The Oil And Gas Industry Is Booming, But Operators Worry About Slowdown Amid Shutdown

Jan 9, 2019
Originally published on January 14, 2019 3:49 pm
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ARI SHAPIRO, HOST:

One industry that's been a key supporter of President Trump is no fan of the federal shutdown. Oil and gas drilling is booming, but much of that production is on federal lands, and operators worry about a slowdown. Cooper McKim of Wyoming Public Radio reports.

COOPER MCKIM, BYLINE: Tom Meites heads a small oil and gas company in Casper, and he's planning a new project. He's begun the lengthy process with the Bureau of Land Management, or BLM, to find new parcels for development but has had to put that on hold.

TOM MEITES: With the BLM shut down, the studies on parcels that we've nominated are not happening.

MCKIM: Meites is still hoping to buy that land this year, but now he's not sure when it will happen. BLM is responsible for that environmental review, but most employees are on furlough.

MEITES: The longer the shutdown goes on, the longer we all will be unable to go ahead with the work we want to do.

MCKIM: Meites says there's enough uncertainty trying to predict when the price of oil will be right. He says this shutdown is really hard for a small company like his.

MEITES: We're paying a price for it. And no business likes being told you can't operate.

MCKIM: The oil and gas industry has been doing well in recent years for lots of reasons, including the Trump administration's push to open up vast areas of public land for drilling and to speed up the permitting process. Kathleen Sgamma is with the Western Energy Alliance, a group of oil and gas companies. She says if the shutdown goes on much longer it threatens to slow all that down and not just in Wyoming.

KATHLEEN SGAMMA: Colorado, Utah, New Mexico - same kind of situation.

MCKIM: There's also a lot of confusion. The BLM says it is still processing online applications to drill. That's prompted criticism that the Trump administration is favoring the energy industry. But it's not clear these applications are being acted on. And Sgamma says having only limited staff will slow down processing. In the 2013 government shutdown, a federal report found the BLM did not process 200 applications to start drilling. Sgamma expects that to be even higher this time.

SGAMMA: Companies are waiting for leases. If you don't have your full lease hold, it's hard to do the exploratory work or the full development work that you're planning on. And it just causes your development to slip.

MCKIM: That could mean a hit for a place like Wyoming, where taxes from oil and gas make up a third of state revenue. Nada Culver of The Wilderness Society says she's more concerned about places where drilling is already happening. She worries about a lack of oversight if there's a spill or a leak from a well pad. the BLM's shutdown plan says there are essential employees on the ground for inspection, enforcement and emergency response, but...

NADA CULVER: I would definitely worry that that is something right now with the shutdown that BLM is not paying any more attention to than it ever does and would probably be paying less attention to than it does. You know, workers are not being paid there's. Nobody to supervise. And certainly, there's not a lot of incentive or ability to get out and about right now.

MCKIM: Meanwhile, more oil and gas lease sales are slated for February and March, but some in the industry worry that if the shutdown drags on, they won't happen. For NPR News, I'm Cooper McKim in Laramie, Wyo. Transcript provided by NPR, Copyright NPR.