The sky is not falling on the oil and gas industry
Pausing new oil leasing is the first step towards overhauling our broken, rigged, and outdated public lands drilling system
According to Politico, the Biden administration will implement a one-year pause on issuing new oil and gas leases while it evaluates the impact of America’s public lands drilling program on our climate, communities, and taxpayers. This is a commonsense first step that begins the long-overdue process of reform.
The oil industry has launched a Chicken Little-inspired campaign to convince the public that a pause would mean the end of oil drilling and cost thousands of jobs. A quick look at publicly-available data and recent studies shows just how disingenuous this argument is.
A leasing pause will not devastate the oil and gas industry
The oil and gas industry has amassed a huge backlog of leases and drilling permits that they aren’t even using.
- According to the latest Bureau of Land Management data, oil and gas companies are sitting on 13.4 million acres of oil and gas leases that are not being used for production — an astonishing 51 percent of all active oil and gas leases. These statistics don’t even account for the last-minute blitz of leases sold by the Trump administration.
- Similarly, the oil and gas industry has stockpiled thousands of approved, but unused, drilling permits. According to the Government Accountability Office, oil and gas companies stockpiled 9,950 approved, but unused, drilling permits from 2014–2019, roughly half of all permits approved over that time. According to an Associated Press analysis, oil and gas companies raced to secure thousands more drilling permits in the months leading up to and following the November 2020 election.
Economics, not a lack of public lands, is driving the industry’s demise
Oil and gas companies have spent a decade racking up immense debt, leaving them vulnerable to disruptions from the coronavirus pandemic and international disputes.
- Since 2010, U.S. oil and gas companies accrued more than $340 billion in losses, operating on increasing debt in order to boost production.
- In the oil and gas industry, profitability and drilling decisions are determined by the price of oil. Currently, WTI crude is trading around $52/barrel, much lower than crude prices at the beginning of the shale boom.
America’s public lands drilling system is broken, rigged, and desperately in need of reform
The law governing how we lease public lands for drilling is more than 100 years old, and favors oil and gas companies over communities and taxpayers.
- Under our current system, oil and gas companies nominate public lands they want to drill, purchase oil and gas leases at obscenely low rates, easily obtain drilling permits, and pay taxpayers low and outdated royalty rates, depriving governments of much-needed revenue.
- This system impacts communities by allowing government agencies to easily dismiss public concerns and oil and gas companies to drill and pollute in sensitive areas.
- The system also impacts our climate. According to the U.S. Geological Survey, fossil fuels extracted from public lands account for 24% of all U.S. greenhouse gas emissions.
The Biden administration should make sure our public lands help communities, taxpayers, and the climate
- By increasing appropriately-sited renewable energy generation, the administration can move our public lands towards a future as net-zero sources of climate emissions, all while creating jobs and ensuring state and local governments have new revenue streams.
- Similarly, managing more public lands for conservation and recreation can harness the booming outdoor industry, supporting jobs both locally and throughout supply chains.
For more information, visit westernpriorities.org. Sign up for Look West to get daily public lands and energy news sent to your inbox, or subscribe to our podcast, The Landscape.
