The Western Energy Alliance, a trade group representing 200 companies engaged in oil and natural gas exploration and production in the western United States, filed a lawsuit on Wednesday challenging President Joe Biden’s executive order to halt drilling leases on federal land.
The Alliance said the order conflicts with existing law and would result in a loss of $33.5 billion in lost Gross Domestic Product (GDP) across eight western states over the course of Biden’s first term. It noted that the majority of companies it represents are small businesses with an average of 14 employees.
The order also contradicts Biden’s claim it will fight climate change, citing that the decision also will cost over $8.8 billion annually in conservation funding.
“The complaint challenges Biden’s order as exceeding presidential authority and constituting a violation of the Mineral Leasing Act, National Environmental Policy Act, and the Federal Lands Policy and Management Act,” the press release announcing the lawsuit said.
“The law is clear. Presidents don’t have authority to ban leasing on public lands,” Kathleen Sgamma, president of the Alliance, said in a statement. “All Americans own the oil and natural gas beneath public lands, and Congress has directed them to be responsibly developed on their behalf.” Sagamma went on:
Drying up new leasing puts future development as well as existing projects at risk. President Biden cannot simply ignore laws in effect for over half a century. Biden’s ban is an overreach meant to satisfy the environmental left, but it would seriously harm the livelihoods of tens of thousands of westerners and put at risk millions more as state services become unfunded.
Furthermore, the Biden ban puts at risk national parks and public lands funding less than a year after Congress passed the Great American Outdoors Act and directed $1.3 billion annually in oil and natural gas leasing and production revenue into conservation. The Land and Water Conservation Fund (LWCF) is likewise at risk as it depends on federal offshore oil and natural gas.
By targeting the industry, the president is risking the $8.8 billion in conservation revenue streams that otherwise are available from a stable federal oil and natural gas program. The president just created a gap in conservation funding that he likely hasn’t even considered, just as he hasn’t considered the sacrifice of nearly 58,700 western livelihoods every year this ban continues.
The Alliance filed suit in the U.S. District Court for the District of Wyoming, a state that ranks first in federal natural gas production and third in oil and has more federal acres leased than any other state.
On a conference call on Wednesday hosted by the American Petroleum Institute, Jim Willox, President of Wyoming County Commissioners Association, said that 50 percent of land in that state is owned by the federal government and 75 percent of “sub-surface” energy sources are under federal control.
According to a recent economic study from the Wyoming Energy Authority, Biden’s ban would cut 58,676 jobs annually, wages would drop by $15 billion, and state tax revenue would plummet by $8.3 billion.
Wyoming and New Mexico would be hit the hardest, and on the same API call New Mexico Oil and Gas Association President Ryan Flynn said that 57 percent of all onshore oil production in the U.S. takes place in the state and 31 percent of all onshore natural gas production.
“Nearly one third of our state’s budget comes directly from oil and gas revenue,” Flynn said.
Other highlights of the Wyoming study include:
- Oil and natural gas from public lands accounted for 6.4 percent and 9.2 percent, respectively, of the national’s total production.
- Companies returned $4.2 billion in onshore and $5.6 billion in offshore leasing revenue and royalties in 2019.
- If extended, over the next 20 years the Biden Ban would result in $639.6 billion in lost GDP, $286 billion in lost wages, $151 billion in lost state tax revenue, and job losses climbing to 343,088 annually.
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