Impacts Already Being Felt on Existing Leases

​In the West, oil and natural gas resources are inextricably bound to federal public lands, and therefore, to the men and women of the industry who work there. Likewise, we are inextricably bound to the Department of the Interior, which oversees those public lands.
 
As such, we wish to work constructively with the department, and seek to find common ground whenever possible. But when the first action of the political staff of a new administration is to ban the very activity that we do, even temporarily, we cannot just sit idly by.

We know that the 60-day temporary ban announced by Acting Interior Secretary Scott de la Vega was just an initial step to a more permanent ban. And indeed, just one week later the president himself signed a ban on all new leasing into the indefinite future. Because we know that a “pause” on new leases to “launch a rigorous review of all leasing and permitting” (emphasis added) means a years-long ban on leasing that will last at least Biden’s entire term.

Therefore, not only did we sue shortly after the president signed the order, but we have been talking publicly nonstop about the economic and job ramifications of the action. We have been making the case that the action has consequences for real people in the West, and not just those in industry. Our case has been assigned to Judge Scott Skavdahl in the U.S. District Court for Wyoming.
 
Despite reassurances that the executive order only affects new and not existing leases, not two days later various operators were informed that their recently issued permits were revoked, with press reports putting that number at 70. The action belied numerous statements from the White House that existing leases would not be affected. But it also points to the political spin at work with this “moderate” sounding leasing ban. Why should industry complain when there are already 26 million acres of leases in effect? You have plenty of leases, so what is industry complaining about? We’re the ones being reasonable.
 
Besides the undeniable impact on existing leases of 70 revoked permits, a leasing ban affects existing leases in other not-so-obvious ways to the layperson. The leasing ban will affect existing projects awaiting adjacent leases. It will affect Indian, state, and private horizontal wells that cannot avoid federal minerals that lie along their laterals. New federal leases are necessary in both these common situations to move forward with projects on existing leases. By isolating adjacent lands, a blanket federal leasing ban affects development of tribal and Indian allottees, despite the reassuring statements that the “order does not restrict energy activities on lands that the United States holds in trust for Tribes.”
 
These spillover effects are why the Wyoming Energy Authority study found that 32,700 jobs will be lost in the very first year of a Biden leasing ban, growing to 58,676 annually by the end of his term.
Plus the plain language of the order is clear. The planned wide-ranging analysis of all impacts of federal oil and natural gas exploration and production is intended to question all activities, not just leasing. This not-so-temporary leasing ban will morph into a ban on permitting, drilling, completion, transportation, etc., as the environmental impact statement will find that all must be curtailed in some manner. 
 
Please let keep us informed of how all these actions are affecting your operations. We want to understand various situations that arise so that we may inform the public, Congress, western states, other policymakers, and new Interior Department staff. Of course, all communications will be kept company confidential.
 
Our members operate in good faith on public lands in an environmentally responsible manner. We deliver value not just to the federal government and American people, but sustain rural communities and western states. The leasing ban will erase 59,676 jobs every year on average and a total of $8.3 billion in western state revenue by the end of the president’s first term. We are not sitting idly by.

Author

Kathleen Sgamma, President