AUSTIN (Nexstar) — President Joe Biden signed an executive order Wednesday that will temporarily ban new leases on federal land and offshores for oil and gas companies.
It’s one of many orders signed by Biden aiming to prioritize climate change in his first week in office. This order specifically is being met with mixed reaction from Texas oil and gas producers.
That’s in part due to the fact that Texas has less than 2% of federally-owned land.
“So it really doesn’t have an impact on the Texas side of the Permian Basin at all,” Permian Basin Petroleum Association’s Kyle McGraw said Wednesday.
In fact, he said it could end up bringing a bit more business to the Lone Star State, since other states have more federal land.
“If they couldn’t drill on those, well, then they’re going to shift over to their Texas-based acres to drill,” McGraw said.
While producers in the Permian Basin aren’t as concerned, it’s a different story for producers along the Gulf Coast, Texas Oil and Gas Association President Todd Staples explained.
“If these plans to stop production on federal lands continues and goes into effect, if that were to occur today, we would lose 120,000 jobs by the year 2022. And we would lose 65 million annually,” Staples said.
But, environmentalists doubt there would be that much of an interest from new producers offshore.
“Those are expensive and risky places to drill. We don’t think that that kind of investment makes a whole lot of sense right now, and particularly, not from an administration that’s trying to act on climate change,” Adrian Shelley with Public Citizen’s office in Texas said.
Energy expert Michael Webber agreed, adding he expects the impact of this order on the energy sector as a whole to be minimal.
“There are not bans on new offshore wind. And so there are other ways we can leverage our offshore industry anyway,” Webber said.
Still, Staples said it’s a move in the wrong direction for the oil and gas industry as a whole.
“It’s a long-term detriment, because we want a system that is predictable, that’s fair and reliable. Whenever you attack an industry, even one element of it, it undermines the remainder of it as well,” Staples said, adding that he thinks the benefit the Permian Basin might see will be short-term.
Biden’s moratorium will last 60 days, and Staples said the real issues could begin if that pause becomes permanent.