Fact-check representative Kevin Brady’s claim that Biden’s ban on new oil rentals will kill 120,000 jobs in Texas

U.S. Representative Kevin Brady, R-Texas, in anticipation of Biden’s move, expressed his dismay at how a moratorium on hiring would affect jobs in the Texas oil and gas sector.

“Kill more jobs in Texas,” Brady said in a Jan. 22 tweet. “After #KeystoneXL pipeline was killed, #Biden ceases new oil / gas leasing on lined lands / water. If it is permanent, 120,000 TX jobs will be lost. 120,000 MORE unemployed. Pssst … you are not supposed to CREATE jobs not?”

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The move by Biden will have an exorbitant effect on states with large parts of federal lands used for oil and gas activities. New Mexico, for example, has 24 million acres of federal land, or about 32% of the state’s total land mass; Wyoming has 29 million acres in federal ownership, or about 47% of the state.

Texas, on the other hand, has very little state-owned land – 3 million acres, or 2% of the state. Nearly half of it is run by the U.S. National Park Service. As of 2019, approximately 185,000 acres were leased for oil and gas production in Texas.

Although most of the oil and gas industry in Texas is land-based, a portion of the industry is actively drilling into federal waters in the Gulf of Mexico. According to Jan. 22, there were 16 foreign craft in the Gulf compared to 175 on Texas soil, according to Baker Hughes’ counter. (In February last year, before the coronavirus pandemic hit the world oil industry hard, about 20 installations were deployed in the Gulf, compared to about 400 ashore in Texas.)

With such a small fraction of the state industry likely to be affected by Biden’s commission, is Brady correct when he says that 120,000 jobs in Texas are at stake?

New versus existing rental

According to Brady’s assistants, the number he mentioned came from a study released last year by the American Petroleum Institute, a trade and lobbying group in the industry. The study estimated that a ban on new and existing leases by 2022 would cost nearly 1 million jobs, with top production states being hit the hardest. While Texas would lose 120,000 jobs, New Mexico would lose 62,000 and Wyoming 33,000, the study said.

But the moratorium on federal land leasing from the Biden administration only stops new leases from being issued.

Brady’s tweet misses this distinction. He said the ban on new leases would cost Texas 120,000 jobs, while the study he cited involved losses related to the ban on both new and existing leases.

The Petroleum Institute has not released estimates on how many positions will be affected by Biden’s order. Another group, the Wyoming Energy Authority, released a study last month stating that a ban on new leases alone would have an impact on 58,700 jobs in the eight states that make up the bulk of public land production, which does not include Texas.

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However, a spokesman for the U.S. Petroleum Institute said it was reasonable to expect the government to extend the ban to include existing leases.

“We see this as a first step towards a federal rental ban that will affect all oil and gas development on federal lands and water,” said Bethany Aronhalt, spokeswoman.

This expectation is based on numerous remarks made by the President on the issue. During a primary debate in 2020, for example, Biden said, “No more drilling in federal lands. No more drilling, not even abroad. No oil capacity can continue to drill, it ends.” Aaronhalt stressed how Biden’s nominated candidate for interior secretary, environmentalist and progressive Deb Haaland of New Mexico was unequivocally in her opposition to leasing federal lands and waters to the industry.

“I am wholeheartedly against breaking and drilling in public lands,” she told The Guardian in 2019. “Public countries are a statement about who we are as Americans. The most pristine and beautiful places in our country should never belong to one person. ‘

Golf work

If Biden bans all federal leases – new and existing, on land and abroad – could Texas lose 120,000 jobs by 2022?

“The bulk of the Texas impact is due to the closure of the Gulf of Mexico development, for offshore drilling,” said Geoff Brand, senior economic adviser at the American Petroleum Institute.

Drilling in the Gulf of Mexico supports about 300,000 jobs, according to an estimate by the Bureau of Ocean Energy Management. This figure represents both jobs created directly by the industry – such as offshore drilling, platform construction and platform personnel – and jobs indirectly created by the industry, such as service enterprises and other rural support activities. In economic terms, the figure represents 300,000 jobs created by the direct, indirect and induced economic impact of the industry.

The staff members are primarily from Texas and Louisiana, each contributing about 150,000 workers to the foreign industry, Brand said. The projected 120,000 jobs in Texas lost due to a possible ban on new and existing federal leases will affect about 80% of the foreign workforce in Texas.

Brandon says this figure is so high because most jobs are created when the industry spends capital in advance on drilling new boreholes and building new platforms. A complete ban on new leases or permits will halt development.

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“If you stop drilling and expanding, you are just maintaining production platforms,” ​​Brand said. “It’s like building a pipeline – you get the most jobs when you spend the capital and build things. It’s when you spend the money that jobs are created. … If you maintain a platform, you have to “You spend some operating money, but you do not really spend that much.”