In January of this year President Biden issued an executive order directing the Department of the Interior to review its oil and gas leasing program, effectively cutting off new resource development on federal lands. This moratorium, which was created without much foresight, will have broad ranging negative implications for the state of Wyoming.
The oil and gas industry is a significant economic and tax contributor to the state of Wyoming. As of 2019, 19,000 people were directly employed in the petroleum industry with an annual payroll of over $1.1 billion. That same year, the oil and gas industry paid $1.67 billion in taxes, including 40% of the total property taxes levied in the state. Much of that money went to education and local governments.
Without the ability to extract resources from federal lands, much of this economic activity would not have been possible. While 10% of oil and gas production nationwide occurs on federal lands, that number is much higher here in Wyoming where almost half of the state’s surface acreage is considered federal land. In fact, 51% of oil and 92% of natural gas produced in the state is extracted from federal lands. It is not hard to see how such a ban could be especially devastating for the state.
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Numerous studies have drawn the same conclusion. One study from the American Petroleum Institute found that by 2022 Wyoming could lose over 33,000 jobs and $641 million in state revenue could be at risk. Another study conducted by University of Wyoming economist Timothy Considine similarly found that a leasing moratorium could cost the state $304 million in annual revenue.
If this policy stands, President Biden would also hinder his own attempts to protect the environment. Emissions in the power sector could actually increase 5.5% by 2030. This would reverse decades of progress made by power generators who have been able to bring additional capacity online while still reducing their carbon footprint. Much of these gains have been made by transitioning to cleaner burning natural gas, which would become much scarcer in Wyoming and across the country should such a ban go into effect.
Ironically, instituting a leasing ban would also delay the transition to the so-called renewable wind and solar energy sources that President Biden and many other elected Democrats claim to be championing. When the wind doesn’t blow and the sun doesn’t shine, natural gas fired power plants have the ability to stay online, providing a steady, dependable supply of energy regardless of weather conditions.
Also concerning are the implications for American energy security if a leasing ban is enacted. Domestic energy development, driven in part by increased energy exploration and development on federal lands, made the U.S. a net energy exporter in 2019 for the first time since 1952. These energy exports support millions of domestic jobs and billions of dollars in investment as well as bolster American manufacturing competitiveness and trade balances globally. Our adversaries in Russia and the Middle East will be more than happy to replace U.S. gas in global markets, should we unilaterally reduce our ability to produce domestic energy and will likely use it as an opportunity to gain a stronger foothold on the global stage.
Given the significant damage a federal leasing ban could do both in Wyoming and across the United States, President Biden should reconsider his ban. We as Wyomingites and as Americans have benefited greatly from this renaissance in domestic energy production and impulsively instituting such a ban now will only serve to undermine all of the progress made.