Federal Leasing Ban Would Add to Wyoming's Pain

Mark Green
Posted November 17, 2020

If President-elect Joe Biden follows makes good on his campaign promise to ban new natural gas and oil leasing on federal lands and waters, a recent OnLocation analysis sees the U.S. weakened on the world stage – forced to import more foreign oil – with crippling jobs and economic impacts as well.

Losses at the state level would touch Americans where they live. We’ve looked at New Mexico and Louisiana.

In Wyoming, another producing state, the impacts would be especially devastating. The federal government controls nearly half of the acreage in Wyoming, and the state’s energy economy has been rocked by pandemic-related forces, losing about 20% of its energy-related jobs through the second quarter, according to this NBC News report. Banning new federal leasing and development would have dire effects, OnLocation’s analysis projected:

• Total state oil production would be down 31% by 2030 compared to what it would have been otherwise.
• Total state natural gas production would be down 36% by 2030

Wyoming’s projected job losses from a leasing ban would top 8% of the state’s total workforce:

This translates to local levels, local pain – in a state that’s already hurting.

The NBC News report focused in part on the city of Douglas, population of about 6,000, in Converse County, which draws most of its revenue from energy-associated sales tax. Receipts are down about a third compared to this time last year.

Oil production fell off as demand slackened due to the national, virus-related economic downturn. People lost jobs. Some left Douglas looking for work elsewhere. Economic impacts cascaded. Kyle Tisdel, an attorney with the Western Environmental Center who studies Wyoming’s energy economy talked to NBC about what per-barrel oil prices mean locally. NBC:

“You’re talking about a break-even point of $50, $60 a barrel, and oil is floating around $40 to $45,” he said. “All signs are showing we aren’t going to be up much higher than that for the foreseeable future.” Without profits, the companies leave. “The communities shoulder the burden and are the first to feel the impacts,” Tisdel said.

Now imagine kicking a state that’s already down – which is what a federal leasing ban basically would do.

Again, we’ve argued against such a policy – as potentially damaging to the economy, U.S. security and America’s global energy leadership. Communities like Douglas, Wyoming, show that behind the national numbers, much harm could result locally.

Writing in the Albuquerque Journal, former Bush administration official Jeff Kupfer urges the president-elect to reconsider his leasing ban promise, pointing out that the accelerating U.S. energy revolution during the Obama-Biden administration produced multiple benefits. Kupfer:

Biden would be wise to follow his predecessor’s playbook. … A better approach would be to recognize the benefits and work to make sure that the production is handled responsibly and safely. If what the United States is doing has been delivering a winning hand, logic suggests that we should keep doing it.