(Reuters) – A ban on new oil and gas drilling leases on federal lands would cost eight Western states $8.1 billion in tax revenue and $34.1 billion in investment in the next five years, according to a study released on Tuesday by the state of Wyoming.
The report, commissioned by one of the nation’s top oil and gas-producing states, aims to push back against President-elect Joe Biden’s campaign promise to halt leasing on public lands as part of a sweeping plan to tackle climate change.
“The economic predictions are devastating, to be blunt, to Wyoming,” Governor Mark Gordon said during a virtual press conference to unveil the study, which was conducted by University of Wyoming Professor Tim Considine.
The policy would be most detrimental to Wyoming and New Mexico, the report said, where most drilling activity occurs on federal lands. Without new leasing, states would lose the opportunity to generate revenues from new wells on those lands. As a result, those states are projected to lose $304 million and $946 million a year in tax revenue, respectively, through 2025.
Annual losses in revenue and investment are projected to increase through 2040 as the oil and gas industry becomes more productive and prices increase, the report said. Between 2036 and 2040, the investment losses are expected to reach $164.5 billion.
Biden will assume office on Jan. 20 and has promised aggressive policies to reduce climate-warming greenhouse gas emissions. His administration will mark an abrupt shift from that of President Donald Trump, which has sought to boost domestic oil and gas production over the last four years.
During the press conference, Wyoming officials said it was likely that a leasing moratorium would simply shift production and related emissions to other regions, such as Mexico or Canada, rather than having the desired effect of helping to curb global emissions from drilling activity.
Biden campaign officials were not immediately available for comment.