Officials say oil rebounding, but work with feds needed

GILLETTE — A year after its prices dropped below zero, oil seems to be on the rebound, but a lot of work remains to be done under the Biden administration.

That was the message that three state officials had for people Wednesday morning at the Energy Exposition at the Cam-plex Wyoming Center.

Tom Kropatsch, the deputy oil and gas supervisor for the Wyoming Oil and Gas Conservation Commission, said 2019 was a great year for Wyoming oil, with 101.8 million barrels produced, which was the highest figure since 1991. In 2020, despite the pandemic, Wyoming produced 89.1 million barrels, a higher figure than in 2018. And so far this year, more than 40 million barrels have been produced.

In February 2019, there were 34 rigs in Wyoming. At one point in 2020, there were none. And now there are 17, “so we’re coming back,” said Randall Luthi, chief energy adviser for governor.

Wyoming has been an energy-producing state for decades, and that’s not going to change any time soon, Luthi said.

“We’re going to find ways to survive until energy can thrive,” he said.

But in order to survive, it must be willing to work with the federal government, and vice versa.

Todd Parfitt, director of the Department of Environmental Quality, said 96% of federal government programs are implemented by the state, so the states should be consulted about federal programs that are going to affect them.

“All we ask is, we want them to be a good neighbor,” Luthi said. “But the federal government isn’t always a good neighbor.”

That was evident a week into the new administration.

On Jan. 27, President Joe Biden issued a moratorium on new oil and gas leases as part of executive orders that he signed to fight climate change.

That month, a number of governors, including Wyoming Gov. Mark Gordon, wrote to Biden asking him to reconsider this decision, or at least consult with the states that it would affect before moving forward.

“That was January. We’re still waiting for a reply back,” he said.

The moratorium was challenged in a lawsuit by several states, and a federal judge in Louisiana ruled against it, granting a preliminary injunction to those states.

Wyoming filed its own lawsuit against the moratorium in March. No decision has been reached yet, Luthi said.

The EPA is going to use the social cost of carbon and methane “to essentially justify the rules they’re trying to push forward,” Parfitt said.

One concerning practice that’s been happening more often under Biden’s administration is the practice of “sue and settle,” where a third-party organization sues the EPA over the agency’s purported failure to issue a regulation by the date required in the underlying statute or in a manner consistent with law. 

It was common during the Obama administration but wasn’t as widespread during Trump’s presidency. It’s seen a resurgence under Biden, Parfitt said.

If the third party wins the lawsuit, its attorney fees are paid for by the government, but what’s more concerning, Parfitt said, is that “the states do not have a seat at the table.”

“We have to live with whatever comes out of the [settlement],” he said. “It’s very problematic.”