ODESSA, Texas — President Biden announced on Friday that drilling leases on federal land will be allowed. This is the signal of a major shift from the beginning of his presidency.
"First of all, it's a long time coming and so we'll give the administration some credit for at least holding a lease sale," said Dan Naatz, Executive Vice President of the Independent Petroleum Association of America. "But, if you look back all the way back to candidate Biden, he said that he would stop leasing on federal lands and he did that the first day in office, and there hasn't had any since they came into office."
The change means that companies can pay to drill on federal land, but that doesn't come without a few caveats.
"It's very reduced, they reduced it down to 20% of the available acreage, an 80% reduction, and are going to increase royalties by 50%," said Naatz.
This is a step forward for more oil production, but it's not an instant fix.
"This is just the leasing, then our members are going to have to go out and do all the environmental work, find employees to drill pipe, the supply chain issues," said Naatz.
The IPAA believes more changes need to be made to see an actual shift.
"The regulatory regime, not only on federal lands, but across the board, needs to be streamlined," said Naatz. "The amount of regulations that our members face again in Texas, non-federal lands across the board, it's so extreme that it really serves to hamper our members' ability to get out there."
Supply chain issues have also caused the industry not to be as efficient as it could be.
"Our members are still having a very difficult time finding steel, finding pipe casing, finding spare parts for trucks," said Naatz. "Look, there are some real solutions, some of which I laid out there that can make a real difference, but it's taken a while to get into this spot and it's not going to change overnight unfortunately."
Even though things like gas prices won't immediately shift here in the states, one thing that won't change is the Permian Basin being one of the energy workhorses for the rest of the country.
"We have the resources, we have the ability to be a super power in American oil and natural gas," said Naatz. "We want to get back to that, we again believe if you allow our industry, working again in conjunction with the government, you can really address these issues and move forward and protect the environment and also help the world as it's facing this energy crisis due to the Russian invasion of Ukraine."