Two weeks into a partial shutdown of the federal government, the impact on Wyoming’s oil and gas industry remains uncertain as the agency tasked with overseeing the industry is no longer answering the phone.
News of what’s happening behind the shuttered doors of the Bureau of Land Management has already become the stuff of rumor and conjecture in the state.
Are there engineers on call for emergencies in the Wyoming field offices? Is the Carlsbad field office down in New Mexico actually processing applications for permits to drill — something that is not happening in Wyoming? What happens to environmental reviews related to industry development that are supposed to be open for public comment?
Answers to these questions are not available from officials in the federal government. All non-essential personnel are barred from working, from responding to emails or answering phone calls — be they from oil and gas operators, conservation groups or landowners.
“Anytime you’ve got a shutdown — and people that we work with are regarded as non-essential and therefore they are gone — work just comes to a halt,” said Steve Degenfelder of Kirkwood Oil and Gas, an exploration and production company based in Casper.
The partial shutdown began after Congress funded about three quarters of the federal government but left a number of appropriations bills on the table, caused by disagreement over whether to include the president’s $5 billion ask for a wall along the southern U.S. border in the remaining spending package.
The president signaled Friday that the shutdown could go on for “months or even years” during a news conference from the White House. He also claimed that he may declare a state of emergency in order to get the wall he promised throughout his campaign for the presidency.
The shutdown has created an approximately 800,000-strong unpaid workforce nationally, with about 380,000 furloughed, according to the Washington Post.
It’s not clear how many of about 7,500 federally employed workers in Wyoming are without pay until further notice, how many are working and how many have been instructed to stop working.
What is clear is that the daily operations at the BLM — which oversees the state’s oil and gas industry on federal land — appear to be on hold.
There’s no question that the federal shutdown has an impact on Wyoming’s most important economic driver today: oil and gas. About 75 percent of Wyoming’s natural gas production and 56 percent of its oil production interacts with federal resources. Oil and gas firms drilling on federal land or into federal minerals need a permit to drill from both the state and the BLM.
The lack of a federal agency will likely delay much of the everyday bureaucracy for the industry, such as processing applications for permits to drill, said Mark Watson, head of the Wyoming Oil and Gas Conservation Commission — the state agency that regulates the oil and gas industry. Watson said he had a meeting with the BLM to discuss flaring regulations cancelled this week.
The commission staff will continue to do their part in overseeing the industry in Wyoming, including ensuring compliance for rules that apply on federal land, such as fracking regulations and flaring limitations.
Wyoming regulators are sitting on a record 25,000 applications for permits to drill in the state, a reflection of operator interest in drilling, both now and into the future. The rise was partly a result of the rising price of crude oil throughout much of 2018 as well as a race among producers staking claims in Wyoming’s Powder River Basin.
For wells on federal land or intersecting with federal minerals, operators need a permit from both the state and the BLM.
Operators who are currently drilling, or looking to drill, will likely feel the pinch from the stay in processing these applications, but the size of the impact to Wyoming’s oil and gas industry will depend on how long this shutdown lasts, Watson said.
“If it went for a month, that would affect industry,” he said.
Communication between operators and federal regulators is consistent through the drilling process, from notification that a well has been spudded to federal approval of how a production facility is going to be laid out after a well has been completed and is ready to produce.
Much of that communication is shut down, producers say.
Degenfelder of Kirkwood said his office sent a right of way fee to the BLM office in Rock Springs in late December only to have it returned to his office. There was no one there to receive it.
For operators out in the field right now drilling wells, the lack of a BLM presence could hold up production, he said. Any time drillers on federal land encounter a change in their drilling plans, and there are always changes that arise in the field, they have to submit a notice to the bureau.
“I know I’ve heard from several peer companies that they can’t get sundry approvals here in Wyoming for rudimentary things like construction of tank battery,” he said. “That’s where there is going to be some delays.”
Some of those notifications are just administrative, with BLM signing off on an adjustment, he said. He hopes the Wyoming delegation or an industry representative like the Petroleum Association of Wyoming can impress on officials in Washington that these processes are holding up industry.
“These are wells that could start producing right away and provide the state with severance taxes and federal mineral royalties,” he said.
Some environmental groups immediately criticized the shutdown, as it blocked their ability to follow industry developments, comment on planned drilling projects or environmental issues.
Online systems tracking applications for permits to drill have gone on and off through the end of the December, as did ePlanning, the online database with information on environmental analysis and upcoming oil and gas lease sales, groups report.
“We were trying to file documents to BLM that were due … and there was nobody there,” said Jill Morrison of the Powder River Basin Resource Council, a landowners group in Sheridan.
Morrison questioned whether deadlines would be extended for the numerous public comment periods that are supposed to be open now.
“How do you look at the details? How do you comment intelligently (on a project)? You can’t,” she said.
Western Watersheds, an environmental group, put out a statement in late December questioning the availability of online documents regarding sage grouse management plans. These are broad and significant strategies to conserve a Western bird that are currently proposed for revision by the Interior Department.
A notice on the Interior Department website posted Dec. 26 notes that the website may not be up to date, comments submitted may not be processed until later and inquiries may not be responded to.
The Center for Biological Diversity has sent a letter to Deputy Secretary Bernhardt — currently the acting secretary given the recent resignation of Ryan Zinke — asking for all environmental reviews that overlap with the shutdown period to be extended.
Not all companies are on the ropes with the current shutdown.
Peter Wold, of Casper-based Wold Energy Partners, said his company just released a rig this week and has other drilling locations on hold until August when stipulations that limit operations for wildlife or environmental concerns are lifted. The company does have thousands of applications for permits to drill filed with the state, but none are on the fast track for immediate drilling.
The federal permit side of things is always a bit of an unknown anyway, Wold said.
“One never knows when you are going to get the approval anyway,” he said. “It’s hard for us to determine if we are being impacted (by the shutdown).”
For Wold, and likely a number of producers in Wyoming, the greatest challenge to their drilling plans isn’t the bureaucratic mess from Washington but the price of crude.
“It’s pretty crappy right now,” Wold said. “I don’t think anybody is making money today.”
CHEYENNE — Throughout the ceremony to send off 29 Wyoming Army National Guard aviators to Afghanistan, there was the unmistakable sound of children.
After the Thornton Fire Department opened the proceedings with bagpipes and drums, a child cried out, “Yay!”
As Gov. Matt Mead — in his last speech as commander in chief of Wyoming — and Maj. Gen. Luke Reiner spoke, children’s voices cut the air. At one point during Mead’s speech, what sounded like a small toy car escaping its owner and fleeing down the auditorium’s concrete floor underwrote the governor’s voice.
Some children — like Chief Warrant Officer Joel Rasanen’s two daughters — sat in their fatigue-clothed parents’ arms.
“To the families, we can’t thank you enough,” Reiner told the packed auditorium Friday. “You are absolutely the rock that your soldier relies on, and I know that you will miss him or her dearly.”
Those soldiers, parents and aunts and uncles and sons and daughters, aviators with the 2nd Battalion of the 211th Aviation, will be gone for nine months, the first step in a wave of deployments of Wyoming units to the Middle East. In all, the units will constitute the largest deployment of soldiers from the Equality State to the Middle East since before Mead was governor.
It is this unit’s sixth deployment since Sept. 11, 2001 — and on that day, the unit was preparing for a mission to Bosnia.
The 29 soldiers will leave Wyoming over the coming days. On Saturday, some will fly the unit’s UH-60 Black Hawk helicopters to Fort Bliss, Texas, where the unit will continue training before deploying to Afghanistan. The rest of the company will fly commercially to Texas on Sunday, a spokeswoman said.
They will go from saving lost hikers and inner tubers in Wyoming’s wilderness — efforts that earned several soldiers recognition during the ceremony — to evacuating wounded fighters in America’s longest-running war.
“It’s not lost on me that today, we carry on a long tradition ... of sons and daughters of Wyoming who deploy to a combat zone to save lives,” Reiner said, “to ensure that those injured on the battlefield, to ensure that those wounded in action are given that gift of receiving the best medical care in the world, and it all starts with a ride on your helicopter during that golden hour, the hour of life, the hour that makes a difference, the hour that will bring that man or woman back to their families that they love.”
This unit — Golf Company — will join other detachments from New York, New Jersey and Mississippi. They take with them a white road sign — “Entering Wyoming” — and a state flag, given from Mead to Lt. Logan Koerwitz.
Over the next eight months, more than 250 more Wyoming soldiers will deploy to the Middle East.
“I guess I would just ask one thing,” Capt. Eric Becker, the company commander who will be staying in Wyoming, told the soldiers. “Stay focused on the mission, stay in your training ... and take care of one another. That last one’s the most important. Make sure the guy sitting to your left and to your right is OK.”
He told the assembled families, as a child babbled somewhere in the audience, to call him if they needed anything. His attention turned back to the 29 soldiers leaving those families.
“God bless you all, Godspeed, and I’ll see you in nine months.”
WASHINGTON — President Donald Trump declared Friday he could keep parts of the government shut down for “months or even years” as he and Democratic leaders failed in a second closed-door meeting to resolve his demand for billions of dollars for a border wall with Mexico. They did agree to a new round of weekend talks between staff members and White House officials.
Trump met in the White House Situation Room with congressional leaders from both parties as the shutdown hit the two-week mark amid an impasse over his wall demands. Democrats emerged from the roughly two-hour meeting, which both sides said was contentious at times, to report little if any progress.
The standoff also prompted economic jitters and anxiety among some in Trump’s own party. But he appeared in the Rose Garden to frame the upcoming weekend talks as progress, while making clear he would not reopen the government.
“We won’t be opening until it’s solved,” Trump said. “I don’t call it a shutdown. I call it doing what you have to do for the benefit and the safety of our country.”
Trump said he could declare a national emergency to build the wall without congressional approval, but would first try a “negotiated process.” Trump previously described the situation at the border as a “national emergency” before he dispatched active-duty troops in what critics described as a pre-election stunt.
Trump also said the hundreds of thousands of federal workers who are furloughed or working without pay would want him to “keep going” and fight for border security. Asked how people would manage without a financial safety net, he declared: “The safety net is going to be having a strong border because we’re going to be safe.”
Democrats, on the other hand, spoke of families unable to pay bills and called on Trump to reopen the government while negotiations continue. Senate Democratic Minority Leader Chuck Schumer said, “It’s very hard to see how progress will be made unless they open up the government.”
Friday’s White House meeting with Trump included eight congressional leaders — the top two Democrats and Republicans of both chambers. People familiar with the session described Trump as holding forth at length on a range of subjects but said he made clear he was firm in his demand for $5.6 billion in wall funding and in rejecting the Democrats’ request to reopen the government.
Trump confirmed that he privately told Democrats the shutdown could drag on for months or years, though he said he hoped it wouldn’t last that long. Said Trump: “I hope it doesn’t go on even beyond a few more days.”
House Democrats muscled through legislation Thursday night to fund the government but not Trump’s proposed wall. However, Senate Majority Leader Mitch McConnell has said those measures are non-starters on his side of the Capitol without the president’s support.
A variety of strategies are being floated inside and outside the White House, among them trading wall funding for a deal on immigrants brought to the country as young people and now here illegally, or using a national emergency declaration to build the wall. While Trump made clear during his press conference that talk on DACA (the Deferred Action for Childhood Arrivals program) would have to wait and that he was trying to negotiate with Congress on the wall, the conversations underscored rising Republican anxiety about just how to exit the shutdown.
Seeking to ease concerns, the White House sought to frame the weekend talks as a step forward, as did McConnell, who described plans for a “working group,” though people familiar with the meeting said that phrase never actually came up. Trump designated Vice President Mike Pence, Homeland Security Secretary Kirstjen Nielsen and adviser Jared Kushner to work with a congressional delegation over the weekend. That meeting is set for 11 a.m. today, the White House said.
Some GOP senators up for re-election in 2020 voiced discomfort with the shutdown in recent days, including Cory Gardner of Colorado and Susan Collins of Maine, putting additional pressure on Republicans.
But with staff level talks there is always an open question of whether Trump’s aides are fully empowered to negotiate for the president. Earlier this week, he rejected his own administration’s offer to accept $2.5 billion for the wall. That proposal was made when Pence and other top officials met at the start of the shutdown with Schumer.
During his free-wheeling session with reporters, Trump also wrongly claimed that he’d never called for the wall to be concrete. Trump did so repeatedly during his campaign, describing a wall of pre-cast concrete sections that would be higher than the walls of many of his rally venues. He repeated that promise just days ago.
“An all concrete Wall was NEVER ABANDONED, as has been reported by the media. Some areas will be all concrete but the experts at Border Patrol prefer a Wall that is see through (thereby making it possible to see what is happening on both sides). Makes sense to me!” he tweeted on Dec. 31.
Trump was joined by Pence in the Rose Garden, as well as House Republican leaders Kevin McCarthy and Steve Scalise. McConnell, who went back to the Capitol, unaware of the press conference, said it was encouraging that the White House officials and the congressional contingent would meet over the weekend “to see if they can reach an agreement and then punt it back to us for final sign off.”
Schumer said that if McConnell and Senate Republicans stay on the sidelines, “Trump can keep the government shut down for a long time.”
“The president needs an intervention,” Schumer said. “And Senate Republicans are just the right ones to intervene.”