CHEYENNE, Wyo. – During a virtual press conference yesterday afternoon, Governor Mark Gordon pushed back against a possible federal ban on oil and gas leasing, citing a study, released yesterday, that said that the state could lose more than $300 million per year in tax revenue were the new presidential administration to implement such a plan.
“A federal leasing ban would be a serious threat to our state’s economy,” Governor Gordon said. “The revenue challenges that we currently face would be further exacerbated by any misguided federal policies that unfairly target states with large swaths of federal land.”
In a study of 8 Western states conducted by Dr. Timothy Considine, a Professor of Energy Economics with the University of Wyoming, the value of lost production in Wyoming under a leasing moratorium during the first five years is on average $872 million. That translates to more than $300 million per year in lost tax revenue annually, which includes severance tax, ad-valorem tax , federal royalties and lease bonus payments. Over 15 years that revenue loss would increase to $1.7 billion. In the event of a drilling ban, the loss to Wyoming’s revenues would increase to $345 million per year, increasing to $1.8 billion over 15 years.
Gordon termed such a ban as “devastating” to Wyoming’s economy.
The study estimates the investment and production losses from policies that restrict oil and gas development on federal lands in Wyoming, New Mexico, Colorado, Utah, Montana, North Dakota, California and Alaska. Those policies include either a moratorium on all new federal leases or an outright drilling ban on all onshore federal lands.
The study estimates investment losses over the 8 states and 20 years to be in excess of $300 billion for either the leasing or drilling ban. The tax losses to the states exceed $110 billion. The overall loss of economic growth is over $600 billion.
Funding for the study came from a one-time appropriation by the Wyoming Legislature during the 2020 budget session.
“I was very pleased to support the budget request approved by the Wyoming Legislature that provided funds for this important study,” said Senator Eli Bebout, Co-Chairman of the Joint Appropriations Committee. “With the change of the administration in Washington, DC, this study is particularly timely. A ban on federal leasing of oil and gas is a devastating and costly policy to our local communities, to the State of Wyoming and throughout the West. The findings of this study are a vital tool in showing such a ban on leasing will be bad for Wyoming and the Nation’s energy backbone.”
“Every policy has an impact, and while this study highlights how complicated and in-depth oil & gas development on federal lands can be, it is clear, state-by-state, that this specific type of federal policy has long lasting impacts on State revenues, employment, and economic activities,” said Dr. Glen Murrell, Wyoming Energy Authority’s Executive Director.
A copy of the study may be found on the Wyoming Energy Authority’s website.