New analysis from the Western Values Project reveals that in the Rocky Mountain West low oil and gas prices have taken a toll on state mineral development as well as the state budgets and services that depend on them. According to our new report, leasing of state-owned minerals in New Mexico, Colorado, Utah, and Wyoming collectively declined dramatically over the past decade. The report also found that, permitting of new wells fell thanks to historically low oil prices.
The declines reflect both the recent downturn in oil prices as well as a more sustained slump in natural gas prices. Last year, when oil prices averaged less than $50 a barrel, states in the Rocky Mountain West leased fewer acres and issued fewer drilling permits than in any year over the past decade. But gas prices have remained low for several years, and leasing and permitting on state lands have declined each year since 2011.
The decrease in state lands leasing and permitting is contributing to massive budget shortfalls in western states, where fossil fuel revenues are earmarked for public school and education funds:
Local officials and the broader public have been calling on western state governments to diversify their budgets revenues. By fostering alternative, more durable sources of income western states can help protect themselves from the boom-and-bust cycles of fossil fuel markets.