Budget Blues: Revenues From Fracking Plunge In Western States Like Colorado And Wyoming
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Budget Blues: Revenues From Fracking Plunge In Western States Like Colorado And Wyoming
WASHINGTON, DC, UNITED STATES – 2019/05/22: Gov. Michelle Lujan Grisham (D-NM) speaking at The … [] Center for American Progress CAP 2019 Ideas Conference. (Photo by Michael Brochstein/SOPA Images/LightRocket via Getty Images)
Western States With Big Budget Holes Will Bear The Brunt Of Biden Fracking Ban
With former Vice President Joe Biden apparently about to assume the presidency in a little over a month, speculation in the energy space has focused on his promise to ban hydraulic fracturing – or “fracking” – on federal lands and the negative impacts such a ban would likely have on the economies of states in the Intermountain West.
The immediate impacts from Biden’s ban could range from fairly minor to quite severe, depending on how it is structured. For example, the new president could decide to grandfather in all pre-existing federal leases and only apply a ban prospectively to new leases. But if it wants to play hardball, he could order his Interior Department to include the added “no fracking” condition of approval to every subsequent permit to drill issued even under pre-existing leases, thereby greatly enhancing the impact.
Regardless, it’s important to note that the economies in the oil producing states of the Intermountain West region have already taken a huge hit during 2020 due to the COVID-19 pandemic and the oil price bust it helped to produce. The Salt Lake City Tribune reported on Wednesday that “Nationally, payments to states for drilling on public lands and in U.S. waters were down by $630 million, or about 26%, in fiscal year 2020 compared to the previous year, revenue data released by the U.S. Department of Interior on Friday shows.”
Federal revenues coming into the states of Colorado, California, Montana, Utah and North Dakota all saw their revenues from federal oil and gas production decline by double digits. Wyoming, where overall oil and gas revenues account for more than 20% of the state’s budget, took a 30% hit, from $641 million in 2019 to just $457 million this year. Remember, that is just from production on federal lands, on which states share in half of federal royalty collections. All of these states will also suffer similar percentage reductions in tax collections from production on state, private and Indian lands that lie within their borders.
This reality will create massive holes in those state budgets that legislators must now work to find ways to close. With the economy in general remaining sluggish due to COVID impacts, that will be a very tough job.
The state taking the biggest hit to its federal revenues is New Mexico, which saw a decrease year-over-year of a whopping 40%, from $1.2 billion during 2019 to just $707 million in 2020. New Mexico’s state government has profited tremendously in recent years from the massive uptick in drilling in the prolific Delaware Basin, which runs beneath the southeastern portion of the state, in Lea and Eddy Counties. In 2019, oil and gas-related revenues funded about 40% of the state’s overall budget, other than Alaska the highest percentage of any state in the country.
The New Mexico legislature and Governor Michelle Lujan Grisham chose to go about earmarking much of that higher minerals revenue for new programs, including one created last year that would make the state the first in the country to offer free public college to its citizens.
But at the same time, Gov. Grisham fully endorsed Biden and his promised fracking ban, a policy paradox that she and the Democrat majorities in both houses of the legislature will now have to defend and find ways to reconcile. The irony here is that, just as the industry appears to have embarked on a slow but steady recovery over the past two months, a Biden fracking ban now threatens to again kill the goose that laid all the golden eggs for New Mexico’s policymakers.
It’s an unfortunate situation not just for the Governor and legislators, but for New Mexico’s citizens as well, since much of the burden of balancing the budget will now fall on their shoulders, as will the double whammy coming from the Biden fracking ban. But, as Fred Schneiderman, President and CEO of FBS Properties told me earlier this week, “New Mexico voted for the anti-fracking candidate, so it’s kind of hard to feel too sorry for them.”
It’s a valid point. Elections have consequences, as former President Barack Obama famously said shortly after his election in 2009, and one consequence of this election is that Western states already suffering big holes in their budgets will likely see the new administration make those holes even harder to fill in 2021.
From Energy in Perfectirishgifts
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Daily Bird: Fox Sparrow
Range: Alaska; continental US except for high plains and intermountain west
More information: here
Photo: https : // upload . wikimedia . org/wikipedia/commons/1/13/Passerella_iliaca-001.jpg
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Will you have a white Christmas? See the Almanac’s White Christmas Forecast for 2017! We’ll list the areas in the U.S. and Canada where snow is predicted—and where it’s not. For many folks, a blanket of white on Christmas Day is picture-postcard perfect. In areas that do not normally see snow, a little chill in the air is usually welcome to set the festive mood. Keep in mind that our long-range predictions for December are made many months in advance, but this should give you a general idea of what to expect! As we get nearer to the holidays, check your 7-day forecast for local weather. If you’re not familiar with our regions, here is a handy map: www.almanac.com/weather/longrange AREAS WHERE SNOW IS PREDICTED Good news for snow lovers! The mountainous ski areas of the continent are expected to feature above-normal snow fall during winter 2017–2018 • More snow is expected in the Intermountain and central Plains regions (including western Colorado, Utah, Idaho, and parts of Nevada). •The central and northern areas of New England should also get more snow (including Maine, Vermont, and much of New Hampshire). While we can’t promise snow on Christmas Day, we do expect snowy periods in mid-December and cold temperatures should mean the snow sticks! • The swatch of the U.S. from Tennessee Valley westward to New Mexico will feature snow this year. • The Upper Midwest (Minnesota, northern Michigan, eastern Dakotas) will experience snow showers and very cold temperatures. • In Alaska, snowy periods are expected during Christmas week. AREAS WHERE IT MIGHT SNOW • The High Plains (eastern part of Wyoming, Colorado, and Montana; western Dakotas and Nebraska) will feature snowy periods, turning bitterly cold. • The central Midwest region (Utah, Missouri, eastern Kansas and Nebraska) features rain and snow showers from the 16th to the 25th which is expected to turn to snow showers and more frigid temps through the rest of the week. • The Ohio Valley (southern Indiana and Ohio, Kentucky) will feature showers, then flurries from the 23rd to 31st. • The Appalachian region will be a mix of rain and snow in late December with mild temperatures. • In Texas-Oklahoma, it’s expected to be cool and rainy for Christmas, but then it may snow in the north (with rain in the south). • The Pacific Northwest will feature mild weather and showers, turning to snow at the end of the month. AREAS WHERE SNOW IS NOT PREDICTED • On the Atlantic coast (Boston to Virginia), the week of Christmas is expected to be rainy and mild. • The Southwest will be mild during Christmas week with rainy periods. • Florida will most certainly be sunny and warm. • The Lower Lakes (Illinois east to northern New York) will be rainy but turning to snow in late December. • The Deep South (Mississippi, Louisiana, Alabama, Tennessee, Arkansas) will be rainy and mild. • No snow is expected in the Desert Southwest (southern Arizona, most of New Mexico, Las Vegas). • The Pacific Southwest will be sunny and cool. • In Hawaii, no snow is expected. (Aren’t you surprised?) SNOW PREDICTIONS FOR CANADA • Southern Ontario will have a White Christmas with snowstorms and flurries. • The Prairies (Calgary to Winnipeg) will experience snow showers. • On the Atlantic, we expect a mix of rain and snow during Christmas week. • Southern Quebec will also bring a mix of snow and rain, shifting to snow by end of month. • Southern British Columbia will have snow showers inland, but rain on the coast until later in the month. Whatever happens, remember this: As the weather grows colder without, hearts should grow warmer within. –The 1910 Old Farmer’s Almanac
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flickr
The Mountains Are the Only Bucket List a Person Needs! (Chena River State Recreation Area) by Mark Stevens
Via Flickr:
Most definitely the sentiment I felt from the rocky outcroppings while walking the Angel Rocks Trail in the Chena River State Recreation Area. The views across this river valley with the ridgelines and peaks...they seemed to stretch on and on to a distant horizon. In order to help bring out that grandeur of this setting up in Alaska, I decided to angle my Nikon SLR camera slightly downward. I would be using some of the nearby outcropping and trees and then letting the layers of ridgelines across this setting slowly draw the eyes into the image. Angling my camera slightly downward would also raise the horizon and make the ridgelines and peaks seem bigger. I would still though include a portion of the blue skies and clouds above to fill in the rest or the upper portion of this image. The blue skies would also act as a color contrast to the yellows and greens of the forest below. For post-processing work, I made some initial adjustments with contrast, brightness, and saturation using different settings of DxO PhotoLab 2. I then exported a TIFF image to work with some filters in NIK Color Efex Pro 4. I experimented with a few to create a recipe (Polarization, Low Key, Foliage and Pro Contrast filters) that seemed to bring out this look that had some drama and that “extra” to the final image.
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