Upon assuming office Wednesday, President Joe Biden swiftly signed several executive orders, effectively unwinding a ream of energy policies instituted by the Trump administration.
Biden made repeated overtures during his campaign to fight climate change, calling the rapid rise in greenhouse gas emissions a crisis facing the nation and world. Part of his ambitious plans to slash carbon dioxide levels involve weaning the country off of fossil fuels.
It’s a transition many in Wyoming consider lethal to the state’s economy.
Wyoming produces more coal than any other state, hosting some of the world’s largest coal mines. The state also ranks among the top oil and natural gas producers on federal land. When it comes to total energy expenditures per capita, Wyoming is first in the country.
Yet several of the executive orders signed into law last week could undermine Wyoming’s heavy reliance on coal, oil and natural gas production on federal land.
With the stroke of a pen, Biden rejoined the Paris Climate Agreement, an international climate change treaty. He revoked a permit for the Keystone XL pipeline, a 1,700-mile piece of infrastructure many here considered crucial for transporting Wyoming crude to market. Biden halted drilling in the Arctic National Wildlife Refuge. What’s more, one of his orders will trigger a sweeping review of the former president’s regulatory rule changes.
In Wyoming, fossil fuel industries equate to revenue, jobs and economic activity. Still, others in the state have long been urging leaders not to see the dramatic flip in presidential priorities as all bad. It could be just the shock the state needs to begin adapting to a low-carbon future, some say.
Among the dizzying number of orders rolled out on Wednesday, the Star-Tribune analyzed which could impact Wyoming most.
Regulatory rollback, reversed
In one particularly potent executive order, Biden ordered nearly all executive departments and agencies to review regulations and other actions introduced by former President Donald Trump. Biden wants to ensure all federal policies protect public health, promote environmental justice and reduce greenhouse gas emissions, according to the order.
In contrast, most of the rules and regulations issued by the Trump administration sought to “streamline” regulatory processes or “lift regulatory burdens” on energy companies to promote more economic development and energy independence. Several lawmakers and state officials in Wyoming have noted their preference for state primary over environmental protections. Many here supported Trump’s changes, seeing them as a way to expedite energy development.
Randall Luthi, Gov. Mark Gordon’s energy adviser, called the actions taken by Biden in his first day in office “extremely disappointing.” But for now, much is still unknown, he said. The governor’s office will be watching what rules may be on the chopping block.
“We knew every decision would likely be made through the climate lens, but it appears to be even broader than what we thought it would be,” he noted.
Federal agencies will be tasked with interrogating amendments to sage grouse protection plans, measures to relax methane emission, revisions to the nation’s landmark environmental act, among at least 101 other regulations. That said, Biden’s order does not immediately nullify all the rules and regulations installed by the Trump administration. Undoing Trump’s legacy will likely take time.
Meanwhile, conservation groups cheered Biden’s decision to investigate the impacts of Trump’s policies on the climate and public health.
“This announcement shows President Biden is making good on his campaign promises to protect America’s land and water for future generations, address climate change head-on, and erase the Trump administration’s horrific environmental actions,” Jennifer Rokala, executive director for the Center for Western Priorities, said in response to the executive order requiring federal agencies to review Trump’s rules. “The list of policies to be reviewed is rightfully long.”
Pipeline dreams dashed
As part of the same executive order, Biden took steps to revoke a permit needed to continue construction of the Keystone XL pipeline, a highly contested, 1,700-mile pipeline intended to transport some 800,000 barrels of crude a day between the Canadian province of Alberta and the Texas Gulf Coast.
Biden said allowing the permit to stand would “not be consistent with my Administration’s economic and climate imperatives.”
“The Keystone XL pipeline disserves the U.S. national interest,” the executive order stated. “The United States and the world face a climate crisis. That crisis must be met with action on a scale and at a speed commensurate with the need to avoid setting the world on a dangerous, potentially catastrophic, climate trajectory. At home, we will combat the crisis with an ambitious plan to build back better, designed to both reduce harmful emissions and create good clean-energy jobs.”
The pipeline has faced sustained opposition from some Indigenous communities and environmental groups worried the expansion of oil sands crude development and the associated infrastructure would only exacerbate climate change while harming surrounding air, scarce drinking water sources and land. Over 90 leading economists and scientists have come out against the project.
Though the pipeline was not planned to cut through Wyoming, several oil and natural gas operators here said the additional pipeline infrastructure would have significantly expanded their ability to access markets and stay competitive.
“We’re pretty disappointed in the cancellation of the Keystone XL pipeline,” said Ryan McConnaughey, communications director of the Petroleum Association of Wyoming. “Pipelines have been proven to be the most environmentally sound means of transporting those products. And the cancellation comes when we’re trying to get the economy back going. This will really hamper our ability to recover the economy.”
Energy companies lambasted the new administration, calling the move reckless and detrimental to preserving the country’s energy independence.
Steve Degenfelder, land manager for Kirkwood Oil and Gas LLC, said the decision would directly impact the independent company he works for in Casper.
“The Keystone XL pipeline was going to increase pipeline space out of Canada and North Dakota,” he said. “Without that pipeline, and possibly even without the Dakota Access pipeline, we are back to where we are right now, which is a lack of pipeline space to accommodate supply.”
Kirkwood conducts much of its exploration and development in Fremont County and the Big Horn Basin, but the firm needs a way to transport the crude to market, and competition is tight.
“It’s whoever wants to sell their crude oil for the cheapest,” Degenfelder said.
Instead of trading off of West Texas Intermediate, a U.S. benchmark for oil, much of western Wyoming crude competes against Western Canadian Select, he said. In Wyoming, transportation costs and a lack of pipeline infrastructure can mean less profit per barrel.
“With only four rigs running in the state right now, and limited federal lease sales even at the end of the Trump administration, small operators are not getting in line to drill new wells, they’re trying to reduce their costs as much as possible,” he said.
In Degenfelder’s mind, the next two years will be plain hard for Wyoming’s oil and gas operators.
“It’s more than just disappointment,” Luthi, the chief energy advisor for Gordon said of the cancellation of the Keystone XL pipeline. “It’s somewhat eye-rolling that this project is so close to being something that could be so useful, and now it is just gone with the reversal. It would free up some pipe space.”
Steve Weiler, a partner at the international law firm Dorsey & Whitney, has about three decades of experience working in natural gas and electrical industries. He predicted the ascendance of Biden to the presidency would likely mean far less opportunities for oil and gas growth in coming years.
“The president has executed a sharp, 180 degree course change from his predecessor’s pro-fossil fuel policies,” Weiler said in a written statement. “President Biden promises an all-out attack on climate change, which could reduce opportunities to develop new oil and gas reserves, shrink oil and natural gas markets, and limit the development of new gas pipelines and liquefied natural gas (LNG) export facilities.”
A ‘punitive’ suspension
It wasn’t just Biden’s flurry of executive orders on Wednesday that worried Wyoming.
That same day, the Interior Department issued an order temporarily suspending the issuance of new leases or permits for drilling on federal land and water for 60 days, unless proper approval from certain high-ranking officials is obtained.
Some energy experts here regarded the order as a typical step taken by new presidential administrations. But Wyoming’s delegation in Washington, along with the governor and industry groups, were quick to slam the Biden administration’s action. Wyoming produces more oil and natural gas on federal land than almost any other state in the U.S.
The temporary suspension would translate into layoffs and only more economic challenges for a state already struggling through a recession, many said.
Wyoming’s governor called the decision unnecessary, disheartening and punitive.
“At a time when we need to come together, this action only irritates wounds that have barely begun to heal. Wyoming and other Western states are particularly affected by sweeping orders like this, which interfere with our ability to expand our economy,” Gordon said in a statement. “All Wyoming people should be concerned about this because the revenue from development on public lands drives the funding for schools, healthcare and other key services.”
Some Wyoming political and industry leaders said they were bracing for more actions by Biden that could further squeeze the state’s fossil fuel industries.
Kathleen Sgamma, president of the Western Energy Alliance, called the order “a precursor to a longer-term ban.”
Shannon Anderson, a staff attorney for the Powder River Basin Resource Council, a landowners group, took a different tone after reviewing the Department of Interior’s order and Biden’s executive actions last week.
“The climate crisis is considered a crisis by this new administration,” Anderson noted. “It’s a priority for them to address climate change within the scope of the entire federal government, including notably our federal land managers like the Bureau of Land Management. That is a very dramatic shift in policy, and a very welcome one, for organizations and people who care about the climate.”
Now it’s time for Wyoming to adapt, she said.
Follow the latest on Wyoming’s energy industry and the environment at @camillereports