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North Dakota: Oil and gas moratorium costing state billions

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Posted at 7:10 AM, Aug 06, 2021
and last updated 2021-08-06 09:10:47-04

The Biden Administration's moratorium on new oil and gas leases on federal land, enacted some eight months ago, has already cost the state of North Dakota billions of dollars, according to state data.

That estimate comes from the North Dakota Department of Mineral Resources following a detailed analysis of the moratorium's impact on the state's oil and gas sector.

Mineral Resources Director Lynn Helms said when the March and June lease sales were canceled, as much as $86 million in potential royalties dried up. Looking long term, Helms estimates the lost value runs into the billions.

"We have 236 tracts, fully vetted and evaluated, just waiting for an auction schedule," said Helms. "That amounts to more than 1,000 wells and $4.8 billion of future value to the state of North Dakota."

During his first week in office, Biden signed an executive order suspending all new oil and gas lease sales on public lands and waters. Then in March, the Interior Department launched a comprehensive review of the federal leasing program, promising an interim report this summer.

North Dakota officials are not waiting for that report. Last month, North Dakota Attorney General Wayne Stenehjem filed suit against U.S. Interior Secretary Debra Haaland over the canceled lease sales.

The state's lawsuit, filed in the Western Division of U.S. District Court, asks the court to compel the Interior Department to resume the lease sales. Also named in the suit is the Bureau of Land Management, BLM Director Nada Culver, and Director of the Montana-Dakotas BLM John Mehlhoff.

According to the Mineral Resources Department, 811 tracts have been nominated for pending lease sales across the state of North Dakota.

"We're asking the federal court to compel them to restart quaterly lease sales," said Helms. "To give them a deadline. By this date, you must start holding lease sales again. We are looking forward to our day in court."

North Dakota's lawsuit claims that the federal government’s moratorium on new oil and gas leases has blocked the development of more state and private mineral interests than federal interests. In the suit, Stenehjem alleges that the moratorium has adversely affected his state’s ability to efficiently regulate safe and environmentally sound development of its natural resources.

If successful, the suit would prohibit the federal defendants from canceling quarterly lease sales and block Haaland from implementing a moratorium on federal lease sales.

As yet, no court date has been set for the North Dakota case.

The controversial oil and gas lease moratorium came up for discussion at an Interior Department budget hearing on Capitol Hill last week. Under questioning from Senate Energy Committee Chairman Sen. Joe Manchin, Haaland would not commit to a specific timeline for her agency's review of the federal leasing program. Haaland did say that the review is being finalized internally and should be out very soon.