On-and-off again relationships can be messy and have a lot of unintended consequences — the same holds true for a federal oil and gas leasing moratorium.
As courts go back and forth on the legality of the Department of Interior’s federal oil and gas leasing ban, Montana’s energy companies and others throughout the country have been subjected to long periods of uncertainty, hurting local economies and state revenues. Oil and gas operations on federal lands have been repeatedly stopped, and then subsequently started, and then stopped again as this issue plays out in the courts.
The thinking behind this potential leasing ban is that the ramifications of oil and gas operations are potentially hurtful to the environment and will delay our nation’s inevitable energy transition — but that could not be further from the truth.
The oil and gas sector has provided billions in state revenue over the past years, most of which goes toward crucial capital outlays like education, health care and infrastructure — and of course, preservation efforts. Without the financial contributions and royalties collected from oil and natural gas operations, Montana’s communities, environment, and very way of life would be forever changed.
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Firstly, with gas prices rising in Montana and the Organization of the Petroleum Exporting Countries (OPEC+) rebuffing calls from federal officials to increase production levels, there is an urgent need to preserve America’s energy independence. Protecting domestic oil and gas operations is critical to maintaining our nation’s energy reserves and ensuring that we don’t have to rely on other nations. An analysis of a federal leasing halt by the American Petroleum Institute found that through 2030, the United States would spend $500 billion more on energy from foreign suppliers and oil imports from foreign sources would increase by 2 million barrels a day.
Outsourcing our oil and gas needs means that countries with less stringent environmental regulations will increase production, resulting in additional air and water pollution in those countries and globally than would be if production remained here.
Additionally, putting a stop to leasing on federal lands would have devastating consequences for communities that rely on oil and natural gas revenues to support local investment and development. Revenue from oil and gas activity comprises 5.6% of Montana’s general fund budget, which provides funding for state and local programs such as education, conservation, health care and infrastructure.
We cannot take away critical funding from communities with no solution and expect there to be no consequences, especially with the precarious financial situations many find themselves in due to the pandemic. Workers are still getting back on their feet, businesses are struggling to keep their doors open, and students are just returning to school. Our lawmakers shouldn’t pursue an ill-advised leasing ban that leaves economies in jeopardy and hurts growth and development.
A federal leasing moratorium would also further exacerbate economic woes due to the jobs and economic activity lost from such an action. The oil and natural gas industry supported over 50,000 jobs — many of them offering high-paying, reliable work — and contributed more than $6.2 billion to Montana’s economy in 2019.
The state revenue provided by the industry’s operations has been critical to growing our state’s economy and boosting business for some time and will continue to be in the future — but only if lawmakers come to their senses and say no to a federal leasing ban.