Written by Matthew Brown and Cathy Busowitz, The Associated Press
Billings, Mont. – In the final months of the Trump administration, energy companies hoarded enough drilling permits for public western lands to continue pumping oil for years and undermined President-elect Joe Biden’s plans to limit new drilling operations due to climate change, according to public records and industry analysts.
An Associated Press analysis of government data shows that permit storage has been focused on oil-rich federal lands in New Mexico and Wyoming. It accelerated during the fall as Biden strengthened his lead over President Donald Trump and culminated in December, supported by the fastest approvals since Trump took office.
The companies’ goal is to secure drilling rights on oil and gas leases in vast public lands as they pay royalties on whatever resources are extracted. Biden wants to end the new digging of those same lands As part of his reform of how Americans get energy, with the goal of making the nation carbon neutral by 2050.
The companies submitted more than 3,000 digging permit applications in a three-month period that included elections, according to data from the U.S. Bureau of Land Management. Officials approved nearly 1,400 drilling requests during that period amid the pandemic. This is the largest number of approvals during Trump’s four-year term, according to an analysis by the Associated Press.
In Colorado, dozens of permits have been approved or are on hold for exploration in the Pawnee National Grassland, a birding destination where wildflowers and cacti bloom down the hills.
In Wyoming’s Thunder National Park, a meadow area brimming with wildlife that offers hiking, fishing and hunting, oil companies EOG Resources and Devon Energy – which have collected most of the federal permits this year – have permission to drill thirty wells between fields of Sage Brush.
The administration issued more than 4,700 drilling permits in 2020 – compared to approval numbers from the early 2000s when oil surpassed $ 100 a barrel, nearly double the current price.
A call to dig
Facilitating drilling has been a cornerstone of Trump’s efforts to boost U.S. energy production in part by luring companies into land and offshore areas run by the U.S. Department of the Interior and Agriculture.
Under Trump, crude oil production from federal and tribal lands and waters has increased sharply, Exceeded 1 billion barrels in 2019. This was up nearly a third from the last year of the Obama administration.
This year, however, the Coronavirus epidemic and the collapse in oil prices caused many companies to scale back their activities.
With Markets are still in flux and oil producers are cutting budgets. Even so, the majors obtained enough permits to continue pumping during Biden’s next term. The government approved nearly 500 new drilling permits in September, more than double the same month in 2019.
The oil industry fears that Biden will fulfill his electoral pledges and make it impossible or much more difficult to prospect on public land. “You go from having a hero in the White House, leading the entire federal apparatus, to your desire to be successful, to an anti-industrial person,” said Tom Pyle, a former Republican aide on Capitol Hill who now leads the Republican Party. Industry Group American Energy Alliance.
For Biden supporters, the stockpiling threatens parts of the An ambitious climate agenda Before the Democrat could enter the White House. The U.S. Geological Survey said in a 2018 study that oil and gas extracted from public lands and waters generate the equivalent of 550 million tons (500 metric tons) of greenhouse gases annually.
Critics of the Trump administration say officials have enabled the industry to reach its goals, noting that Interior Secretary David Bernhardt and others have bragged about how quickly the permits are processed.
A spokesman for the Bureau of Land Management, Chris Tullefson, said the agency had simplified permits while still tracking environmental laws.
“It is the markets, not BLM, that determine how oil and gas developers decide to obtain and develop leases,” he said.
Processing times for completed applications to the BLM have decreased from roughly 140 days on average in the final year of the Obama administration to 44 days in fiscal 2019, according to testimony by interior officials in Congress. AP found that some companies got their permits in 2020 in just over a month. Other passes took longer but average could not be determined.
Years worth of permits
To undo many permits being granted late, a former senior Home Office official said the Biden administration may have to pay millions of dollars to companies to get them to give up drilling rights. A scenario like this happened in pristine areas of Montana as officials spent decades trying to buy companies with drilling contracts near Glacier National Park.
“This is a classic, the end of the administration, but the Trump administration relies on steroids,” said Jim Lyons, Obama’s deputy assistant secretary of the interior.
Houston-based EOG Resources has collected the most permits this year – 1,024 – including 549 since September, according to AP analysis.
In total, EOG has around 2,500 federal permits approved or in progress. “If (Biden) tries to enforce some regulations on how new federal permits are issued, we definitely already have a stock, and a sizable stock, of existing federal permits that will keep running for several years,” company CEO Lloyd Helms said in November. Investors conference.
Oklahoma-based Devon Energy collected the second-highest number this year. As the presidential campaign approaches this summer, Devon executives assured investors that the company was collecting passes. By October, Vice President David Harris said the company had “adequate federal drilling permits on hand that basically cover all of our desirable activities during the next presidential term.”
Devon spokeswoman Lisa Adams said the more than 500 statements Devon obtained this year resulted from a long-term business strategy, not political calculations. “It’s been something that’s been in the making for years,” said Adams.
Biden nominates New Mexico Deputy Deep Haaland for the position of Home Secretary. Haaland, who has been a co-sponsor of the Green New Deal by liberal Democrats, said she opposes fracturing and digging in public lands.
Leo Mariani, managing director of equity research at KeyBank Capital Markets, said that even if Biden did not immediately block the new permits, he could impose a ban on them to study the situation in more detail.
Mariani said most companies have up to two years to act on federal permits, so a one-year suspension will not have a significant impact on oil supplies and can shift production to private or state-owned land.
But such a shift will have a cost, because royalty rates on private or state-owned land can be twice the federal land price. “Because the breakeven points are so much lower, you won’t see every dollar reallocated elsewhere,” said Parker Fawcett, an analyst at S&P Global Platts Analytics.
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With a ban on new federal drilling permits, US production could fall by about 1 million barrels per day, or about 10%, by 2024, Fawcett estimates. “You’ll have an impact on the show.”
Producers began talking about mitigating their risks about a year ago, after the Democratic presidential and senator. Elizabeth Warren has said it will ban fracking in federal territory, said Artem Abramov, partner and head of shale oil research at Rystad Energy.
Then the companies began collecting federal drilling permits more than $ 10,000 apiece.
More than 60% of permit applications filed over the past year were in New Mexico, with about a quarter of the state’s budget coming from oil and gas revenues. 20% of permit applications were filed in Wyoming, where Gov. Mark Gordon says the state budget received a third of the revenue, which was mainly hit by the oil decline.
“I certainly do not expect the new Mexican state government to support the extremist movements,” Abramov said. They will “push Biden toward a more incremental approach” in the oil and gas industry.
Bussewitz reported from New York. The authors of the Associated Press, Morgan Lee in New Mexico and Mead Grover, Wyoming contributed to this report.
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