Washington Policies Will Hurt Montana's Communities

The past two years have dealt a blow to oil and gas production everywhere, including right here in Montana. Production levels declined significantly as the nation went into “COVID lockdown”, devastating oil and gas operators and the many Montana communities that rely on the industry for revenue and jobs.

Now, as one of Montana’s most critical industries begins its recovery, anti-development regulations proposed in Washington are threatening the future of oil and gas drilling across the country.

The announcement of a federal oil and gas-drilling moratorium, put in place so the Department of Interior could undertake an environmental review of the leasing program, has proved to be a significant challenge for Montana’s oil and gas sector. Montana joined 11 other states in suing the government over the leasing ban, which was quickly overturned by a federal judge.

However, questions remain as the Department of Interior not only appealed the ruling, but is also yet to release its review of the federal drilling and leasing program. It appears that a permanent federal leasing ban is still on the minds of federal officials, and therefore, still in play.

As the State Representative for Richland County—an integral part of the Bakken Oil Field discovery—I am concerned that any sort of federal leasing ban would disproportionately harm the local communities and economies in my district and beyond that rely on the oil and gas industry for tax revenue and jobs. Montana’s way of life is undoubtedly intertwined with the oil and gas industry, and if a leasing ban is imposed, our state will suffer.

In 2019, oil and gas production generated $6.3 billion to Montana’s economy. The industry supports 53,400 total jobs, or 7.7% of Montana’s total employment. Our communities benefit greatly from Montana’s General Fund Budget, which is partially funded by oil and gas revenues and provides money for education, infrastructure, and conservation efforts statewide.

Our oil and gas workers work in the field, often traveling across the border into North Dakota. Since reaching an all-time peak of more than 1.5 million barrels of daily production in November 2019, just months before COVID-19, North Dakota’s oil and gas production has been more or less stagnant since the beginning of the year, when a leasing moratorium was first enacted. Our neighbors have now seen their state fall behind New Mexico and Texas in terms of total oil production.

That spells bad news for Montana’s oil and gas workers who work both here at home and along North Dakota’s share of the Bakken Oil Field. If production levels are low, that translates to fewer jobs and less economic growth at a time when our recovery should be our priority.

Even more confusing, considering these potential economic consequences, Washington lawmakers are also seeking to raise corporate income taxes, which would not only hit Montana’s oil and gas sector hard, but other industries and small businesses as well.

A study by the U.S. Chamber of Commerce shows that if the corporate tax rate is increased, then 1.4 million small businesses—employing almost 13 million Americans—would pay a higher tax rate. This would only compound the difficult woes that Montana’s vital economic industries are already facing, not to mention harm the recovery of Main Street businesses.

While it is important to act swiftly and boldly to bolster our nation’s recovery, the proposals related to federal oil and gas leasing, as well as corporate taxes, are the wrong path for our country to take—the economic fallout to energy states like Montana would be too severe.

Representative Brandon Ler is a current Republican member of the Montana House of Representatives for District 35.