The American Petroleum Institute (API), joined by state energy industry groups, warned of negative consequences if a natural gas and oil development ban was imposed on public lands and waters.
The analysis, prepared for API by OnLocation using software that also is used by the U.S. Energy Information Administration for its Annual Energy Outlook, indicated severe impacts if a drilling ban were to be imposed on public lands.
“A ban on federal leasing and offshore development would have devastating consequences for America’s largest energy corridor, with local communities along the Gulf Coast projected to lose thousands of jobs and millions in state revenue,” API CEO Mike Sommers said. “This would be a backwards approach to U.S. energy policy, not only hurting the Gulf Coast region but diminishing America’s role as a global energy leader and undermining environmental progress.”
The analysis would appear to be a strategic strike against Democratic presidential nominee Joseph R. Biden Jr., who is leading in several national and statewide polls ahead of the Nov. 3 election. In Biden’s energy platform, part of the Build Back Better plan, he does not address onshore oil and natural gas production nor the future of oil and gas pipelines. However, Biden previously has pledged to ban new leases on federal onshore and offshore tracts, among other things.
The Louisiana Mid-Continent Oil and Gas Association (LMOGA), New Mexico Oil and Gas Association (NMOGA), Texas Oil and Gas Association (TXOGA) and the Petroleum Association of Wyoming (PAW) were among those that shared the analysis.
The analysis found that a drilling ban would impact the Gulf Coast region the most, with job losses above 200,000 by 2022 and millions lost in revenue. Wyoming, which accounts for 38% of federal onshore natural gas production and 16% of oil production, also is projected to be hit, standing to lose more than 33,000 jobs and putting $640 million in state federal revenue sharing at risk.
TXOGA President Todd Staples and LMOGA Vice President Lori LeBlanc claimed the ban would threaten thousands of well-paying jobs and erase revenue that pays for essential services and schools.
“At a time when our state needs revenue the most, in the wake of Hurricane Laura, banning leasing in federal waters is backwards policy,” LeBlanc said.
PAW President Pete Obermueller said the ban would “damage both national security and environmental stewardship while devastating Wyoming’s middle class, local communities and public school system.”
The Gulf Coast states stand to lose more than $223 million in revenue, the analysis found, with $95 million lost in Louisiana, $65 million in Texas, $32 million in Mississippi and $31 million in Alabama.
Texas could lose nearly 120,000 jobs, the analysis found, with Louisiana dropping 48,000 more. In addition, Alabama stands to lose almost 21,000 jobs, while Mississippi could lose nearly 14,000.
In addition, “America’s energy security would be at risk,” the analysis indicated. “Offshore production for natural gas would decrease by 68% and for oil by 44%. U.S. oil imports from foreign sources would increase by 2 million b/d.
“Through 2030, the U.S. would spend $500 billion more on energy from foreign suppliers,” according to the analysis. In addition, the U.S. gross domestic product could decline by a cumulative $700 billion through 2030.
The analysis also said “environmental progress would be stalled,” with coal use climbing in 2030 by 15%. In addition, carbon dioxide emissions could climb by an average 58 million metric tons, a 5.5% increase in the power sector by 2030.
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