President-elect Joseph R. Biden pledged during the campaign to eliminate oil-and-gas permitting on federal lands in the name of combating climate change, but if he does, the impact would be “devastating,” Wyoming Gov. Mark Gordon warned Tuesday.
A University of Wyoming study found that such a ban would result in $670 billion in lost GDP among eight Western states by 2040 and wipe out more than 72,000 jobs annually over the next four years, with no guarantee of reduced global emissions.
The study, conducted for the Wyoming Energy Authority, examined the economic hit of a ban on drilling as well as a ban on leasing. Mr. Biden has said he will prohibit “new oil and gas permitting on public lands and waters,” although he has not said how.
Whether he bans leasing or drilling on public lands — the federal government owns nearly half of the land in the 11 continental Western states — Mr. Gordon said that “the economic predictions are devastating, to be blunt, to Wyoming.”
“These funds fund our schools, fund the important work we do for wildlife, mitigation corridors, the work we’ve done to do a better job on drilling, really advance all of our production efforts and technologies,” the Republican governor said during a virtual press conference.
The report comes with Mr. Biden under pressure from the environmental left to make good on his promise to prioritize emissions reductions after four years of the Trump administration’s fossil fuel-friendly policies, which saw the nation achieve net energy independence for the first time since 1957.
The U.S. also continued to lead the world in lowering greenhouse gases — the Environmental Protection Agency reported last month that U.S. emissions from large facilities fell by nearly 5% from 2018-19 — but Mr. Biden has vowed to achieve a much more ambitious goal of net-zero emissions by 2050.
Glen Murrell, executive director of the Wyoming Energy Authority, warned that slashing oil-and-gas production on federal lands would not necessarily result in lower levels of atmospheric carbon dioxide.
“Policy has both intent and consequence, and the intention of this prospective policy is at least in part to reduce emissions by some significant level, and obviously the economic impact is the consequence,” said Mr. Murrell.
The problem is lower U.S. production is likely to be offset by higher production in other oil-producing countries such as Mexico, Canada and Saudi Arabia.
“It’s hard for me to understand how the intent will be delivered on because oil and gas, particularly oil, is possibly the most globalized commodity the planet has ever seen,” Mr. Murrell said. “By reducing production from federal lands, you don’t reduce consumption, and consequently, you don’t reduce emissions.”
He said that “what we’re left with is a rather inefficient policy which has very, very high economic impacts, certainly in some locations like Wyoming, but a very low return with respect to its intent.”
The study, “The Fiscal and Economic Impacts of Federal Onshore Leasing and Drilling Bans,” conducted by Timothy Considine, professor of energy economics, also warned that OPEC would be the beneficiary of such a policy.
“The United States is now the largest oil and gas producer in the world, deterring OPEC from cutting production to increase prices,” said the 66-page report. “Halting oil and gas development on federal lands reduces an important source of incremental supply to world markets, thus increasing OPEC’s market power and ultimately transferring income from consumers to foreign oil producers.”
The Washington Times has reached out to the Biden transition team for comment.
Kathleen Sgamma, president of the Western Energy Alliance, said she hoped the study would convince Mr. Biden “not to inflict economic pain on Westerners,” and warned that if he does enact a ban, her organization “will be in court within hours.”
The eight states examined were Wyoming, New Mexico, Colorado, Utah, Montana, North Dakota, California and Alaska, which account for about 97% of oil-and-gas development on federal lands.
Mr. Biden walked an energy-and-environment tightrope during the campaign, irking environmentalists by insisting he would not ban hydraulic fracturing, which has fueled an energy boom in the must-win state of Pennsylvania.
Instead, he said he would stop federal permitting on federal lands, which puts the impact almost entirely on Western states, most of which vote Republican.
“He needed to win Pennsylvania, so he couldn’t ban fracking nationwide, like his party’s left flank wants, so he did the next best thing on the areas he can control more,” Ms. Sgamma said. “So he doesn’t think he’s going to pay a political price from the Western states because most of them are red states, and he’s willing to go after federal lands, but the fact is he would be sacrificing hundreds of thousands of jobs.”
Mr. Biden has said that his energy and climate plan would create 10 million clean-energy jobs by deploying the “largest investment in history in American innovation — including research and innovation to unlock and deploy new zero-carbon technologies for the future.”
At the same time, Mr. Gordon said that renewable-energy jobs are often in construction, which means “short-term jobs,” as opposed to “the longer-term jobs that we see in sectors like oil and gas and also in coal.”
“I think it is absolutely imperative that as we discuss transition, we also think about the side effects of any particular policy,” Mr. Gordon said. “And that means really trying to find that finding that equilibrium that not only does a good job for the climate, but provides good equality jobs that last for a long time and stabilize communities.”
The study estimated job losses would reach 351,555 annually by years 2036 through 2040. By 2040, Gross Domestic Product would drop by $670.5 billion, with oil-and-gas investment falling by $389 billion and state tax revenue shrinking by $159 billion.