Public lands and energy news from the Center for Western Priorities
Look West: Public lands and energy news from the Center for Western Priorities
** Private equity is getting into oil and gas
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Thursday, August 10, 2023
BLM California oil and gas operation. Photo by John Ciccarelli, BLM California Flickr ([link removed])
Private equity investors appear to have found a new target: oil and gas companies operating on public land in the Western U.S.
According to a new report co-authored by Public Citizen and the Private Equity Stakeholder Project ([link removed]) , private-equity-backed companies hold approximately $380 million in unplugged oil and gas wells in four Western oil states: Colorado, New Mexico, Utah, and Wyoming.
Private equity generally refers to a group of investors that borrow large amounts of money in order to acquire other companies. The newly acquired company is then saddled with that accumulated debt ([link removed]) while the private equity firm repays itself and its investors using fees, shareholder payments, and debt restructuring, tactics that can mean big returns for the private equity fund’s investors. Private equity tends to focus on declining industries, and this profit-squeezing model can result in the acquired companies going bankrupt ([link removed]) .
Examples abound ([link removed]) when oil companies go bankrupt and leave orphaned wells to leak methane into the atmosphere while the costs of plugging them ultimately falls on taxpayers. “The overall point that we’re trying to make is that private equity’s involvement in Western oil drilling adds a layer of uncertainty because these companies turn over,” said ([link removed]) Alan Zibel, a research director at Public Citizen. “They get in and they get out very quickly. So it really starts this chain of selling these companies to more and more potentially irresponsible actors.”
Rather than plug their low-performing assets, companies often sell them to less financially solvent operators. A 2019 Government Accountability Office report found that 99 percent of federal oil and gas leases have financial assurance bonds that would be unable to pay for the full cost of cleanup ([link removed]) . The Bureau of Land Management proposed a rule In July ([link removed]) that would substantially increase the bonds for federal oil and gas operators to cover the cost of cleaning up wells.
** Quick hits
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Report: Private equity is getting into oil and gas
High Country News ([link removed]) | Public Citizen ([link removed])
Advocates push feds to curb alfalfa exports to save Colorado River water
E&E News ([link removed])
After decades, the Chumash Tribe's vision for a new marine sanctuary could be coming true
NPR ([link removed])
Wyoming delays approval of lease sale due to pronghorn migration concerns
WyoFile ([link removed])
Plan for a magnesium Superfund site relies on the disappearing Great Salt Lake
Salt Lake Tribune ([link removed])
Happy trails? Lessons on outdoor recreation from Wyoming's Curt Gowdy State Park
WyoFile ([link removed])
Colorado lawmaker introduces bill to increase federal firefighters' pay
The Hill ([link removed])
Editorial: Biden proves to be an able guardian of America's land and economy
Las Vegas Sun ([link removed])
** Quote of the day
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” In just one day, Biden took meaningful action to protect access to clean drinking water, promote a more sustainable environment, preserve cultural history, recognize Indigenous rights, restore our beloved national parks, and support a thriving economy.”
—Las Vegas Sun Editorial Board ([link removed])
** Picture This
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@BLMFire ([link removed])
Happy 79th Birthday @SmokeyBear ([link removed]) and super cute baby picture to celebrate your day! The best #HappyBirthdaySmokey ([link removed]) present we can give is following his motto, “#OnlyYou ([link removed]) can prevent wildfires!"
It takes all of us doing our part to #RecreateResponsibly ([link removed]) while enjoying #publiclands ([link removed]) !
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