Page 12 - NorthAmOil Week 36

NorthAmOil COMMENTARY NorthAmOil

Biden has said he
would seek to ban
new drilling on federal
land, but would allow
fracking to continue.

to consultancy Rystad Energy. Permits for wells oppose a fracking ban.
on state and private land in the state are reported In March, Biden caused confusion during the
to have decreased, meanwhile, despite the simi- Democratic debate by saying he would not sup-
lar geology of the land in question. port “new fracking”, but his team later claimed
Matador and EOG are estimated to have that those comments referred to his plan to end
been two of the most aggressive shale drillers new drilling on federal land.
in acquiring federal permits in New Mexico. Biden’s climate plan is not as bold as the pro-
According to EOG’s latest earnings call, it has posals put forward by some of the other Dem-
2,500 permits on federal land across four states ocratic challengers earlier in the race for the
that have either been approved already or were party’s nomination. Nonetheless, it is still the
in progress as of early August. EOG’s chief oper- most ambitious climate plan ever put forward
ating officer, Billy Helms, said this amounted to by a presidential nominee, and includes a goal to
more than four years of inventory. reach net zero greenhouse gas (GHG) emissions
Rystad estimates that EOG’s permits in New by 2050.
Mexico’s Eddy and Lea counties – the epicentre
of Permian drilling in te state – are up 49% so far What next?
this year compared with the whole of 2019. Even if Biden does win the presidency there
Matador, for its part, anticipates having 300 is no guarantee that he would succeed in ban- Even if Biden
federal permits by late 2020. In Eddy and Lea ning new federal permitting, as the move would
counties, its new federal permits are up by 149% likely receive substantial pushback in Congress, does win the
so far this year compared with all of 2019. especially from representatives of major oil- and presidency
“We think the chances of them saying you gas-producing states. If such a ban is enacted,
can’t drill on your leasehold are fairly slim,” Mat- though, New Mexico would be the worst there is no
ador’s CEO, Joseph Foran, said on the company’s affected, followed by Wyoming and Colorado,
earnings call in late July. where 37% and 11% of production respectively guarantee that he
Federal permits cover a period of two years comes from federal acreage.
and can currently be extended for another two, In late 2019, Bloomberg Intelligence analysts would succeed
but some producers have raised the possibility suggested that a ban on new drilling on federal in banning
that this could change in the future. land would put pressure on Permian producers,
including EOG, as well as WPX Energy and new federal
No fracking ban Concho Resources.
This comes as Biden has provided assurances New Mexico Governor Michelle Lujan permitting.
that he would not seek to ban the use of hydraulic Grisham, a Democrat, has said she would ask
fracturing if he wins the election. His comments for a waiver exempting the state from any future
came in response to allegations by Trump that drilling bans. How successful such a move would
Biden would indeed seek to ban the practice. be remains to be seen, but there is little doubt
Biden made the assurances during a speech that industry bodies and certain states would
in the swing state of Pennsylvania, which is a push hard to be able to continue drilling on fed-
leading shale gas producer and would strongly eral land if a ban is brought in.™

P12 www. NEWSBASE .com Week 36 10•September•2020