Biden Bans Oil And Gas Leasing Near New Mexico Cultural Site
While there have been some…
The amount of capital investment…
The biggest U.S. oil producers operating on federal land have years' worth of drilling permits and don't expect much to change in the short to medium term if President Joe Biden moves to ban new oil and gas leasing on federal land and waters.
The small independent shale drillers, however, especially those that have a large part of their operations coming from federal lands, are concerned, and some think that the U.S. Administration banning new federal lease sales could pose an "existential threat" to their companies, shale executives told Reuters in interviews.
ExxonMobil, EOG Resources, Devon Energy, Occidental Petroleum, ConocoPhillips, and Mewbourne Oil Company, who, combined pump nearly half the oil from U.S. federal lands, have years of stockpiles of permits to drill on federal acreage. Moreover, most of those companies are confident that they could move to state or private lands when they exhaust their federal drilling permits, in some cases in around four years' time, executives told Reuters.
In addition, at the end of last year, many firms with the financial means to do so rushed to secure drilling permits.
In the run-up to the presidential election last year, many shale producers fast-tracked permitting processes on federal acreage in the Delaware-New Mexico and DJ basins, Rystad Energy said in November.
Related: Big Oil Is Buying Into The Solar Boom
While the big U.S. shale drillers don't appear concerned about a potential lack of new federal acreage, the small independents see President Biden's pledge to discontinue new permits on federal lands as an "existential threat."
"The impact on the independent oilman is a heck of a lot greater than it is on Big Oil," Don Law, owner of Denver-based Prima Exploration, which pumps half of its oil from federal land in New Mexico, Wyoming, and North Dakota, told Reuters.
Oil workers in New Mexico, who haven't yet lost their jobs, fear they will lose those jobs, as most of New Mexico's oil and gas production takes place on federal land, unlike in Texas. Fracking on federal land is just 10 percent of the total U.S. fracking industry, but for New Mexico, it's much more—65 percent of the state's oil and gas production takes place on federal land.
It's not clear yet when, and if, President Biden will move to ban new drilling on federal land. In November, the American Petroleum Institute said it would use "every tool at its disposal" to fight a potential ban.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.