Political mandated shortages.
Wyoming has a long history in the oil and coal business.
And when the shutdowns happened in 2020-21 they capped their last well joining Venezuela when outside companies withdrew from that country pretty much cancelling all production impacting what has now been recognized as a supply side shortage of energy.
Who would've thunk it? Not green climate changers for sure, diving energy prices though the ceiling.
They hate the industry and the term hate is no misprint.
"The oil industry has been a part of the Wyoming economy since the beginning days of statehood. As far back as the early 19th century explorers in what is now Wyoming reported evidence of oil. In 1832, when fur trader Capt. B. L. E. Bonneville traveled to the Wind River Valley, he found oil springs southeast of present Lander near Dallas Dome, where the state’s first oil well would be drilled five decades later.
"Oil trapped under a layer of impermeable shale. Wyoming Tales and Trails.During the fur trade and Overland trails periods, travelers commented on “oil springs” where oil bubbled to the surface of water pools. For centuries, native people seined off the oil, using the greasy residues for war paint, decoration on hides and teepees, horse and human liniments and other medications. An oil spring near Hilliard in present Uinta County was well known when Fort Bridger was established nearby in 1842.
"The first recorded oil sale in Wyoming occurred along the Oregon Trail when, in 1863, enterprising entrepreneurs sold oil as a lubricant to wagon-train travelers. The oil came from Oil Mountain Springs some 20 miles west of present-day Casper.
Wyoming was also cited in the 1920s for the infamous Teapot dome Scandal.
"In the early 1920s, what became known as the Teapot Dome scandal, named for an oil field near Salt Creek, broke on the national scene. It was the most serious government-corruption scandal prior to the Watergate affair of the 1970s. The Teapot Dome field was owned by the U.S. Navy as a reserve fuel supply for its ships.
"Albert Fall, a former U.S. senator from New Mexico by then secretary of Interior for the Warren G. Harding administration, was eventually convicted of accepting bribes from oilmen for allowing them to drill illegally in the reserve. Fall was sent to federal prison; the oilmen were acquitted of making the bribes, but one of them, Harry Sinclair—the same Harry Sinclair who later bought Parco and named it for himself—served time on other related federal charges."
Here is a paragraph that if it sounds a lot like today you might further appreciate some history.
"When Thomas Edison invented the first practical incandescent light bulb in 1879, observers believed Rockefeller’s oil business would wither and die. But despite the seeming ruinous competition from electric lighting, Rockefeller persevered. In 1883, he and his partners expanded combined operations across several states into the Standard Oil Trust. "
Roughnecks after capping an oil well in the Salt Creek field, 1920s. American Heritage Center, University of Wyoming.
Meanwhile, the news today is this:
"The Bureau of Land Management’s state office in Wyoming will offer some 179,000 acres across 195 parcels in an oil and gas lease sale in the first quarter of 2022.
“We held a scoping period to solicit input on 459 parcels initially proposed for the deferred BLM Wyoming March and June 2021 oil and gas lease sales. Based on that input and our subsequent environmental review, we have decided to carry forward 195 of those proposed parcels,” BLM’s Wyoming office said.
"The announcement of the lease sale marked the start of a 30-day period for comments on the lease sale’s environmental assessment that the state office of the BLM will review.
“The BLM meticulously reviews the proposed parcels to determine that leasing each of them will conform to all applicable policies and land use plans,” the authority said. “All parcels will include appropriate protections and stipulations, such as seasonal timing limitations and controlled surface use to protect sage-grouse habitat and other important natural resources.”
"Wyoming was the eighth-largest oil-producing state in the U.S. last year, pumping over 89 million barrels of crude. It was also the ninth-largest gas producer in the country, pumping over 1.47 billion cu ft of gas.
"Like all other oil-producing states, Wyoming suffered the effects of the pandemic directly, with drilling activity almost stopping completely last year. This year, however, it has stepped on the path of recovery. For the second week of October, local media reported there were 18 drilling rigs in the state, up from just 1 a year earlier.
"The outlook is also bright because of current oil and gas prices. Wyoming oil and gas companies are hiring again, and some are considering reviving shelved projects. However, challenges remain, according to industry insiders. Among them is the Biden administration’s review of federal lease sales procedures that has made oil and gas drillers cautious and could affect the results of next year’s tender."
For those who claim Biden's position will not have an immediate impact on oil prices we beg to differ. There's something called discounting the future not to mention confidence or the lack thereof.
Confidence is a leading not a lagging indicator despite what many believe.
We will see if Biden wants to create jobs here and not overseas in this vital industry going into what could be a devastating winter.
***