Study: Oil and Gas Leasing, Drilling Ban Could Cost Wyoming Millions
Wyoming could lose more than $300 million a year and it and seven other western states could lose hundreds of billions of dollars in revenues over the next decade if the incoming Biden administration ends leasing and drilling on federal lands, according to a study released by the Wyoming Energy Authority on Tuesday.
Wyoming's relationship with the federal government, which controls nearly half the land in the state, is a "shotgun wedding," Gov. Mark Gordon said during a news conference.
That partnership has worked during the past four years of President Donald Trump's administration, but that could change if certain proposals aired during president-elect Joe Biden's come to fruition, Gordon said.
“A federal leasing ban would be a serious threat to our state’s economy,” he said.
“The revenue challenges that we currently face would be further exacerbated by any misguided federal policies that unfairly target states with large swaths of federal land," Gordon added.
University of Wyoming professor of energy economics Dr. Timothy Considine published a study saying the value of lost production from a leasing moratorium during the first five years is on average $872 million, or more than $300 million per year in lost severance taxes, ad-valorem taxes, federal royalties and lease bonus payments. That would rise to $1.7 billion over the next 15 years, Gordon said, citing Considine's study.
If the federal government were to impose a drilling ban, Wyoming initially would lose $345 million per year, increasing to $1.8 billion over 15 years, according to the study.
The 2020 Legislature paid for the study came from a one-time appropriation, but about half of it was not spent, Gordon said.
Considine said during the news conference that the study has not been peer-reviewed, but that he will be writing an article based on the study, and the article will be peer-reviewed.
Besides Wyoming, he calculated investment and production losses from possible restrictive policies on federal lands in New Mexico, Colorado, Utah, Montana, North Dakota, California and Alaska.
The investment losses for these states over 20 years could exceed $300 billion for either the leasing or drilling ban. Tax losses would exceed $110 billion, and the overall loss of economic growth would more than $600 billion, according to the study.
But that's not the end of it, Considine said. "What happens on federal lands doesn't stay on federal lands," Considine said.
The lost revenue and employment would affect adjacent and ancillary businesses and communities, he said.
Dr. Glen Murrell, Wyoming Energy Authority’s Executive Director, added that every policy has an intent and a consequence.
With a leasing and/or drilling ban, the economic consequences would be devastating, Murrell said.
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