Oil and Gas Industry State Impacts Under the Biden Administration

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The Biden Administration’s plan to address climate change by banning drilling on federal lands, cancelling the Keystone XL Pipeline permit, and phasing out fossil fuels entirely, is misguided and dangerous. Not only will this plan actually increase carbon emissions, it will erode American energy independence, destroy U.S. jobs, and imposes whirlwind restrictions on whole industries and cripple states that have fostered growth in the energy sector.

Ban on New Leasing and Drilling on Federal Lands and Waters

  • “About 22 percent of U.S. oil production is reliant on federal lands and waters.”[1]
  • “Biden’s move will have a disproportionate effect on states with large swaths of federal lands used for oil and gas activity. New Mexico, for instance, has 24 million acres of federal land, or about 32% of the state’s total land mass; Wyoming has 29 million.”[2]
  • According to a September 2020 study by the American Petroleum Institute, the total projected peak jobs lost from a ban on new federal leasing and development was 936,000 jobs.[3]
[4]
  • Wyoming officials issued a study in December 2020 that stated a moratorium on new leases would cost eight Western states $8.1 billion in tax revenue[5] and $34.1 billion in investment through 2025.[6]
[7]
  • According to a Bureau of Ocean Energy Management estimate, 277,000 jobs are supported by drilling in the Gulf of Mexico.[8]
    • “The Outer Continental Shelf (OCS) is a vital component of our nation’s energy economy.  It accounts for 18% of domestic oil production, 4% of domestic natural gas production, billions of dollars in annual revenue for the Treasury, states, and conservation programs, and supports more than 300,000 jobs.”[9]

Cancelled Keystone XL Pipeline Permit

  • TC Energy Corporation, the Keystone XL pipeline construction company, has immediately eliminated 1,000 construction jobs that would have been working on the pipeline.[10] (Source
  • TC Energy Corporation expected the Keystone XL pipeline to employ more than 11,000 Americans in 2021.[11] Furthermore, TC Energy had awarded construction contracts totaling $1.6 billion to six American companies that employed union workers. The companies are:
    • Barnard Pipeline (Bozeman, MT)
    • Associated Pipeline (Houston, TX)
    • Michels (Brownsville, WI)
    • Precision Pipeline (Eau Claire, WI)
    • Price Gregory International (Katy, TX)
    • U.S. Pipeline (Houston, TX)[12]
  • It’s not only jobs in the direct oil and gas mining field that suffer, construction jobs and other supporting industries will all suffer a decline in employment. For each direct oil and gas job, it is estimated that an additional 3 indirect jobs are created.[13][14]
  • Editorial, The Wall Street Journal: “The Obama State Department found five separate times that the pipeline would have no material impact on greenhouse gas emissions since crude would still be extracted. Shipping bitumen by rail or tanker would result in 28% to 42% higher CO2 emissions and more leaks.”[15]

[1] Brandon Mulder, “Fact-check: Will Biden’s drilling ban on federal leases ‘kill’ 120,000 Texas jobs?”Austin American-Statesman, Jan. 29, 2021.

[2] Ibid.

[3] “The Consequences of a Leasing and Development Ban on Federal Lands and Waters,” The American Petroleum Institute, Sept. 2020.

[4] Ibid, 19.

[5] Dr. Timothy J. Considine – Professor of Energy Economics, p.viii, “The Fiscal and Economic Impacts of Federal Onshore Oil and Gas Lease Moratorium and Drilling Ban Policies,” University of Wyoming, Dec. 14, 2020.

[6] Ibid, vi.

[7] [1] Ibid, viii.

[8] “Economic Contribution,” Bureau of Ocean Energy Management, U.S. Department of the Interior, accessed Feb. 2, 2020.

[9] Statement of Katharine S. MacGregor, Acting Assistant Secretary, Land and Minerals Management, U.S. Department of Interior before the Committee on Natural Resources, July 12, 2017.

[10] “Loss of Keystone XL pipeline expected to hurt future oilpatch growth,” BOE Report, Jan. 21, 2021.

[11] Press Release, “TC Energy Awards More Than $1.6 billion in American Contracts to Build Keystone XL, Project to Create Over 8,000 Union Jobs in 2021,” TC Energy Corporation, Oct. 28, 2020.

[12] Ibid.

[13] “2020 Workforce Fact Sheet,” American Exploration & Production Council, Sept. 2020.

[14] Mark Agerton, Peter Hartley, Kenneth Medlock III, Ted Temzelides, p.16-17,“Employment Impacts of Upstream Oil and Gas Investment in the United States,” International Monetary Fund, Feb. 2015.

[15] Editorial, “Biden’s Keystone Pipeline Kill,” The Wall Street Journal, Jan. 20, 2021.