President Biden Is Expected To Suspend Oil And Gas Leasing. How Would That Affect Utah?
President Joe Biden’s administration is expected to announce an extended moratorium on oil and gas leasing Wednesday, according to the Associated Press, in order to study its effect on climate change. The ban would apply to all federal public lands and would follow a 60-day pause on new leasing announced last week.
It’s unclear how long the new moratorium will last, but members of the oil and gas industry are already threatening to sue the federal government over it.
Kathleen Sgamma with the Western Energy Alliance said a ban on new leasing will decimate the industry in the West.
“Clearly Biden has made a political calculation,” Sgamma said. “It says we are willing to sacrifice livelihoods in western states to placate the environmental left.”
The Wyoming Energy Authority found a four-year ban on new leasing would cost Western states over $8 billion in tax revenue, and almost 60,000 jobs each year.
Utah’s Congressional delegation, governor and legislative leaders all oppose a ban on leasing and say it will hurt the state’s economy.
“Utahns previously employed in the energy sector have lost their jobs in historic numbers. This decision only exacerbates the problem,” they wrote in a statement last week urging Biden to reconsider the ban.
But the impact on Utah’s economy may not be that severe, according to John Ruple, an environmental law professor at the University of Utah. He said there are still plenty of opportunities to drill wells on public land in Utah.
“If we’re looking at the federal gas leases in Utah, 63% are undeveloped,” Ruple said. “So hitting pause on the issuance of new leases doesn’t undo the leases that are already in effect.”
According to data from the Bureau of Land Management 1,872,666 acres currently leased to energy developers in Utah are not in production.
Meanwhile, most revenue from drilling on public land comes in the form of royalties, not rent or bids on leases. Data from the Department of the Interior shows drilling for oil and gas on public land in Utah last year generated around $93 million in revenue. Around $10 million of that came from bids, while only $1.5 million came from rent. Utah received around $50 million of that revenue.
Conservation groups like the Southern Utah Wilderness Alliance are celebrating the potential moratorium on leasing. Landon Newell is an attorney with SUWA, and he said drilling on public land in Utah has slowed in recent years, despite efforts by the former President Donald Trump’s administration to speed it up. For example, federal data shows only 44 new wells were drilled on public land in Utah in 2019, while there were over 9,000 producing wells in the state at that time.