It is worth noting that the federal land managers have been maintaining their pace roughly so as to approve permits to drill since the government funding ran out on 30 September; however, the industry officials worry that the delays could as well begin to pile up if the shutdown drags much longer.
Apparently, the US Interior Department went ahead and issued 132 permits, thereby approving oil and gas wells located on the federal lands in the first eight days of the shutdown, out of which six were weekdays, as per an online database that was accessed on October 9. That happens to be roughly on track with the 124 drilling permits that were issued in the six weekdays before the shutdown; however, it is about 17% less as compared to the permitting pace the agency had achieved over the first six complete months of the second term of President Donald Trump.
The US administration remarked ahead of the shutdown that its ultimate objective was to minimize the disruptions caused to the industries it goes on to see as key to its energy dominance agenda, while at the same time following the directive by Trump to target the Democrat things so as to create pressure when it comes to funding the government. Since the time the shutdown began, the administration has gone on to hold up $18bn in transportation funding within New York and has also cancelled $7.5bn when it comes to energy projects primarily across the states that are represented by Democrats within the US Senate. As per the Interior’s shutdown plan, it has gone on to halt all work when it comes to offshore wind projects.
The Interior Department, when asked for comment pertaining to oil and gas permission, opined that it was following a shutdown plan as per which it said it may use the carryover funds and expected the staff to continue working on energy permitting as well as other high-priority projects. The agency has gone on to retain the 105 employees at the US Bureau of Ocean Energy Management in order to work on certain time-sensitive work like an expanded offshore leasing plan as well as a 10 December offshore sale of lease.
According to Doug Burgum, the US interior secretary, in spite of the best efforts of the Democrats to sabotage the American energy dominance agenda by Trump, Interior is not going to allow this shutdown to interfere with the American energy production.
As per the oil industry officials, they have not seen a major slowdown when it comes to permitting on federal land; however, they do worry that an extended shutdown could strain agencies as well as risk stalled development.
Apparently, in 2024, oil producers on federal as well as tribal land went on to produce an average of 3.7 mn b/d of crude, which is equivalent to 28% of US oil production.
Anne Bradbury, the chief executive of the American Exploration & Production Council, said the Interior Department does deserve the credit for putting in place a plan that has gone on to maintain oil and gas permission for operating on the federal land. Even so, she opined that the industry trade group goes on to believe that the Congress should quickly end this shutdown and at the same time avoid the potential risk for the domestic energy production along with costs to the American consumers.
It is well to be noted that the Congress appears to be making some progress when it comes to negotiating an end to this shutdown, which, by the way, has focused in parts on tax credits that are related to healthcare. The fact is that Trump has refused to negotiate while at the same time also threatening deep cuts to the Democratic priorities.
According to Trump, it is early; however, it gets a little bit worse as things go along, and they will be making cuts that are going to be permanent, and they are only going to cut the Democrat programs.
Most federal agencies started to furlough the workers on the first day of the shutdown; however, there were others who have tapped carryover funds in order to remain open. The US Energy Information Administration has remarked that it will be able to function for a period of time at the time of shutdown, and, so far, it has gone on to maintain normal operations.
Notably, the US Environmental Protection Agency—EPA did maintain some operations; however, this week it began implementing a plan as per which 90% of employees are going to be furloughed, as per a group that represents former employees.
