Report finds little impact on Western states from federal oil and gas leasing pause

Current leases could sustain drilling in Colorado for 35 years, researchers estimate

By: - August 5, 2021 3:09 pm

Oil and gas infrastructure is seen on the Roan Plateau in far western Colorado. (Courtesy of EcoFlight)

Even if the federal government’s pause on new oil and gas leases on public lands became permanent, companies have already stockpiled enough leases to keep drilling on federally owned lands in Colorado for the next 35 years, a new analysis finds.

The estimate of “future years of drilling opportunities” was calculated in a study of the effects of the Biden administration’s leasing moratorium by researchers at the Idaho-based nonprofit Conservation Economics Institute. Their research, published Wednesday, was funded by the Natural Resources Defense Council, an environmental group.

President Joe Biden’s Interior Department announced earlier this year that it would pause sales of new oil and gas leases until it completed a review of the program “to ensure that it serves the public interest and to restore balance on America’s public lands and waters.” Oil, gas and coal extracted from public lands accounts for roughly a quarter of U.S. greenhouse gas emissions annually.

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Environmentalist critics have long faulted the federal leasing program for allowing drillers to cheaply amass large numbers of oil and gas leases on public lands. Leasing activity reached new highs during the Trump administration, with record amounts of federal land leased for drilling in many Western states. In Utah and Wyoming, researchers found, drillers’ current leasing stockpile could allow them to continue producing oil and gas for more than 60 years into the future.

“Polluters cried economic duress when the administration set about reforming a broken system, and this shows just how misleading those claims are,” Josh Axelrod, senior advocate for the NRDC’s nature program, said in a statement. “The pause on leasing federal lands is not an economic threat — industry is already sitting on a stockpile of leases that could yield drilling for well over half a century.”

In June, a Trump-appointed federal judge in Louisiana issued a preliminary injunction blocking the Biden administration from instituting a leasing pause, but the Interior Department has not yet resumed lease sales, which are typically held on a quarterly basis.

On a visit to Denver two weeks ago, Interior Secretary Deb Haaland told reporters that the department still plans to complete its review of the leasing program this summer, but the moratorium continues to frustrate industry groups and their allies.

“It’s been six months since the president banned leasing and ordered the review, yet the Interior Department still has no plan and no lease sales have been held, despite a court order,” Kathleen Sgamma, president of Denver-based oil industry group Western Energy Alliance, said in a statement on Haaland’s Colorado visit. “The president’s order has killed jobs and economic opportunity in the West for no reason, as no progress has been made since then.”

Overall, however, the Conservation Economics Institute’s report found little evidence that the moratorium is having a substantial effect on Western economies. Any link between federal leasing and employment is even weaker in Colorado, the report noted, because most oil and gas production in the state takes place on privately owned land.

“The price of oil is strongly correlated with job levels; all other variables were found to have, at most, moderate correlation with industry employment,” the report concluded. “The amount of federally leased acres shows no correlation with oil and gas employment, indicating that a brief pause in federal leasing will have zero effect on employment levels.”

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Chase Woodruff
Chase Woodruff

Reporter Chase Woodruff covers the environment, the economy and other stories for Colorado Newsline.

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