Tag archive

oil

Gordon, Petroleum Association Say Biden Should Be Embarrassed Over Oil, Gas Report

in Energy/News
15442

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Ellen Fike, Cowboy State Daily

Neither Gov. Mark Gordon nor the Petroleum Association of Wyoming are impressed with a report calling for an overhaul of the federal government’s oil and gas leasing program.

The report released Friday by the administration of President Joe Biden overhaul of the system used to lease parcels of federal land for oil and gas drilling to limit areas available for development and increase the cost for companies to drill on public lands and waters, according to NPR.

Gordon said on Tuesday the report lacked any real merit.

“The Biden administration’s long-awaited review…lacks merit and is a frontal assault on Western lands that leaves nothing to be thankful for,” Gordon said. “The report encourages increasing the cost of producing oil and gas in Wyoming by hiking the royalty rate, taking more areas off the table for federal leasing  and increasing the costs of bonding. None of these options are wise or necessary for Wyoming.”

The report by the Interior Department stopped short of recommending an end to oil and gas leasing on public lands, but officials told NPR it would lead to a more responsible leasing process that provides a better return to U.S. taxpayers.

On Tuesday, Gordon argued that Wyoming was not over-leased, pointing out that only 23% of the total mineral acreage held by the federal government in the state is leased.

“With our state’s  oil and gas industry just showing signs of recovery, this is the worst time to needlessly increase expenses such as jacking up royalty rates or instituting higher bond requirements,” the governor said. “Wyoming already has an industry-funded, successful plugging and abandonment program. While we are asking our enemies to produce more oil, under less stringent regulations and drain our own national security reserves, further weakening our economy, we need to remember that the only result of the President’s actions will be driving more activity to foreign countries and to states with fewer federal lands and minerals.”

Gordon also said that the Biden administration wants the United States to become more dependent on the nation’s adversaries.

“We can do more to reduce CO2 emissions by innovating new technologies that improve our standard of living than regulating into oblivion,” he said. “Any potential modifications to the oil and gas leasing program identified by this review could have been brought forward without the illegal and devastating moratorium. As I have stated on multiple occasions to the Biden administration, the leasing moratorium does nothing to achieve their climate agenda.”

Officials with the Petroleum of Association of Wyoming shared Gordon’s opinions, saying the Biden administration should be embarrassed by the report.

“As fuel prices continue to rise, the Biden Administration’s solution is to increase the cost of production, build more barriers to Wyoming’s development and choke off exploration of new reserves. No wonder they don’t want anyone to read the report,” the organization said on Friday. “The report repeats overblown claims about the government needing a ‘fair return,’ when in fact the mineral program is second only to the IRS in revenue production for the treasury.”

The timing of the report’s release on the Friday after Thanksgiving was also criticized by PAW.

“Wyomingites should take this report for what it is: at best a politically motivated document repeating old anti-development talking points, and at worst a nonsensical screed,” PAW officials said. “Ask yourself, if the oil and gas program was in such desperate need of reform, why did the Biden Administration try to hide it’s report on the issue by releasing it on a day most people would not be paying attention.”

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Oil And Gas Lawsuit Will Continue Despite BLM Plan To Resume Leases In 2022

in Energy/News
12976

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Jim Angell, Cowboy State Daily

A lawsuit filed in Wyoming to reverse a ban on oil and gas leasing on federal lands will continue despite the U.S. Bureau of Land Management’s announcement it will resume leasing in 2022, according to a spokesman for the state’s oil and gas industry.

Ryan McConnaughey of the Petroleum Association of Wyoming told Cowboy State Daily the BLM continues to move slowly in issuing leases on federal land for energy development.

“In reality, the only reason the administration is doing this is because they have a court order and they were in danger of being held in contempt of court,” McConnaughey said. “We have no doubts they will continue to stall leasing on federal lands, so we believe our lawsuit should move forward.”

The PAW and Western Energy Alliance have filed a lawsuit in U.S. District Court in Cheyenne to overturn the ban imposed on oil and gas leases on federal land by President Joe Biden in his first few days in office. The lawsuit argues the BLM did not follow the rules of the federal Mineral Leasing Act in stopping the leases.

A similar lawsuit filed in Louisiana resulted in a judge’s ruling that the federal government did not follow the rules of the act. The judge also issued an order for mineral leasing to resume nationally.

The BLM recently announced it will allow the lease sales for parcels offered for lease in the first and second quarter of 2021 to proceed in early 2022.

However, McConnaughey said the announcement does not address the lease sales that should have been held in the third and fourth quarters of 2021.

“At this point, at this rate, we’ll still be two quarters behind what they should be doing in accordance with the Mineral Leasing Act,” he said.

The BLM’s announcement came shortly after the PAW and WEA filed a request with the federal court asking the judge in the case to expedite proceedings so the merits of their lawsuit can be argued.

“By proceeding directly to the merits of our case, we believe we can compel the federal government to uphold its obligations under the Mineral Leasing Act,” PAW President Pete Obermueller said in a statement.

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

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

in Energy/News/Mark Gordon
10379

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

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.”

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

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

in Energy/News/Mark Gordon
10035

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

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.

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

UW Analysis: Wyoming Could Lose $12.9B From Energy Moratorium

in Energy/News
9112

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Ellen Fike, Cowboy State Daily

Wyoming could lose $12.9 billion in tax revenue if the energy moratorium implemented by President Joe Biden isn’t lifted in a timely manner, according to a University of Wyoming study.

The UW’s Enhanced Oil Recovery Institute issued a report this week that detailed the impacts of the drilling and leasing moratorium on federal lands, something many Wyoming officials have raised concerns about.

Biden issued an executive order in late January halting new oil and gas leasing on federal land to allow the Department of Interior time to conduct a comprehensive review of the federal leasing program and existing fossil fuel leases.

Even though gas fields were excluded from the report, it concluded that Wyoming would lose billions of dollars due to the moratorium. According to the report, 67% of Wyoming’s recoverable oil reserves are at risk due to Biden’s executive order.

It also stated 47% of surface and 68% of minerals in Wyoming are found on or under federal lands, as are 60% of the minerals within oil basins in the state.

The report added that its lost tax revenue projection was just an estimate and did not include state mineral royalties, associated gas production, taxes on ancillary industries that support oil production or lost jobs.

Late last month, Gov. Mark Gordon and a number of his fellow Republican governors sent a letter to Biden, asking him to withdraw the order.

The governors were unified in their support for an “all of the above energy approach” that relies on both fossil and renewable energy sources and said that “as governors, we believe that solutions come from innovation, not regulation,” stressing the importance of state primacy for emission standards.

Last month, Gordon informed federal officials that he is prepared to take all necessary actions to protect Wyoming from unilateral actions targeting and crippling its energy industries.

Wyoming Superintendent of Public Instruction Jillian Balow also joined four other western state school superintendents in asking Biden to reconsider the energy lockdown.

Their letter specifically noted that in Wyoming, the oil and natural gas industry contributed $740 million in K-12 education funding and $28 million to the state’s higher education system in 2019.

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Balow, Other State Superintendents Ask Biden to Reconsider Energy Lockdown

in Energy/News/Education
8889

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Ellen Fike, Cowboy State Daily

Wyoming Superintendent of Public Instruction Jillian Balow has joined four other western state school superintendents in asking President Joe Biden to reconsider his recent energy lockdown.

Balow was joined by her colleagues from North Dakota, Montana, Alaska and Utah in sending a letter to the president telling him the moratorium on oil and gas leasing on federal lands would decimate school funding in their states.

“It is unusual that state education leaders would be in a position to warrant this letter,” send the letter, which was sent Wednesday. “We write to oppose the actions taken to ban oil and gas leases on federal land and to curtail production and transmission of the commodities.”

Biden issued an executive order in late January halting new oil and gas leasing on federal land to allow the Department of Interior to conduct a comprehensive review of the federal leasing program and existing fossil fuel leases.

But the school chiefs noted that in their states, schools depend on income from energy production.

“As state education chiefs we have appreciated generous access to your education transition team and we had multiple opportunities to discuss schools safely reopening, student well-being, and academic priorities,” the letter said. “It is imperative that we bring to light the arbitrary and inequitable move to shut down oil and gas production on federal lands in our states that depend on revenues from various taxes, royalties, disbursements, and lease payments to fund our schools, community infrastructure and public services.”

The letter specifically noted that in Wyoming, the oil and natural gas industry contributed $740 million in K-12 education funding and $28 million to the state’s higher education system in 2019.

Almost all, 92%, of Wyoming’s natural gas comes from federal lands, as does 51% of the oil produced in the state.

“The ban translates into the loss of hundreds of millions of dollars for education and 13,300 direct jobs in a state of 500,000,” the letter said.

For Montana, $30 million in revenue and more than 3,000 jobs are at risk because of the moratorium, the letter said.

In North Dakota, the lease moratorium would result in 13,000 lost jobs over four years, along with $600 million in lost tax revenue and a $750 million loss in personal income. North Dakota’s oil and gas industry accounts for 24,000 direct jobs in the state.

In Utah, $72 million in revenue and 11,000 jobs are at stake. 

In Alaska, over $24 million in state revenue is tied to federal leases for oil and natural gas, along with 3,500 jobs.

“As state education chiefs, we place equity and quality at the forefront of policy making,” the letter said. “We care deeply about clean air and clean water for future generations. And, we advocate fiercely for adequate funding for all students in all schools. Reform of the industry is necessary and can be accomplished, but not by abruptly restricting industries that define our culture and the generate revenue on which so many rely.” 

A University of Wyoming study commissioned by the Legislature concluded that a moratorium on oil and gas leasing on federal land could reduce Wyoming’s production by $872 million per year, costing the state more than $300 million a year in tax revenue.

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Gordon Asks State Agencies To Evaluate Oil, Gas Lease Ban Impact

in Energy/News/Mark Gordon
8606

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Jim Angell, Cowboy State Daily

Gov. Mark Gordon is directing the state’s agencies to determine how the state will be affected by a ban on oil and gas leasing on federal land and help him plot legal strategies to battle the ban.

Gordon on Friday issued an executive order in direct response to the moratorium on oil and gas leasing on federal land put in place last week by President Joe Biden in his own executive order.

“These orders issued by the new administration are a direct attack on Wyoming and our way of life, Gordon said in a statement. “I am directing members of my cabinet to examine the economic, financial and workforce impacts of the President’s actions. I will continue to fight these misguided and destructive policies by all means necessary. The way to move America forward is not through crushing her Western states.”

On his first day in office, Biden halted oil and gas leases on federal land for 60 days. Last week, he issued a second executive order on the subject extending the moratorium for an unspecified amount of time to allow the Department of Interior to thoroughly review the federal leasing program and existing leases on federal lands.

Gordon’s executive order directs state agencies to determine how their budgets will be affected by the ban and how jobs in the oil and gas industry in Wyoming will be affected.

It also directs the agencies to identify any tools that could be used to challenge Biden’s executive order, along with opportunities for litigation “to protect and preserve the strength, vitality and independence of Wyoming’s energy industry.”

The executive order does not contain a timeline as to when the governor should receive the information.

“We will be communicating with the impacted state agencies over the next several days regarding this,” said Michael Pearlman, a spokesman for the governor’s office.

A University of Wyoming study commissioned by the Legislature has concluded that a moratorium on oil and gas leasing on federal land could reduce Wyoming’s production by $872 million per year, costing the state more than $300 million a year in tax revenue.

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Wyoming Delegation Proposes Bills To Halt Biden Lease Moratorium

in Energy/News/Cynthia Lummis
8570

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Jim Angell, Cowboy State Daily

Members of Wyoming’s congressional delegation have introduced legislation aimed at stopping the Biden administration’s efforts to halt mineral leasing on federal land.

U.S. Sen. Cynthia Lummis and U.S. Rep. Liz Cheney, have both introduced legislation that would require congressional approval for any executive branch effort to stop energy or mineral leasing and permitting on federal land.

Lummis’ bill, co-sponsored by U.S. Sen. John Barrasso and 24 other members of the Senate, is called the “Protecting Our Wealth of Energy Resources Act” and would require congressional approval for mineral and energy leases on federal land.

Cheney actually introduced two bills, one dealing with oil and gas leases and the second with coal leases. Both would require a joint resolution from Congress to approve any moratorium on leasing on federal land.

Cheney’s bill on oil and gas leases is co-sponsored by 21 other representatives, while her bill on coal leases is co-sponsored by 14 others.

The bills were introduced in response to President Joe Biden’s executive order on Wednesday halting all mineral leases on federal land until the Department of Interior can conduct a thorough review of federal leasing programs.

“The Biden Ban would be nothing short of catastrophic for western states that are already reeling from the decline in energy usage brought on by the pandemic and continued volatility in energy markets,” Lummis said in a statement. “Through the POWER Act, Congress would reiterate that federal lands should serve not the whims of a radical progressive minority, but the needs of all Americans.” 

“The executive actions from the Biden Administration banning new leasing and permitting on federal land endanger our economy and threaten our national security,” Cheney said. “The legislation I am introducing today would safeguard against these damaging orders, and prevent the job loss, higher energy costs, and loss of revenue that promises to come with them.”

Gov. Mark Gordon expressed support for all three measures, citing the economic impacts of a long-term moratorium on mineral leases on federal lands.

“Oil and gas industries across the West are hit hard by the Biden administration’s executive action — eight western states … could lose $8 billion in (gross domestic product) and over $2 billion in tax revenue per year,” he said. “This is a bipartisan issue.“

Since federal laws provide for the leasing of fossil fuels and minerals, it is appropriate that Congress would have to agree to such a departure from the intent of federal law,” he continued. “It is disappointing that such a law is necessary, but it is.”

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Wyoming Officials Slam Biden’s Oil and Gas Moratorium

in Energy/News
8543

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Ellen Fike, Cowboy State Daily

Officials from across Wyoming didn’t have positive reactions to President Joe Biden’s halt on oil and gas leasing on federal lands Wednesday.

A number of state officials and organizations spoke out against Biden’s decision Wednesday, agreeing it would economically impact Wyoming.

“Today’s executive orders signed by President Biden will endanger our economy in Wyoming and threaten our national security. The negative ramifications that will be felt across the country because of this ban will be real and painful. Energy costs will rise. Domestic energy production will fall. Jobs will be lost,” U.S. Rep. Liz Cheney said in a statement.

Biden issued an executive order Wednesday that will suspend new oil and gas leasing on federal land to allow the administration to conduct a comprehensive review of the federal leasing program and existing fossil fuel leases.

“Let me be clear, the #BidenBan would decimate our economy and energy security, costing nearly $700 billion in GDP by 2030 and destroying nearly a million jobs by 2022,” U.S. Sen. Cynthia Lummis said on Twitter.

U.S. Sen. John Barrasso slammed the decision on the Senate floor Wednesday.

“Despite all of the talk about unity, one of the first things that President Biden has done in office is to directly attack energy-producing states like Wyoming,” he said. “In Wyoming, energy production does a lot more than just keep the lights on. It puts food on the table, and it does it for thousands of families. In Wyoming, we produce coal and oil and natural gas. Uranium, as well, for nuclear power.”

The Petroleum Association of Wyoming predicted the moratorium is the first step to stop the production of fossil fuels on federal lands.

“Today’s announcement is another step in the administration’s plan to eventually shut down all production of natural gas and oil on federal lands,” the Petroleum Association of Wyoming said. “This misguided policy does nothing to reduce the demand or to improve environmental outcomes, but rather increases reliance on foreign sources of energy not beholden to America’s environmental, labor or safety standards while increasing energy costs for consumers.”

Biden, in his first day in the Oval Office, issued an executive order halting new oil and gas leases on federal land for 60 days. Wednesday’s order expands on the original.

“I was taken aback by swift orders executed by the Biden Administration last week after months of rhetoric around bringing unity to our nation,” Wyoming Superintendent of Public Instruction Jillian Balow said. “A federal ban on oil and gas leases will defund schools. Wyoming depends on some $150 million a year in oil and gas federal mineral royalties to fund our K-12 schools.”

Gov. Mark Gordon also noted his displeasure at the order on Tuesday, before it was even official.

“It is a reinvigoration of top-down, Obama-era policies that only served to divide and alienate the very working-class American communities with whom the Biden administration has pledged to unite,” he said. “It is clear President Biden has caved in to a loud segment of the Democratic Party that is pushing to require all policies and decisions to meet a litmus test of climate change, regardless of consequence.”

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Wyoming Oil, Gas Industry In Position To Thrive With Better Markets, Report Says

in Energy/News
8409

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Jim Angell, Cowboy State Daily

Once market conditions align to pull the oil and natural gas industry out of its slump, Wyoming will be in position to take a national role in the industry, according to the Wyoming State Geological Survey.

“When supply, demand and price factors align, Wyoming’s oil and gas industry is well positioned to rebound,” said the survey’s report on the industry. “Overall, Wyoming is in a position to remain a major player on the national oil and gas stage for years to come.”

The report, written by Erin Campbell, the WSGS director and state geologist, said Wyoming was on track early last year to produce oil in quantities not seen since 1991.

“Within months, however, a perfect storm of dynamic national and international market conditions and a global pandemic drastically changed the trajectory of Wyoming’s production, especially of oil,” it said.

The report said surpluses of both oil and gas have contributed to market declines, as did declining demands for fossil fuels caused in part by fuel economy gains, increased energy efficiency and above-average winter temperatures.

“When the COVID-19 pandemic lockdowns abruptly slowed most of the economy, the combination of an oversupplied market and severely diminished demand worsened the supply-demand imbalance and briefly forced April oil prices in to the negative,” the report said.

The global oil and gas industry is now in what the WSGS described as a “holding pattern,” with oil prices recovering slightly.

Looking to the future, the WSGS said a number of factors must improve before the industry will see significant gains.

“The timing of Wyoming’s oil and gas industry recovery will depend on demand for oil and gas returning to levels that will draw down and balance supplies, future OPEC decisions, and prices returning to a value at which production from Wyoming reservoirs is profitable,” the report said.

However, it added that once conditions do improve, Wyoming’s oil and gas industry is in a good position to take advantage of the situation.

“Unconventional reservoirs in the Powder River and Denver basins contain substantial oil and associated gas reserves,” it said. “In the Greater Green River Basin, horizontal drilling has greatly increased the production potential of Wyoming’s large gas fields. Recent investment in pipeline infrastructure ensures the continued distribution of the state’s resources.”

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Gordon Launching Oil, Gas Economic Recovery Program This Week

in News/Mark Gordon/Economy
7366

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Ellen Fike, Cowboy State Daily

Gov. Mark Gordon is launching a program this week that is designed to help with Wyoming’s economic recovery and to boost employment in the oil and gas industry.

The Energy Rebound Program will utilize up to $15 million in CARES Act funding to provide business relief targeted towards drilled, but uncompleted oil and gas wells, wells that were unable to be recompleted and plugging and abandonment projects which could not be finished due to the impacts of the coronavirus pandemic.

“When global demand for oil plummeted due to COVID, work stopped almost immediately in the oil and gas industry in Wyoming,” Gordon said. “This program is tailored to provide opportunities for employees who lost jobs when drilling ceased.”

The program will reimburse operators for work done on completions, recompletions, workovers or plugging and abandonments before Dec. 30, up to $500,000 per project.

Operators who were unable to perform or finish projects in these categories for wells they operate due to the effects of the virus, and who can spend funds before Dec. 30, are encouraged to apply.

The Wyoming Business Council will start accepting applications at 10 a.m. on Wednesday. Applications will be accepted through 10 a.m. on Nov. 23rd.

Operators are encouraged to start preparing information for the application, including basic well data, type of project (completion, recompletion/workover or P&A), estimated start and end dates of projects, estimated production, costs of projects and other information.

Priority will be given to projects that provide the greatest immediate economic and employment benefit to Wyoming.

Other factors include, but are not limited to: estimated time of start and completion of the project; completeness of the application; estimated amount of increased production of oil and gas; and ability to commence P&A projects in a timely manner.

“We recognize this is a short window for applications, however, these funds are for projects that were planned, but could not be completed due to the effects of COVID-19. Companies who were ready to roll last March should have the information in hand. We will maximize the impact these dollars have on restoring economic and employment opportunities in Wyoming” said Randall Luthi, Chief Energy Advisor to Governor Gordon.

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Oil Groups: Biden’s Drilling Proposal Would Hurt Wyoming

in Energy/News
6290

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

By Jim Angell, Cowboy State Daily

A proposal by presidential candidate Joe Biden to block oil and gas drilling on federal lands would have a significant impact on the economies of Wyoming and other oil-producing states, according to a study prepared by oil industry organizations.

The analysis released by the Petroleum Association of Wyoming and American Petroleum Institute said such a ban would reduce Wyoming’s oil and natural gas production by more than 30%, costing the state more than 33,000 jobs and $641 million in state revenue.

“Given that nearly 50% of all lands in Wyoming are owned by the federal government, a ban on federal leasing and development would decimate the natural gas and oil industry and Wyoming’s economy along with it,” said Pete Obermeuller, president of the PAW. “This policy would damage both national security and environmental stewardship while devastating Wyoming’s middle class, local communities and public school system.”

Biden’s proposal to end climate change calls for a ban on new oil and gas drilling permits on public lands and waters.

Nationally, the API said such a move would result in a $700 billion decline in the country’s gross domestic product, the loss of 1 million jobs and a threat to more than $9 billion in government income through taxation and fees.

Wyoming would be among the hardest-hit states, coming in fourth behind New Mexico, Texas and Louisiana for job losses and second behind New Mexico for state revenue losses.

The API also concluded a national ban on drilling on federal lands would increase U.S. dependence on foreign oil while cutting the nation’s exports of natural gas.

The move would also slow the switch from coal-fired power generating plants to natural gas plants, the analysis said, thus failing to reduce emissions as hoped.

***For All Things Wyoming, Sign-Up For Our Daily Newsletter***

Legislators on dwindling state revenues: ‘It’s real, it’s bad’

in Energy/News/Taxes
Silhouette of a Pump Jack
2450

By Ike Fredregill, Cowboy State Daily

As coal, oil and natural gas revenues decline, state legislators could have some hard decisions ahead, according to information generated by a strategic planning effort created by Gov. Mark Gordon. 

Dubbed “Power Wyoming,” the planning effort forecasts several scenarios for mineral-based state revenue streams during the next five years, all of which predict a deficit in coming years. 

The information compiled by Power Wyoming was presented to the Wyoming Legislature’s Joint Revenue Committee on Nov. 11. 

“The best projections in this model are very unlikely, and the worst are the most likely,” said Sen. Cale Case, R-Lander, the Senate committee’s chair. “That’s very scary.”

Case worked on Power Wyoming with Rep. Dan Zwonitzer, R-Cheyenne, chairman of the House Revenue Committee. Also on the team were members of the executive branch and economists familiar with the state’s energy sector such as Rob Godby, the University of Wyoming director for Energy Economics and Public Policies Center and a College of Business associate professor. 

Zwonitzer said the planning effort is the starting point to prepare for diminishing mineral revenues. 

“Power Wyoming is just the first step of saying, ‘Here’s what’s going to happen to Wyoming,’” he said. “The group was formed to get the message out there: ’It’s real, and it’s bad.’”

Renny MacKay, Gordon’s policy adviser, said Power Wyoming was not established to be a group of individuals working on potential solutions to the state’s revenue problems, but rather a group of experts working to gather to analyze data.

“This is a cone of different scenarios for both revenue and energy production,” MacKay said.

In its current iteration, Power Wyoming provides insight by compiling information from the state’s Consensus Revenue Estimating Group and the U.S. Energy Information Administration, among others.   

“Energy production is declining … and if there is production decline, the traditional jobs we have in Wyoming would be impacted,” MacKay said. “Information gives us power. The more we look at it, the more we talk about it, we can figure out what our opportunities are as a state.”

Worst case scenarios

While the coal industry’s struggles are being felt across the state, Case said Power Wyoming illuminated potential problems with the natural gas sector as well.

“I did not realize the issues with natural gas were as serious as they are,” he said. “Everybody else is thinking natural gas is doing great, and it’s not.”

The planning effort’s initial simulation results highlight some scenarios where the state’s total mineral revenue drops by 10 percent as early as 2020-2022 before a potential partial recovery by 2024. Some scenarios show a full recovery to expansion in revenues, but Power Wyoming reports they are the least likely cases within the current market conditions and expectations.

Most scenarios predicted a decrease in both Wyoming’s total employment and population, but in the worst case scenarios, the state’s total employment could decrease by about 20,000 jobs by 2024, followed by a similar decrease in population.

“In the next five years, there’s no way to absorb those (lost) jobs,” Zwonitzer said. “That means we’ll either have to have an increase in taxes, or a decrease in government services.”

In the worst case scenarios, he said the state would most likely need to pursue both. 

“We’ve lived a certain way in this state for 100 years with minerals paying the taxes,” Zwonitzer said. “That major revenue source is going away. So what does that look like for our future, and what do we want to do about it?”

Unreliable oil

Some of the scenarios, including those in the best case category, relied heavily on increased oil production balancing decreased coal and natural gas production. But Case warned against putting faith in the oil market.

“I think oil is very susceptible to environmental and carbon risk,” he said. “Changes in policy from Washington, D.C., and from other states could make it impossible to grow petroleum.”

A low-carbon policy consideration was also provided for the Revenue Committee as part of the Power Wyoming data package. Case said the presentation offered a more realistic outlook of oil than the initial simulation results put together by Godby.

In the policy consideration, Shell Global estimates a high usage of liquid hydrocarbon fuels, such as gasoline, in 2020 by about 25 million barrels a day. After the peak, however, the oil company predicts a gradual decrease down to 10 million barrels a day in 2060 and about 2 million barrels in 2100 as part of its strategy to comply with the Paris Climate Accord.

Most scenarios presented by Power Wyoming indicate the mineral sector is going to take a significant hit in the next five years, but even if the best case scenarios come true, Case said the future of energy is moving away from Wyoming’s traditional mineral offerings.

“This will tell you that the bad times are here,” Case said. “This is not just a tool for the Revenue Committee, but it’s also a tool for us. If you’re an employee in the coal industry, it’s probably time for you to get your own house in order.”

MacKay said Gordon is already working on the next steps of the planning effort. 

“We are bringing folks from the private industry now,” he explained. “Power Wyoming will definitely stick around for the foreseeable future.”

Go to Top