Massachusetts Sen. Elizabeth Warren made headlines Monday by announcing her plans to eliminate oil and gas leasing on federal lands if elected president.
“That’s why on my first day as president, I will sign an executive order that says no more drilling — a total moratorium on all new fossil fuel leases, including for drilling offshore and on public lands.”
In a blog post on Medium, the 2020 aspirant – whose vocal opposition to new pipeline infrastructure in her home state helped to exacerbate New England’s energy crisis, including Massachusetts importing liquefied natural gas from Russia in 2018 – displays a remarkable disconnect with constituents in oil and gas producing states. In the same post the Democrat states “it is possible to protect our public lands and still respect communities,” she lays out a policy that would have rapid, devastating impacts on the economies of the areas where oil and gas development is taking place. As Independent Petroleum Association of America’s Dan Naatz detailed in a statement:
“Senator Elizabeth Warren’s proposal to ban all new fossil fuel production on onshore and offshore federal lands would damage our economy and negatively impact job growth in communities across the United States. According to the Department of the Interior, oil and natural gas produced from Federal and Tribal lands account for approximately eight percent of all oil and nine percent of natural gas produced in the United States. The royalties, rental fees and bonus bid revenues, which are evenly split between the Federal Government and the states where the development occurred, play a vital role in the state and local economies of states and tribal communities.
“Increased production and consumption of natural gas has provided the United States with its cleanest air in decades. Sen. Warren’s proposal would lock up vast supplies of abundant, affordable natural gas, which would, coincidentally, hinder the nation’s environmental progress on clean air goals.” (emphasis added)
Eliminating oil and gas development on federal lands would have real consequences for local communities.
There are the practical realities Warren must grapple with as she further refines her political platform. For instance, oil and gas development on federal lands generated a substantial revenue stream in 2018, according to the Bureau of Land Management:
“In FY 2018 the BLM generated nearly $3 billion in Federal royalties, rental payments and bonus bids. This is before accounting for a record $972 million in bonus bids from a lease sale held by the New Mexico State Office’s Roswell and Carlsbad Field Offices on September 5 and 6, 2018. During both FY 2018 and CY 2018, BLM lease sales generated over $1.1 billion in revenue from bonus bids, first-year rental fees, and administrative fees. For comparison, the BLM fluid minerals program spent about $165 million appropriated from Congress in FY 2018.
“All Federal oil and gas royalty, rental fee, and bonus bid revenue is split about half between the U.S. Treasury and the states where development occurred. The amount of annual revenue that Federal mineral development provides to the U.S. Treasury is second only to that provided by the Internal Revenue Service.” (emphasis added)
The importance of this revenue generated through leasing of public lands is particularly palpable in the western mountain states region, where the senator is scheduled to next campaign.
New Mexico is also one of the biggest beneficiaries of oil and gas development on federal lands – even without the aforementioned $972 million lease sale. According to the Albuquerque Journal, in 2018 the state received more than $3 billion from oil and gas. This provided a record surplus of over $1 billion to state coffers, with about $500 million flowing to New Mexico to pay for schools, roads, and public safety:
“In large part, New Mexico’s high revenue generation reflects heavy production on state and federal lands, which accounts for much more activity than in states including Texas, where most operations are on private lands, said Richard Anklam, the Tax Research Institute’s president and executive director.”
In Wyoming, where a large share of oil and gas production occurs on public lands, taxes, revenues and royalties from oil and gas equated to about $1,500 for every person in the state in 2017:
In Montana, another state with considerable public lands oil and gas development, the average annual salary for oil and gas workers is $71,000, or about two-thirds higher than the state average wage:
Oil and gas emissions are falling on federal lands.
Warren uses a 2018 U.S. Geological Survey report on fossil fuel emissions on federal lands as a basis for her proposed drilling ban. But she never mentions the USGS data actually showed:
Leases for oil and gas development only reflect a fraction of total federal acreage.
The senator also described America’s public lands as being “under threat” from the current administration, which she claims is dramatically expanding their availability for fossil fuel leasing for fossil fuel extraction:
“The Trump administration is busy selling off our public lands to the oil, gas and coal industries for pennies on the dollar — expanding fossil fuel extraction that destroys pristine sites across the country while pouring an accelerant on our climate crisis.”
Except that’s not accurate either, as EID showed using BLM data following the release of an alarmingly misleading New York Times story: In each year of (Democratic) President Obama’s first term, more federal acreage was leased for development than during the current administration.
In fact, more than 90 percent of the federal lands in the western mountain states region – where the lion’s share of federal onshore oil and gas development occurs – is not leased for development.
Campaigns and Conclusions
Royalties and revenue generated from the leasing of federal lands have had dramatic, positive impacts in communities across the country.
While Warren’s proposal doesn’t go to the extremes of Sen. Bernie Sanders’ or Rep. Tulsi Gabbard’s calls for a nationwide ban on fracking, the economic impacts are still profound – palpable to the communities the industry supports now.
Such campaign calls are sure to generate headlines that will fire up the far-fringe, anti-energy bloc – and maybe even bring in some campaign donors and votes – but such policies would be absolutely devastating for communities across the country if they were to ever be enacted. Regardless of how many electoral votes these states account for, anyone campaigning to represent the entirety of this country ought to know better than to put the politics of a primary over the prosperity of the people they’re aiming to represent.
This post appeared first on Energy In Depth.