creek Mine and anticipates having 80 percent of the final reclamation and retirement project finished by mid-2022.

Similar plans had been hinted at for Black Thunder Mine in the 4Q2020 earning report, though specific retirement and final reclamation dates have not been released as of April 22.

But in the past few months, nearly $2 million worth of work aimed at shutting down and reclaiming Black Thunder was completed, according to the report.

Systemically shutting down PRB operations aligns with Arch’s strategic shift toward metallurgical products in anticipation of growing steel demands as the global economy intensifies its focus on decarbonization, per the report.

Steel is an important component for urbanization, infrastructure replacement, and the construction of decarbonization tools, according to the report. Those tools could include mass transit systems, wind turbines, and electric vehicles.

“The team’s objective is clear as we drive forward in completing the company’s strategic transition towards steel and metallurgical coal markets while remaining committed to our environmental stewardship across our operations,” Lang said in a statement.

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BLM Cancels Oil & Gas Lease Sales Again; Gordon Says Will Cost Wyoming Millions

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By Jim Angell, Cowboy State Daily

Wyoming stands to lose millions of dollars more from this year’s second cancellation of oil and gas lease sales on federal lands, Gov. Mark Gordon said Wednesday.

Gordon criticized the U.S. Bureau of Land Management’s announcement Wednesday that it would cancel its second oil and gas lease sale of the year, noting the state usually receives millions of dollars from the sales.

“Over the past eight years, Wyoming has received, on average, $35 million annually from oil and gas lease sales on federal lands,” he said in a statement. “This year, we have received zero, because first and second quarter lease sales have been indefinitely postponed.

The administration of President Joe Biden has ordered a halt to new oil and gas leases pending a review of the government’s lease program.

The BLM canceled its first quarter lease sale, scheduled for March, and on Wednesday announced it would hold no new lease sales at least through June.

The halt does not affect existing leases.

“The announcement … is disappointing, disheartening and not surprising,” Gordon said. “Federal reviews of anything take months, and sometimes years.”

Gordon said the Department of Interior could have conducted the review while allowing quarterly oil and gas lease sales to continue.

“Instead, they chose to tighten the financial choke of revenue that would normally flow to the state from lease sales, all the while refraining from consulting with the very states and communities that are directly impacted by these decision,” he said.

Gordon said he will testify on the issue next week before the U.S. Senate’s Energy and Natural Resources Committee.

The state has already filed a lawsuit challenging the administration’s halt to lease sales, saying it violates the National Environmental Policy Act, the Administrative Procedure Act and other regulations.

It asks the U.S. District Court in Wyoming to order the BLM to resume lease sales.

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Gordon Calls Energy Moratorium “Unnecessary, Discriminatory to the People of Wyoming”

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By Ellen Fike, Cowboy State Daily

Gov. Mark Gordon is calling President Joe Biden’s moratorium on energy development on federal lands unnecessary and discriminatory to the people of Wyoming.

Gordon recently sent a letter to Secretary of the Interior Deb Haaland, continuing his criticism of Biden’s moratorium, which was enacted when the president took office in January.

Among other concerns, Gordon cited the lack of consultation with western governors before the lease sale moratorium was put in effect.

In addition, Gordon stated “western states such as Wyoming are disproportionately affected by the freeze because of the amount of federal land and leases within our borders.” 

He pointed out that “the eight Western states with federal oil and gas leasing programs will have investment losses of $2.3 billion, production value losses of $882 million and tax revenue losses of $345 million in the first year of the moratorium.”

The letter was issued in response to the Department of Interior’s call for informal public comment on the Biden administration’s federal fossil fuel program review.

Gordon stressed the idea that oil and gas companies have more leases than they can develop is not accurate in Wyoming. 

Wyoming’s unique mix of federal, state and private surface and mineral rights requires oil and gas companies to make long-range plans for sensible and efficient development of oil and gas and prevent waste. It often takes many years for a company to successfully put together a drilling area for development.

Gordon also noted that federal lands are not over-leased. Approximately 66% of the federal mineral acreage considered leasable (not including national parks, national monuments, Wind River Reservation or geographically unsuitable areas) is currently unleased.

In the letter, Gordon added Wyoming is a leader in the adopting policies to allow oil and gas development to occur at the same time as wildlife protection.  He cited examples such as the state’s extensive experience setting policies to conserve the greater sage-grouse and wildlife migration corridors. He also highlighted Wyoming’s program of plugging abandoned or orphan wells, with more than 1,000 were successfully plugged in 2020.

Finally, Gordon asked Haaland to allow U.S. Bureau of Land Management state directors to “dedicate time for deliberate and thoughtful consultation with Wyoming and other states that have effective regulation of development, solid environmental protections, and whose economies, livelihoods and way of life are dependent upon the federal energy programs that this administration proposes to reform.”

“Policy changes to our bedrock program should not be based on a predetermined outcome without meaningful input from all stakeholders,” he wroter.

Last month, the state filed a lawsuit challenging the moratorium.

The lawsuit filed in U.S. District Court of Wyoming alleges that the administration’s action violates the National Environmental Policy Act, the Administrative Procedure Act, the Mineral Leasing Act and the Federal Land Policy Management Act.

The lawsuit asks the court to set aside Haaland’s action and require the U.S. Bureau of Land Management to resume quarterly oil and gas lease sales, which have been suspended since the order was signed.

In his first seven days in office, Biden issued two executive orders that have halted oil and gas leasing on federal lands pending a review of the federal government’s leasing programs. Gordon and a number of western governors wrote letters protesting the moratorium and members of Wyoming’s congressional delegation have also expressed their opposition.

The resolution noted that in addition to owning almost than half of Wyoming’s land, the federal government has direct control over another 42 million acres of mineral rights in the state and some influence on more than 90% of the state’s minerals.

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Federal Ban On Oil And Gas Activity Contributing To Wyoming’s Slow Economic Recovery

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By The Center Square for Cowboy State Daily

Despite a new state report showing the Wyoming economy is bouncing back, sluggish income growth and job losses, particularly in the oil and gas industry, mean the state’s overall progress is expected to be slow.

“The natural gas and oil industry follow the global markets and must utilize the oversupply that was created during the pandemic before we will see prices rise significantly and allow for increased production,” Ryan McConnaughey, communications director at the Petroleum Association of Wyoming (PAW), told The Center Square.

The oil and gas industry itself has been in a slouch and continues to seek recovery.

“The COVID-19 pandemic caused a historic drop in demand for petroleum products as the globe quarantined to slow the virus’s spread,” McConnaughey said. “This caused an oversupply in the global markets. We are starting to see the oil price move upward, and we are confident production will return as global economic activity resumes.”

The report was issued last month by the Wyoming Department of Administration and Information (WDAI).

“Wyoming’s recovery is really somewhat similar to the U.S. economy’s recovery,” Wenlin Liu, chief economist for the WDAI economic analysis division, told Wyoming Public Media. “The Wyoming economy continued to rebound in the fourth quarter. However, the slow recovery of Wyoming’s economy was mainly dragged by our oil and gas drilling activities.”

This year’s new federal mandates banning new oil and gas leases on federal lands, many of which are in Wyoming, have added to the state’s economic difficulties.

“The administration’s new policies around oil and natural gas will hinder the ability to produce in Wyoming due to its outsized reliance on federal lands for production,” McConnaughey said. “The natural gas and oil industry contributes more to Wyoming’s GDP than the following two sectors combined [travel/tourism and agriculture]. Therefore, production must continue for the well-being of our state and communities.”

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Petroleum Association Of Wyoming Joins Lawsuit Challenging Biden’s Federal Oil Lease Ban

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By The Center Square for Cowboy State Daily

The Petroleum Association of Wyoming (PAW) has signed on as a joint petitioner in a lawsuit to fight President Joe Biden’s executive order halting new federal land leases for oil and gas drilling.

The lawsuit, initiated by Western Energy Alliance (WEA), targets Executive Order (EO) #14008 and was filed in the U.S. District Court in Wyoming.

After the Bureau of Land Management (BLM) failed to hold its first quarter lease sale, PAW decided to throw its weight behind the challenge.

“We believe the administration’s decisions are going to have real impact on the state of Wyoming,” Ryan McConnaughey, communications director at PAW, told The Center Square. “The administration likes to talk about this idea that the executive order is harmless yet we already saw that this most recent lease sale was canceled, which we expect based on averages over the last six years cost Wyoming schools about $4 million.”

PAW President Pete Obermueller said in a news release that $4 million is enough money to fund an entire year of education for 220 Wyoming children, calling the “harmless” narrative “false.”

WEA President Kathleen Sgamma said she was happy to be joined by PAW.

“We filed in Wyoming because it has the largest amount of federal acreage under lease, and now we have the home team assembled,” Sgamma said in the release. “Because of the interlocking land ownership in Wyoming, it’s nearly impossible to develop oil and natural gas in the state without touching some federal lands or minerals.”

Filed against the Department of Interior, the lawsuit holds that the BLM is in violation of the Mineral Leasing Act, which states that lease sales must be held “for each State where eligible lands are available at least quarterly,” as stated in the news release.

“There were 426 parcels up for nomination for the March lease sale this year, and they did not hold that lease, and so that is the main grounds,” McConnaughey said.

The state of Wyoming garners about $79 million from lease sales annually, according to the release. Estimates by PAW put losses from the lack of a sale this quarter at $9.5 million.

“The decree might make sense to someone sitting in Washington, D.C., but makes no sense in Wyoming and across the West,” Sgamma said.

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Wyoming Launches Lawsuit Challenging Biden’s Energy Lockdown

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By Ellen Fike, Cowboy State Daily

The state of Wyoming filed a lawsuit Wednesday challenging the moratorium on oil and gas leasing on federal land issued by President Joe Biden earlier this year.

The suit asserts that Secretary of Interior Deb Haaland’s implementation of the leasing moratorium is invalid under federal law.

“Following a careful review of not only the President’s Executive Order, but its practical effect, it is necessary for Wyoming to protect its citizens and challenge the Secretary’s action,” Gov. Mark Gordon said. “Not only is this federal action overreaching, it was implemented without public input as required under federal law.”

The lawsuit filed in U.S. District Court of Wyoming alleges that the administration’s action violates the National Environmental Policy Act, the Administrative Procedure Act, the Mineral Leasing Act and the Federal Land Policy Management Act.

The lawsuit asks the court to set aside Haaland’s action and require the U.S. Bureau of Land Management to resume quarterly oil and gas lease sales, which have been suspended since the order was signed.

Gordon emphasized that Biden’s de-facto ban on oil and gas leasing will not meet the climate goals of the administration, as production will simply shift to other countries with less stringent emissions standards.

“The world will continue to need and use oil and gas for the foreseeable future,” Gordon said. “The question is whether it will be produced under the environmental safeguards in place on federal lands in Wyoming, or overseas without equally stringent regulations.”

A recent economic study indicated that a moratorium on oil and gas development on federal land will cost the state thousands of jobs and millions of dollars of state revenue.

Gordon said he anticipated other states will consider intervening after Wyoming’s action is filed.

Wyoming recently also joined a multi-state lawsuit in an attempt to block Biden’s ban of the Keystone XL Pipeline.

Once the Keystone pipeline was completed, the project was expected to help free up pipeline space in Wyoming, increasing oil export capacity. The project is projected to create 42,100 jobs with $2 billion in associated earnings throughout the United States.

Biden on Jan. 20 issued an executive order revoking the permits for the pipeline.

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