American Oil and Gas Reporter - October 2020 - 25

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Future Of Oil And Gas
On Federal Lands Depends
On Election Outcome
Energy production on federal lands and waters accounts for
12% of U.S. natural gas and nearly a quarter of U.S. oil
production. However, those figures could change, pending the
outcome of November's presidential election.
Public-land resources are developed in an environmentally
sound and healthy multiple-use manner that considers other values
and land uses. The environmental review process for developing
oil and gas resources is multifaceted and includes input and coordination with other federal and state agencies, as well as the public.
In fiscal 2018, the Bureau of Land Management generated
nearly $3 billion in federal royalties, rental payments and bonus
bids, which were split between the U.S. Treasury and the states
where development occurred. This annual revenue stream is
second only to that provided to the U.S. Treasury by the Internal
Revenue Service.
Numerous regulatory and legislative developments affect
production on federal lands. At the forefront recently have been
efforts to unwind harmful regulatory initiatives by the previous
administration.
In July, the Trump administration made a number of important
changes to the National Environmental Policy Act. Since its enactment in 1970, NEPA requirements have grown to place a
heavy burden on independent oil and gas producers operating
on federal lands. The Trump administration's changes include
reducing unnecessary paperwork, setting timelines for environmental reviews, and reducing frivolous litigation.
In late March, IPAA received good news regarding BLM's
2015 hydraulic fracturing rule. A Northern California judge
rejected challenges to the Trump administration's repeal of the
Obama-era rule brought by states and environmental groups.
IPAA and the Western Energy Alliance launched the initial
challenge to the 2015 rule, and we were pleased when the
Trump rescission rule was upheld. IPAA pushed back from the
inception of the Obama administration rule, knowing the unnecessary, bureaucratic nightmare it would create for our members.
The progression of BLM's venting and flaring rules has
been a major focus for IPAA. In July, a Northern California
judge issued an adverse ruling to overturn the 2018 Trump administration rewrite. This rule, which repealed and replaced
Obama-era regulations, was challenged by environmental groups
and progressive states.
In response to the California ruling, Judge Scott Skavdahl in
Wyoming lifted the stay order that WEA and IPAA fought to
preserve in our initial challenge to the Obama-era rule. Skavdahl
ordered parties to submit briefs, which IPAA did in early September.
California's vacatur of the 2018 rule was to take effect Oct. 13,
which gave Judge Skavdahl five weeks to issue a decision on the
merits of the Obama rule. IPAA will be working closely with
WEA to ensure the best arguments are made for industry.
IPAA also has been working to change the 2016 royalty valuation
rule issued by Obama's Office of Natural Resources Revenue. The
original compliance deadline was Jan. 1, 2020. However, in
November 2019, ONRR postponed that until July 1, and then again

"The Biden campaign has said a Biden
administration would undo most, if not all,
of President Trump's energy and
environmental initiatives.

into October. Since the deadline postponement, the Trump administration has published an amended rule in the Federal Register.
Looking ahead, the Nov. 3 elections could have a dramatic
effect on oil and natural gas production on federal lands and
waters. Former Vice President Joe Biden has said he would
conduct a full review of Trump's NEPA policy changes on his
first day in office. Biden also would ban all new leases on
federal lands (onshore and offshore) on day one.
An analysis prepared by OnLocation finds a federal leasing
ban could result in U.S. gross domestic product declining $700
billion by 2030, loss of nearly 1 million jobs by 2022, $19 billion
more in residential consumers' energy expenditures by 2030, and
putting more than $9 billion in government revenue at risk.
The Biden campaign has said a Biden administration would
undo most, if not all, of President Trump's energy and environmental
initiatives, including methane regulations, NEPA reform and modifications to the Endangered Species Act. It would halt legal
challenges to all Obama-era regulations, including BLM's venting
and flaring rule. Biden would restart hydraulic fracturing regulations
for federal leases and stop the Department of Justice from fighting
to reinstate Montana leases canceled to protect sage grouse habitat.
It's difficult to say how a second Trump administration
would unfold. President Trump has touted America's energy
renaissance and reaching net exporter status. But in an attempt
to earn favor in battleground states, Trump in September
extended the leasing moratorium in the Eastern Gulf of Mexico
and established new moratoria offshore the Atlantic coasts of
Florida, Georgia and South Carolina.
Nevertheless, if victorious on Nov. 3, Trump presumably
would continue to unwind Obama-era rules. It also is thought
his administration potentially would take a deeper look at substantive changes to the Endangered Species Act.
The make-up of Congress will impact how successful
either candidate is in achieving his goals. So, fellow energy
advocates, vote!
❒

MALLORI MILLER is vice pres-

ident of government relations
for the Independent Petroleum
Association of America, focused
primarily on federal land development. She maintains friendly
communications with legislators
and key Department of Interior
officials and policymakers, advisers, journalists and others.
OCTOBER 2020 25

American Oil and Gas Reporter - October 2020

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