What If … Energy Production Was Banned on Federal Lands & Waters? | U.S. Chamber of Commerce
Aug 26, 2016 - 10:45am

What If … Energy Production Was Banned on Federal Lands & Waters?


Senior Vice President, U.S. Chamber Global Energy Institute

It’s an interesting question. That we’re even entertaining it, however, shows you how far off the rails candidates from Secretary Clinton, to interest groups, to the Democratic Party Platform have gone in proposing to ban energy production on federal lands in one way, shape, or form. It’s easy to spout rhetoric to rally the troops in a campaign season, yet shouldn’t politicians be answerable for the promises they make? We think so.

This week the Institute for 21st Century Energy launched the Energy Accountability Series, designed to do exactly that…hold politicians and interest groups accountable for their proposals. 

In this first report, we answer the question: What If Energy Production Was Banned on Federal Lands & Waters?  In short, the answer is that America’s economy would lose nearly 400,000 jobs and $70 billion in annual GDP. Considering that we get about 25% of our energy from federal lands, it’s a wonder these numbers aren’t higher.  But if you live in a state with lots of federal energy production, the impacts could be devastating. 

Take Colorado. It could lose 50,000 jobs and over $120 million in annual royalties, nearly half of which is ear-marked for state education. 

Wyoming? It would kiss $9.3 billion in economic output goodbye. 

And New Mexico could see almost $500 million in royalties and over 24,000 jobs vanish.

Since states cannot readily borrow the way the federal government can and they also must balance their budgets UNLIKE the federal government, the lost income from a ban would hit especially hard on critical state services like education, roads, and first-responders.

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That’s just for onshore.

Turning our attention to offshore federal production, the impacts of a federal energy ban in the Gulf of Mexico would be even more painful.  Oil production from the federal Gulf accounts for just under 20% of total domestic production.  Shutting off that spigot would put the country on the wrong track, with less energy security and more job losses. 

The Gulf States of Texas, Louisiana, Mississippi, and Alabama stand to lose over 110,000 jobs and $24 billion in lost GDP. 

Moreover, a federal law called the Gulf of Mexico Energy Security Act requires the federal government to share a portion of the royalties it collects with the adjacent states that “host” the energy production.  While this has been happening on a small scale since 2009, next year it’s scheduled to skyrocket to as much as $350 million annually.  That’s a huge chunk of change those states are legally and rightfully entitled to, but they won’t see a dime of it if energy production is banned.

Federal energy production is too crucial to America’s energy security and economic health. Politicians who support banning it should have to explain why.

Unfortunately that has yet to happen, but our new report will ensure that Americans understand the very real consequences of such backward-looking policies.

Editor's note: This originally appeared on The Institute for 21st Century Energy's blog.

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About the Author

About the Author

Christopher Guith headshot
Senior Vice President, U.S. Chamber Global Energy Institute

Christopher Guith leads the development of the Energy Institute’s policies and messaging relating to oil and natural gas and nuclear energy.