Energy-Rich States See Major Drop in Revenues from the Oil and Gas Industry

Energy-Rich States See Major Drop in Revenues from the Oil and Gas Industry

December 11, 2020

With likely incoming President Biden due to take office next month, the states that rely heavily on energy revenues are keeping a close eye on his first 100 days. The energy industry has already taken a huge hit during the Covid-19 pandemic, and a ban on fracking will hurt states even more.

According to Forbes:

Federal revenues coming into the states of Colorado, California, Montana, Utah and North Dakota all saw their revenues from federal oil and gas production decline by double digits. Wyoming, where overall oil and gas revenues account for more than 20% of the state’s budget, took a 30% hit, from $641 million in 2019 to just $457 million this year.

This is a reality for energy-rich states across the country. The loss of revenue will give state legislators a tough challenge going into 2021, and banning fracking in these states will make the task all the harder. Forbes reports it is likely these state budgets will continue to take a hit when the new administration comes into office.

Elections have consequences, as former President Barack Obama famously said shortly after his election in 2009, and one consequence of this election is that Western states already suffering big holes in their budgets will likely see the new administration make those holes even harder to fill in 2021.

States rely on the revenue the prosperous oil and gas industry brings in to fund infrastructure projects, education, and public welfare programs, among many other things. It would be a shame for Biden to further restrict fracking and hurt states who are already struggling. Unfortunately, it is doubtful that the left will take states’ budgets into account when coming up with their radical energy policies.