The pretended drilling on federal lands ban, by the upcoming president-elect Joe Biden would hit hardly eight Western states of the nation, with up to $8 billion in tax revenue and almost $34,1 billion in investment, for the next five years.
News come after a study conducted by the University of Wyoming economist Timothy Considine, released this Tuesday. The study is released as a means to push back Biden’s campaign promise to ban drilling and stop new leases in public lands, as a strategy for energy transition.
The study explores to possible scenarios, a moratorium for federal leases and a full ban on drilling onshore federal lands. According to state’s news media, Wyoming’s legislature funded the research.
Wyoming state alone could lose $2,74 billion in investment, and nearly 18,228 jobs, if a complete ban is ruled. Wyoming especially would be severely hit by it, because most of its production for oil and natural gas happens onshore on federal lands.
On the other hand, if only a moratorium is ruled for federal leases, Wyoming would still lose $2,74 billion in annual investment. As for the tax revenue, the state could cease to collect $345 million for the first five years, if a full ban is ruled; and $304 million if a moratorium went into effect.
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Drilling ban or moratorium, both scenarios would be devastating
During the virtual press conference in which the study was presented, state governor Mark Gordon said: “The economic predictions are devastating, to be blunt, to Wyoming.”
“The investment losses in the other states, particularly Colorado, Utah, North Dakota, and Alaska are smaller but range several hundred million per year during the first five years. The differences in investment losses across states largely depends upon the extent of federal ownership in each state. Roughly 60 percent of oil and gas is developed on federal lands in New Mexico. In contrast, federal lands in Wyoming account for nearly all-natural gas and 50 percent of oil,” the study remarks.
All those losses are going to get bigger in the measure the industry recovers and oil prices peak, the study says. As for New Mexico, another severely hit state by this possible ban, would lose $2,625 billion if a moratorium takes place; and $3,141 billion under a drilling ban, for the next five years.
“In summary, the fiscal and economic losses from these policies ban are significant. Total lost investment from 2021 to 2040 is $372 billion under a lease moratorium and $389 billion under a drilling ban. Over the next 20 years, a drilling band would create a very difficult situation for resource dependent states, such as New Mexico, Wyoming, and Alaska,” the report concludes.