Biden drilling decision could have huge impact on jobs, revenues
Banning drilling on federal lands in Colorado — something President-elect Joe Biden during his campaign vowed to do if elected — would result in an annual average loss of $73 million in tax revenues between 2021-25, a new study says.
The move would result in average annual job losses of 5,172 and average personal income losses of $415 million in Colorado over that same period, according to the study, conducted by Timothy Considine, a professor of energy economics at the University of Wyoming.
His analysis estimates that over the next 20 years, a drilling ban on federal lands would reduce economic growth by $671 billion in eight states that account for nearly all federal-land oil and gas production. A federal leasing ban — something Biden also has proposed — would reduce economic growth by $640 billion over that time, the study says.
Considine carried out the study under a consulting agreement with the Wyoming Energy Authority. It was conducted at the direction of the Wyoming legislature, and looked at impacts of possible federal leasing and drilling bans on Wyoming, Colorado, Utah, Montana, North Dakota, Alaska, California and New Mexico.
Biden has vowed to impose a leasing ban on federal lands and waters as part of a clean-energy plan. He also has said he would ban new oil and gas permits, including hydraulic fracturing, on federal lands. Considine argues in his study that nations such as Saudi Arabia and Russia could easily replace production lost to a ban on oil and gas development on federal lands, “and probably with greater environmental impact than American oil producers.”
“…There are many cost-effective technologies and strategies to reduce greenhouse gas emissions. Restricting development of oil and gas on federal lands is not one of them,” he said in his report.
Kathleen Sgamma, president of the Western Energy Alliance, said in a news release, “A Biden ban would be devastating to the economies of western states by eliminating thousands of jobs just as Americans are struggling to recover from the pandemic.”
She said her group would “be in court within hours” to challenge such a ban if it is pursued.
In the same release, Chelsie Miera, executive director of the West Slope Colorado Oil and Gas Association, called a federal ban “the exact wrong move to create unaffordable heat and unreliable electricity to those who have been hit hardest by the COVID 19 pandemic” and its economic effects.
Also this week, WildEarth Guardians said in a news release that more than 500 groups sent Biden text for a proposed executive order to ban new fossil fuel leasing and permitting on federal lands and waters.
“For our health and prosperity, President-elect Biden needs to make transitioning from fossil fuels a number one priority,” Jeremy Nichols, with Wild- Earth Guardians said in the release. “That starts by taking bold action to get our federal government out of the business of selling coal, oil, and gas, and instead put public lands and waters to work for the climate. It’s time for President-elect Biden to make good on his promise to keep it in the ground.”
Considine’s report indicates that more than a third of natural gas production in Colorado is on federal land. Much of that production is in northwest Colorado. The report says a leasing ban would result in a $461 million reduction in oil and gas investment in the state the first year, growing to $708 million by 2025. A drilling ban would result in $746 million in lost investment in 2025, it says.
It says a federal-lands drilling ban cumulatively could result in $3.5 billion in lost tax revenue in the state over 20 years, with rural local governments and special districts being primarily affected. The average annual overall impact of a drilling ban to the state’s economy over the first five years could top $850 million, the study says.
It says cumulative losses in personal income across all eight states could total $286 billion under a lease moratorium and $300 billion under a drilling ban over 20 years. A lease moratorium could result in job losses of between 32,000 and 72,000 during the first five years, rising to hundreds of thousands if the policies remain in effect in the long term, the report says.
“Employment losses are even greater under a drilling ban,” it says.
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