The government shutdown is now old news. But it’s still interesting to consider how it may have effected the Texas and U.S. oil and gas industry.
There are plenty of agencies that effect the oil and gas industry, which is heavily regulated by the federal government. One agency that is actually quite useful is the Energy Information Administration, which does a great job of collecting data. Their website is informative and useful for the industry. Unfortunately, during the shutdown, the EIA furloughed its employees and stopped reporting data.
That temporary loss of the EIA may have been the only meaningful casualty of the shutdown, however. During the shutdown, the Bureau of Safety and Environmental Enforcement was tasked with providing any necessary storm updates for the Gulf of Mexico as it would impact the energy industry. This agency, part of the U.S. Department of the Interior, continued to issue drilling permits for offshore drilling and continued their inspection process for offshore oil and gas operations.
The Bureau of Land Management, also part of the Department of the Interior, shut down most of its processing of applications for onshore drilling. The BLM continued inspections of coal, gas and other mining activities and continued its Alaska pipeline operations. The Bureau of Ocean Energy Management, also a Department of the Interior agency, ceased almost all of its activities, which include leasing and economic analysis.
A Good Side to the Shutdown?
With the exception of the EIA, some of agencies are of questionable utility and sometimes impede productive activities and get in the way more than they help. For example, during the shutdown, the drilling permit process for onshore drilling was tied up. But in reality, even when the government is “working,” the pace of the processing of permits for drilling on federal land is usually unbelievably slow. Considering this “working” pace, the industry didn’t notice much of a change during the shutdown. Luckily for consumers, only a fraction of the oil and gas production in the U.S. is on federal land.
In Texas, a large portion of the drilling of crude oil and gas wells occurs on private land, so the shutdown had no real effect at all, and the activities of Texas oil and gas companies were not impacted much. Even in the case of onshore drilling requiring federal permits, the drilling operations numbers were steady, and would have probably continued to be steady however long the shutdown had lasted.
The shutdown is over, But I find it interesting to ask just what real value is added by these agencies. As the shutdown illustrated, there may be a few that we would be better off without.
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