The mantra of “Drill, Baby, Drill” could become reality if the executive orders of President Donald Trump succeed in increasing oil and gas production in Colorado and nationally, a purpose of industry supporters and a fear of public countries advocates And renewable energy.
Trump explained An energy law He said that the previous administration that was created by ‘pursuing a precarious insufficient and intermittent energy supply’, a width in the increasing use of renewable energy.
But it is unclear whether the US, the world’s leading producer of oil and natural gas, will see drilling, even with Trump’s urge to more. Analyst Note The industry has been more focused on the cash flow in recent years Instead of more streams of Putten.
And environmental organizations said that coloradans and other Westerners consistently support the preservation of public countries and protection for air, water and animals in the light of increased development.
National and state sector representatives praised for their part The executive order Published on the first day on Trump who calls on to unleash “America’s affordable and reliable energy”, in particular oil and gas. Other sources that are promoted are coal, hydropower, biofuels, critical minerals and nuclear energy.
The order instructs federal agencies to accelerate the issue of permits on federal countries, and says that difficult regulations have impeded the development of the energy sources of the nation in recent years.
“We are very happy that the regulatory crop will be cleared by the Trump administration and we will work closely with it,” said Kathleen Sgamma, president of the Western Energy Alliancethat represents independent oil and gas companies.
The volume of lease contracts issued on federal countries under the Biden administration was “ridiculously low,” Sgamma said. She criticized what they mentioned overly difficult regulations, including a new rule about reducing methane emissions from Putten and a lack of regular lease sale.
“The vast majority of our industry looks at methane instructions and says:” Yes, we are happy to meet methane instructions “, but when it is intended to be punitive and to bind industry and to reduce development and production, then is then We when “I’m going to complain,” said Sgamma.
Despite roadblocks under the Biden administration, producers have continued, Sgamma said. However, she said that companies drill with permits that have been approved by the first Trump administration. “The full effects of Biden’s policy have not yet flourished.”
Early, The Biden administration has suspended new oil and gas lease and drilling permits On public countries and waters to assess programs of the Department of Interior as part of tackling climate change. The sale was resumed, but according to the industry, much fewer lease contracts were offered.
“I think the most important general point is to look at how many lease contracts the industry has on which they are on, lease contracts they hold but not produce. In much of the lease sale that was held, the industry often did not show much interest, “said Rachael Hamby, policy director at Western Priorities, a Colorado -based nature conservation group.
A report of the Western priorities The use of government data said from the tax 2023, companies held rental contracts for more than 10 million hectares, or 46% of the total federal grounds under lease, which were inactive. According to the analysis, approximately 6,900 permits were not used.
Amanda Eversole, Executive Vice President and Chief Advocacy Officer of the American Petroleum Associationsaid that it is vital that the industry has an adequate inventory of lease contracts because the development of new sites takes a long time. She said that in 2024 there was a lot of concern when no offshore lease sale was planned for the first time since 1966.
Rental contracts in federal countries and waters represent around 25% of the general area of industry, Eversole said. “That is a very important part of how we do our company.”
The demand for energy is increasing and the industry must find the offer across the board to meet demand, Eversole added.
SGamma is concerned about the increasing demands on the electric grid with the growth of data centers, which use a lot of electricity and efforts to electrify transport and buildings. She said that many plants have been agreed that offer baseload power, such as natural gas, that can be switched off.
Will the industry drill, baby, drill?
But the interruption in the attempt to stimulate domestic oil and gas production can be the industry itself.
“You can have an administration that might clean up some bureaucracy, but at the same time you also have to change the mindset of these public companies that have listened to investors who say: ‘Hey, look, we want to concentrate on the return. We don’t want to take all that cash flow and put the right to the drill, “said Ryan Hill, main analyst Enverus Intelligence Research.
The Energy Analytics company sees most of the growth of domestic oil production taking place in the Perm van West -Texas and Zuidoost -New Mexico. The economy there is more favorable because of the lower break-even point of drilling costs.
“If you think about what the activity turns on, what extra growth is starting, you need higher oil prices,” Hill said. “If the administration is aimed at paying energy, having high oil prices and affordable energy are at odds with each other.”
The oil prices are around $ 74 per barrelsignificantly fall from more than $ 90 in 2022. The US Energy Information Administration expects Oil up to an average of $ 74 per barrel this year, 8% less than 2024, and falls to $ 66 per barrel in 2026.
In addition, Hill said, many of the most important oils in the country are “stelled or almost unpacked.”
“When it comes to the inventory of quality with oil in the lower 48, it is scarce,” Hill said.
Colorado is an important oil and gas producer and the Denver-Julesburg basin in the northeastern part of the state is the epicenter. Hill said that the pelvis is one of the most economic areas to drill, but the end of his life is approaching. There are less than five years of high -quality, economic inventory, he said.
A law from 2019 that has tightened many state oil and gas rules has created some headwind for industry in Colorado, Hill said. But he added that companies responded with “some of the most creative drills” to operate in the context that is intended to reduce the effects on communities and the environment.
Trump’s executive order when stimulating oil and gas production applies to federal or public ownership. Public grounds include that under the supervision of the Bureau of Land Management and the US Forest Service. The majority of public countries are in the West.
Companies can lease public country to drill. They pay royalties on the minerals of public property.
The US Energy and Information Agency said that the country has been the top oil producer in the world since 2018. The agency reported that in August 2024 the US generated an average of 13.4 million barrels per day, a record.
Eversole and Kait Schwartz, director of API Colorado, said that although the executive orders can increase oil and gas production on federal countries, they will not influence production in Colorado.
“We look forward to increasing the lease sale and hopefully to let go (liquid natural gas), but that does not change the regulatory framework that we have here in Colorado,” said Schwartz. “We will still have to operate under some of the strictest rules in the world.”
Eversole said that the industry is dedicated to not only serve the needs of customers “but to do it in a way that respects the community” and does not take shortcuts.
While the oil and gas industry encourages the possibility of streamlining the permit process in federal countries and to get rid of what they see as harsh mandates, said Michael Freeman, a lawyer at Earthjustice, that Trump’s executive order is not about it Lowering energy prices for consumers.
“It’s about filling the profit for Trump’s donors in the oil and gas industry,” Freeman said. “What they are going to do is bring federal oil and gas lease to stock and bring Trump to do things that will increase the demand for their product.”
Hamby of the Western priorities said the executive order focuses on fossil fuels. “I think the development of renewable energy is one of the paths that could take a country to the actual energy dominance for the future, for the clean energy economy that the rest of the world is about.”
The president’s order includes a step to eliminate goals to increase the number of electric vehicles on the roads. The fate of federal tax credits for renewable energy is also uncertain.
But Freeman believes that the public supports the preservation of public countries and animals in the wild and protects the environment. He said the results of the annual Colorado College State of the West Poll Have consistently shown strong, widespread support among Western voters for conservation.
“Voters generally do not want to see that our public lands are transferred to oil and gas companies, nor are they in favor of securing environmental protection that guarantee access to clean air and clean drinking water,” Freeman said.
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