- In another blow to economic development and energy security, President Biden has proposed a management plan for Southwest Wyoming that places 1.6 million government acres off limits for energy development.
- The proposal would cost almost 3,000 good jobs in a state with a population of less than 600,000.
- The Wyoming governor and legislature are fighting back, and intend to fight Biden’s land grab.
- The proposal is another move by the Biden Administration to choke off energy supplies belonging to the American public.
President Biden has proposed to block oil and gas drilling on 1.6 million acres in Wyoming, which has many in the state surprised, perplexed and annoyed over Biden’s “total government control.” In addition to blocking energy development on the 1.6 million acres, the plan would also restrict mining and some grazing. In August, the Bureau of Land Management (BLM) released a 1,350-page proposal for managing 3.6 million of acres of federal land and 3.7 million acres of Federal mineral estate in Southwest Wyoming that was years in the making. The BLM’s proposal for southern Wyoming, the Rock Springs Resource Management Plan, dates from 1997. The agency is required to periodically update the plan and began to do so in 2011. The process dragged on for almost 12 years because of lawsuits and disputes over issues such as the protection of sage grouse habitat. The blocking of Wyoming land is part of a campaign of the Biden Administration to slow or stop energy development in the United States, including revoking leases, offering the fewest federal acres for leasing since WWII and offering the lowest amount of federal OCS lease sales in history.
Background
In August, BLM issued a draft of its plan, which outlined four management options. It promoted Alternative B that would put the most land under special protections. It also would result in 2,900 fewer jobs in oil and gas drilling and production, an enormous number for a low population state like Wyoming, with less than 600,000 residents.
Biden pledged to end new federal oil and gas leasing as a Presidential candidate and, as president, wants to set aside at least 30 percent of public lands and waters by 2030, both of which are part of his climate program. Biden does not seem to care what these goals do to the U.S. economy or to its energy and national security, even as geopolitical turmoil increases with the war between Israel and Hamas.
The Biden administration’s decision regarding the Rock Springs Resource Management Plan has not been taken lightly. Wyoming Governor Gordon sent a letter to the director of the BLM asking the agency to withdraw the entire plan. A local sheriff declared he would not enforce the plan if it were finalized. A Wyoming legislator is drafting a bill to be considered in the next legislative session that would allow the governor to prohibit state and local officials from cooperating with federal policies that harm the “core interests” of Wyoming. In the meantime, Governor Gordon ordered the University of Wyoming to hold workshops with conservationists, grazing interests, hunters, recreationists, oil and gas industry officials and the general public to discuss various options within the plan. The federal government owns almost 50 percent of the state of Wyoming and shares revenues from energy development on government lands 50-50 with the state.
BLM has extended the public comment period an additional 60 days, until January 17, over the original 90-day comment period, after which the plan would become finalized once comments are incorporated.
Wyoming’s Place in Energy Development
Wyoming is the nation’s top coal-producing state, holding almost 40 percent of all reserves at producing mines in the country. It also was the eighth-largest oil-producing state in 2022, accounting for 2 percent of total U.S. production; and the 10th-largest gas producer, accounting for 3 percent of national production.
The State of Wyoming is now funding $2.5 million to figure out how to tap into 200 million barrels of oil reserves in the Mowry Shale of the Powder River Basin. The $2.5 million is on top of $500,000 in preliminary work done last year, funded by Wyoming Energy Authority. The grants cover exploration, economic feasibility and enhanced production.
Wyoming’s Mowry Shale underlies much of the state and has long been known as the source rock for many of the state’s best oil and gas producing regions, particularly the Powder River Basin in the northeast part of the state. A study by the U.S. Geological Survey in the early 2010s shows untapped reserves of 200 million barrels of oil in the Mowry. Figuring out how to tap those resources would be a huge economic boon for the state as the techniques to produce it are still being determined.
Despite the richness of the formation, there are only a few oil wells producing directly from the Mowry Shale and they are not necessarily the highest producing wells. Mowry Shale is brittle and would lend itself well to the hydraulic fracturing techniques common in tight oil plays, except for bentonite–a highly absorbent type of clay. Bentonite clay mushrooms in the presence of water, expanding quickly and gumming up everything.
A number of oil companies are interested in Mowry. Those companies include Contango, Continental Resources, Devon, EOG Resources, Vermilion Energy and Occidental Petroleum. Continental is one of the newest and largest entrants to the Powder River Basin. It bought assets from Samson Resources in 2021, running a couple of rigs in the basin. Then in 2022, the company doubled down on its investment with a $450 million purchase of 172,000 net acres with 350 operated wells from Chesapeake Energy. Break-evens across the Powder River have dropped tremendously since 2015, when they were averaging in the $70 per barrel range. In 2021, when Continental made its first purchase, break-evens were hovering just under $50, which compared favorably to WTI oil prices at the time. Interested companies are hoping technology will help them conquer the mysteries of how to produce oil from the Mowry.
Conclusion
The federal government owns nearly half, about 48 percent, of Wyoming land and intends to keep the people of Wyoming from temporarily using its mineral wealth as it seeks to limit oil and gas drilling and mining in Southwest Wyoming. The Biden administration wants to restrict 1.6 million acres from energy development, promoting its most aggressive land grab proposal. The decision enables President Biden to increase his climate agenda by limiting oil and gas leasing and keeping federal land off limits to energy development. Wyomingites, however, are not taking the decision lightly after being stunned by its sheer magnitude. As a result, BLM has increased its period for comments until mid-January, 2024.
Wyoming is an energy rich state and could help the United States increase its energy prowess, which would benefit not only Americans but our allies as the geopolitical unrest in the world looms. Biden is fretting away America’s energy security and economic wellbeing for a climate agenda that many see as false.
