Moratorium on Oil and Gas Leases Sees Impact Across Wyoming

Since president Joe Biden issued an executive order stopping oil and gas leases on federal land, there are some that worry about the economic impact it has had in Wyoming, while others are pleased by the decision.

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While the executive order does not stop oil and gas companies from using the current leases have, it does prevent companies from getting new leases on federal land, which in Wyoming is where mostly companies go.

According to data from the Wyoming Oil and Gas Conservation Commission, of the 188 approved oil and gas wells since January, 80% of them have been on federal land.

However according to a report by the Government Accountability Office, from 2014 to the end of 2019, there were 9,950 approved but unused permits to drill on federal land.

Dave Jenkins, president of the Conservatives for Responsible Stewardship, said he approves of the moratorium because it allows Congress time to balance out the federal leasing system.

"They're buying it on the cheap when we should be getting higher prices...today's economy is different, and we get a lot more value out of recreation and tourism, which brings people to the states to spend money and drive economic activity."

For Wyoming in particular, which makes a large amount of money from the oil and gas industry, Jenkins said it could benefit the state to try diversifying its revenue.

"States like Wyoming, if you're too heavily reliant on oil and gas as your economic driver, you're gonna get in trouble pretty soon, because the economics of this is changing," Jenkins said. "Demand for oil and gas is gonna be declining as the transportation sector electrifies. It would make a lot sense for Wyoming to diversify its revenue streams, and think about the long term, rather than just simply putting all their eggs in the oil and gas basket."

While Jenkins hopes Wyoming might change course, Ryan McConnaughey, Communications Director for the Petroleum Association of Wyoming, sees the order by Biden as an attempt to shut down the oil and gas industry.

"I think it's really just a promise by the Biden administration to follow through on his goal of eliminating oil and gas on federal land, and will have devastating impacts on the state of Wyoming and its workforce and revenues."

Jenkins said the moratorium isn't much of an issue because oil and gas companies have a large amount of leases on hand, while McConnaughey said that is incorrect due to many of those being held by larger companies.

"There are some companies that have leases that they can continue to weather this but some do not, a lot of our smaller and midsized operators don't have the capital to get leases for long term planning," McConnaughey said. "A lot of these leases once acquired take years to develop, therefore if we see this moratorium continue, there could be a gap of drilling activity in the state of Wyoming."

McConnaughey said there are other issues that have arisen because the executive order, from a few lease bonusses not being distributed to companies needing to go through the Bureau of Land Management office in D.C. rather than the one in the county they are operating in.

The Petroleum Association of Wyoming is also a party to a lawsuit filed by governor Mark Gordon and several other states to stop the executive order.