Business/Economy, Energy, Environment, Uncategorized

Griffin: Biden energy ban an economic hammer to Colorado

It’s the start of a new year, a new presidential administration and already a new policy emanating from the Oval Office banning future oil and gas leases on federal land.

But that’s a losing approach for Colorado and America’s long-term energy security that puts Coloradans, energy customers, and our great country in economic peril.

Why? In the early 1970s, Americans suffered from oil embargos and gas shortages due to the Middle East’s geopolitical turmoil.

These shortages forced Americans from all walks of life to wait in lines on designated days for hours on end to fill their cars with gas. Unemployment soared, economic growth slowed, and prices went through the roof.

Policymakers vowed to make America energy independent. Over time, those efforts succeeded, especially in light of advances in such techniques as bi-directional drilling and hydraulic fracturing, which led to a doubling of U.S. oil production between 2011-2020.

Our domestic energy abundance led Congress in 2015 to repeal the crude oil export ban. And instead of building liquified natural gas (LNG) terminals for imports, terminals are now being utilized for LNG exports.

Despite these unprecedented steps toward energy security, some are seeking to undermine this progress by banning the extraction of oil and natural gas on federal lands.

What does this mean for the supply of affordable and reliable energy to American customers? And what does this mean, more importantly, for Colorado’s economy already suffering under the toll of a 100-year pandemic?

Well, for Colorado, it’s an economic hammer. The financial impact is staggering.

For starters, the state will lose a projected $35.5 billion in Gross Domestic Product over the next 20 years. The immediate impact is just as drastic.

Between 2021-2024, Biden’s leasing ban will eliminate 5,172 jobs annually, wipe out $2.8 billion in oil and natural gas investments, $1.3 billion in production, $546 million in much-needed tax revenue and a whopping $1.6 billion in high-paying wages.

Colorado’s neighbors to the north and south face similar threats from President Biden’s ban.

As the fifth-largest oil and natural gas-producing state, New Mexico extracts nearly half of its oil and 67% of its natural gas from leases on federal lands. Before the pandemic, tax revenue generated from oil and production overall comprised 20% of the state’s budget. With 62,000 jobs at stake, a federal leasing ban will be catastrophic for one of the country’s most poverty-stricken states.

A federal leasing ban is equally devastating for the Cowboy State. Wyoming’s oil and gas economy is dependent upon federal oil and gas leases. A federal leasing prohibition will severely impact 51% of the state’s oil production and a whopping 92% of its natural gas production.

Before the pandemic, tax revenue generated from oil and production overall comprised 20% of the state’s budget. That generous return in dollars to the state, along with approximately 33,000 jobs, would be put in serious jeopardy if a ban moved forward.

The evidence is clear. Biden’s ban on future federal oil and gas leases represents a dramatic step backward for the U.S. march towards more sustained energy security. It is also be deeply damaging to Colorado.

It’s time for Joe Biden and others to abandon this bad idea and focus instead on using America’s abundant energy to recover from this pandemic.

— Paul Griffin is executive director for EnergyFairness,org, which brings together consumers, policymakers and other stakeholders to discuss energy policy in a fact-based, non-partisan manner

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