Texas Panel Hearing: Biden Lease Policy Puts ‘Oil Patch’ Workers, Communities at Risk

Drilling rigs sit unused on a companies lot located in the Permian Basin area in Odessa, Texas, on March 13, 2022. Joe Raedle/Getty Images

The Biden administration is only putting about 20 percent of eligible federal land up for new oil leases in many areas of the country, Congressional lawmakers have been told during a Feb. 13 “field hearing” in Odessa, Texas.

And industry, community, and government leaders say it is “slow-walking” applications through a “broken permitting process” without addressing a backlog of more than 4,500 drill applications.

They say these actions by the Biden administration have driven up energy prices while restricting new oil and gas development, imperiling jobs, and threatening local governments and school districts across the nation with a looming “fiscal cliff.”

In 2022, the federal government approved 233 drilling permits a month across the United States, down from more than 400 monthly during the Trump administration, a decline profoundly impacting the 950,000 Americans who work in the industry, and the nearly 20 million jobs that rely on them, officials said.

Vice President Kamala Harris (2L) and special presidential envoy for climate John Kerry (L) watch as President Joe Biden signs several executive orders related to climate change, including one directing a pause on new oil and natural gas leases on public land, on Jan. 27, 2021. Mandel Ngan/AFP via Getty Images

But with Republicans assuming control of the United States House of Representatives following November’s midterm elections, the newly installed GOP leadership is vowing to “unleash” the nation’s domestic energy production in a concerted campaign that began with 10 hours of hearings on 17 bills before the House Energy and Commerce and Natural Resources committees, on Feb.7–9.

With the House in recess until Feb. 27 for “district work,” that messaging continues with “field hearings” on the 17 bills.

The first of these road productions was the Feb. 13 Natural Resources Committee’s Energy and Mineral Resources Subcommittee’s hearing, Federal Energy Production Supports Local Communities, at the University of Texas campus in Odessa.

There’s no secret why the panel chose a city in West Texas’s Permian Basin to tout Republicans’ 17-bill package. A report by the Texas Independent Producers and Royalty Owners Association (TIPRO) released this week, confirms that the Lone Star State leads the nation in oil and natural gas production and jobs.

According to TIPRO, nationwide, 45,700 oil and gas businesses employ 950,000 Americans in direct industry jobs with a combined $48 billion annual payroll that pays an average yearly wage of $120,665 and supports more than 19 million jobs.

In 2022, the report documents, Texas’ 12,306 oil and gas businesses employed more than 347,000 in direct industry jobs—37 percent of the nation’s total “oil patch” workforce—earning an average salary wage of nearly $140,000 and supporting 2.6 million jobs.

Lease Loss Hits Locals Hard

None of this seems to matter to the Biden administration and Democrats who ruled the House for the past four years, emphasizing climate change, environmental protection, and “green” energy development over protecting a key industry and safeguarding the security of the nation’s energy supply, panel members said.

“Welcome to a new day in the House of Representatives,” Rep. Pete Stauber (R-Minn.) said. “For the last four years, under Democratic control, this subcommittee preached a ‘keep-it-in-the-ground mantra,’ regardless of its world impact, banning lands from mineral development, arbitrarily raising royalty rates, sidelining American workers at the behest of the wealthy, and restricting energy and minerals development whenever  possible—but no longer.”

New Mexico Sen. David Gallegos (R-Eunice), Permian Strategic Partnership President/CEO Tracee Bentley, and New Mexico and Gas Association president and CEO Doug Ackerman testified about how communities in West Texas and Southeast Mexico benefit from federal oil leasing revenues.

Those revenues fund education, health care, workforce development, and numerous other initiatives are at risk because of the Biden administration’s oil leasing slowdown, they said.

Conservationists say linking public lands leasing to the nation’s Strategic Petroleum Reserve won’t produce more oil or gas, but will lock up lands in drilling leases—while locking out public access—for decades. Charlie Riedel/AP Photo

After assuming office in January 2021, the Biden administration did not hold a lease sale until June of 2022. Only 20 percent of the parcels originally included for lease were offered—in New Mexico, only 110 square miles of the 200 square miles received bids—and the sale included a 50-percent royalty hike.

The Biden administration is averaging only 9.6 parcels offered for lease per year. For comparison, the Trump administration offered an average of 153 parcels per year and the Obama administration offered an average of 103 parcels per year, committee members said.

This is a violation of the federal Mineral Leasing Act, Rep. August Pfluger (R-Texas) said, which requires “lease sales shall be held for each state where eligible lands are available at least quarterly and more frequently if the [U.S.] Secretary of the Interior determines such sales are necessary.”

Pfluger asked Ackerman if the 400 members of the New Mexico and Gas Association want to see more leases opened. He said most members would be happy “just to get to do the permits we already have, and start from there.”

The industry faces legal challenges in New Mexico and Wyoming that “could shut down production,” regulatory uncertainties, and an exacting, lengthy permitting process that is discouraging investors, he said.

“You pay $50,000 a day to keep a well open, every day it is not producing—not a good ROI,” Ackerman said, adding at best it’s six-to-12 months [to open a well] and legal challenges can get you frozen at any time.”

Let States Regulate

Natural Resources Committee Chair Rep. Bruce Westerman (R-Ark.) said “you can’t go out and look at a project under a state permit or a federal permit and tell any difference in the environmental quality of the project” yet states process permits so much faster.

He said maybe it is time to ask, “Are American taxpayers best being served by these bureaucracies that aren’t producing results, more of a hindrance than assistance?” and pass regulatory authority to the states.

“The state has been much easier to work with” despite New Mexico having “the highest regulatory content there is,” including strict methane-capture requirements, Ackerman said.

“So the state can permit more quickly and efficiently?” Westerman asked.

Ackerman didn’t directly respond but said states assuming regulatory control of federal public lands was “one of the alternatives” approved by the association.

The industry seeks “to just have a seat at the table,” he said. “Why not bring experts and innovators to the table when it comes to [conforming] permitting and regulatory issues to some form of reality.”

“There is no reason to go to Saudi Arabia, Venezuela, or God forbid, Russia, to ask them to make up for the supply of energy that we should be producing here at home” if not for Biden’s energy policies, Westerman said.

House Energy and Commerce Committee Chair Cathy McMorris Roberts (R-Wash.) will lead another hearing in Odessa on Feb. 16.

Rep. Tom Tiffany (R-Wisc.) told those in attendance that their presence was sending a message to Washington.

For those championing “the ‘green fantasy,'” he said, “the Permian is a problem. You are stopping people who want to impoverish Americans with higher energy prices. You are standing up for the United States of  America.”

Westerman said the 17-bill package could be ready for floor votes “by the end of March.”