The Trump administration will keep oil and gas permitting moving unhindered, despite the federal government shutdown that began on Wednesday, while approvals for renewable energy projects will halt, according to Interior Department plans seen by industry media.
Staff at the Bureau of Land Management, which oversees 245 million acres of public land, have been exempted from furloughs to continue processing leases and drilling permits. The Bureau of Ocean Energy Management (BOEM) said it will use carryover funds to maintain work on “priority conventional energy projects,” including offshore drilling in the Gulf of Mexico and Alaska, even as more than 70% of its staff are furloughed. Dozens of oil and gas lease auctions remain on schedule.
Renewable projects will not receive the same protection. BOEM confirmed that offshore wind and other non-fossil approvals will pause until government funding is restored. The approach follows President Donald Trump’s earlier declaration of a national energy emergency, which gave the Department of Interior discretion to sustain fossil fuel development during a shutdown, according to transportation industry source TTNews.
The shutdown, which began October 1, has left hundreds of thousands of federal employees on furlough, and the energy sector could be impacted from the loss of regular government data releases. A prolonged shutdown could disrupt statistics essential for oil and gas trading, with delayed reports on inventories, production, and exports reducing transparency and adding volatility to markets.
Trump made similar choices during the 2018-2019 shutdown, the most significant of shutdowns, as it lasted for 35 days. During this time, Trump ensured that drilling permits were processed. By contrast, Barack Obama’s administration suspended auctions and halted drilling approvals during the 2013 shutdown.
By Charles Kennedy for Oilprice.com
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