You could argue it’s my nature as an entrepreneur to spot opportunities. Is it too much to hope for that, when presented with an opportunity to make things better, our state and national officials would take notice, too?
Wyoming’s state and federal representatives are pushing back hard against the Biden administration’s oil and gas leasing pause on public lands. The reaction is no surprise given the overwhelming support here in November’s election for our past president. It could be argued that the leasing pause is a benefit to future campaigns, providing a platform from which to condemn an already unpopular administration and to prove to their voters that they will represent their interests accordingly. On the other hand, in places outside Wyoming, the pause lends the perception that the new administration is speeding toward renewables at an encouraging pace. Either way, it makes for good politics.
But is it good business? Possibly.
No one is arguing that oil and gas production isn’t critical to Wyoming’s economy. Perhaps just as importantly, the industry has helped to shape our state’s cultural heritage too. I experienced this first-hand growing up as my grandparents owned an oil field north of Casper for a while. My grandmother still displays images of rigs throughout her home in Arizona, the iconic silhouette painted, cut, knitted and even burned into different mediums. Given both the economic and cultural value of the fossil fuel industries, it would be a mistake not to fight for their future in Wyoming.
But without a vision for our state that accepts the reality of a global decline in fossil-fuel markets, Wyoming won’t be able to support the producers still operating in the state. We have to make way for new industry if we want to hope to preserve the old.
The structure of the current leasing program costs state taxpayers more than it provides, ignores competing interests in overlapping economic systems and overlooks obvious cost-savings efficiencies.
The last time costs per acre for federal leases were evaluated was in 1987. Since that time, the government has been auctioning off parcels of land to private operators for as little as $1.50 an acre, only half of which comes back to the state. These leases last for five to 10 years each and come with no requirements to develop the land. They do, however, tie up the parcels with complicated use rights that diminish the opportunities for other usages like recreation and conservation.
Meanwhile, private lands leased for the same purpose are subject to market conditions. This means that the government is both selling tax payers’ interests below market value and driving down the market for private property leases. Either way, Wyoming’s citizens lose.
Efficiencies are another topic. Of the more than 8 million leased acres in the state, fewer than 5 million are producing — further evidence of weakness in the current leasing program. Despite Wyoming’s relative abundance of these resources, less than 75% of leased lands end up producing. Surely, technological advances exist to identify parcels more likely to yield. With fewer, more promising leases to maintain, operators can save time and money in focusing their efforts. More yield generates more revenue — people start to win.
It’s not just the people, either.
Federal lands are also public lands. The same ones where our wildlife live — the same acres we use for conservation and recreation. They promote our booming tourism industry by drawing millions of people to our wide-open spaces each year. Fossil fuel development disrupts wildlife habitat and deters recreation and tourism. These impacts occur without development too, as the effect of a lease is often to slow or halt other uses. Undeveloped leases end up costing taxpayers and local communities as a result.
Lastly, the current policy is a pause. Not a ban.
Though the pause creates a convenient straw-man for opposition, that approach is exceedingly short-sighted. Volatile global markets and increasing demand for renewable and clean energy sources have been negatively impacting Wyoming’s economy and its people for decades. It’s entirely plausible that the pause may actually reveal opportunities for revenue enhancement, industry support and transition strategies for displaced workers.
We have to continue to ask our policy makers for vision and solutions. They would be wise to pause themselves in consideration of the potential this policy might reveal. Participating in a long overdue evaluation of the program could increase return on investment for taxpayers and save operators money on development. Guiding an assessment that recognizes and evaluates the value of other potential uses, takes care of negatively impacted communities and helps position lands, communities and operators for clean energy transitions would demonstrate meaningful leadership.
In the nonprofit sector, we often talk about a scarcity mindset. It is the idea that our decisions are driven by fear of limitations. In a business model dependent on intangibles like compassion, generosity and community, this way of thinking can be very damaging — and the most successful organizations often thrive by bucking it. Imagine what might be accomplished for our state if we also reject possibility, ideas and compromise as limited commodities.
Western author Terry Tempest Williams wrote: “The eyes of our future are looking back at us and they are praying for us to see beyond our own time.”
In this time, we would do well to explore the potential in Biden’s vision, and to admit to a fuller picture of what is possible for the future of Wyoming.