Speaker 1: Hey there, I'm Kyle Trigstad, Politics editor for Bloomberg Government,
Speaker 1: and I'm Greg Durou, Senior Elections reporter for Bloomberg Government.
Speaker 1: Check out our podcast, down Ballot Counts. Each week, Greg
Speaker 1: and I will be breaking down all of those down
Speaker 1: ballot elections that make up the fight for the US Congress.
Speaker 1: Listen and subscribe to Downballot Counts from Bloomberg Government wherever
Speaker 1: you get your podcasts. Oil prices are super low, so
Speaker 1: who still wants to drill for oil? Today? I'm Parts Rebellion.
Speaker 1: We hear about the folks who are not only willing
Speaker 1: but eager to put a big straw on the ground
Speaker 1: and start sucking. And listener, let me tell you these
Speaker 1: are some odd folks. Hello, and welcome back yet again
Speaker 1: to Parts Pervilion, the environmental podcast from Bloomberg Law. I'm
Speaker 1: your host, David Schultz. So, in my mind, the biggest
Speaker 1: environmental story of this year so far was the post
Speaker 1: pandemic price collapse in the global energy market. Now you
Speaker 1: can make an argument that the biggest story was actually wildfires,
Speaker 1: and honestly, you might be right, But for me, low
Speaker 1: energy price has just affected so many other things, many
Speaker 1: of which we've already talked about on this very podcast.
Speaker 1: I just feel like it's been a theme that's run
Speaker 1: through nearly every news story I've seen lately. So imagine
Speaker 1: my surprise when I opened up Bloomberg Law and saw
Speaker 1: a story about how the amount of federal land in
Speaker 1: Nevada that's been opened up for oil drilling has been skyrocketing.
Speaker 1: And to make the story stranger, Nevada is not known
Speaker 1: for having a lot of oil. So who are these
Speaker 1: people who were eager to drill for oil in a
Speaker 1: place that may not have oil at a time when
Speaker 1: oil prices are super low. Well, they're called wildcatters, and
Speaker 1: they are an interesting group of folks. Bloomberg Laws Bobby
Speaker 1: McGill wrote that story about drilling in Nevada, and he
Speaker 1: talked about why they're doing what they're doing and what
Speaker 1: the environmental consequences of this might be. But first Bobby
Speaker 1: explained to us exactly what wildcatting actually is. So basically,
Speaker 1: wildcatting is exploring for oil in areas where oil is
Speaker 1: not proven to exist. So, you know, wildcatting is essential
Speaker 1: to oil exploration because you find new oil reserves, new
Speaker 1: oil deposits by wildcatting, and sometimes someone who's who's exploring
Speaker 1: for oil and unproven areas. You know, they may be
Speaker 1: wasting their money. They may not they may not know
Speaker 1: anything's there and they may not find anything. But other
Speaker 1: times they might find something big and strike it rich. Yeah,
Speaker 1: high risk, high reward. It sounds like I was really
Speaker 1: surprised by your story because, you know, one thing that
Speaker 1: we've talked about a lot in this podcast over the
Speaker 1: course of the year is how low energy prices are
Speaker 1: and how low fossil fuel prices are after or as
Speaker 1: a result of the pandemic. But your story makes it
Speaker 1: seem like, you know, these federal government leases that allow
Speaker 1: people to explore for oil on federal lands are being
Speaker 1: snatched up really fast. What's going on there? Why is
Speaker 1: the demand for these leases still be pretty healthy. Well,
Speaker 1: first of all, it's it's important to put this into context.
Speaker 1: You know, leasing sort of peaked a number of years ago.
Speaker 1: I mean at the end of the Bush administration, there
Speaker 1: was a lot more leasing in Nevada going on than
Speaker 1: there is today. But it's it's still going on. I
Speaker 1: mean a lot of acreage has has has been leased
Speaker 1: in Nevada. You know, during the Trump administration, and also
Speaker 1: you know, in the years prior to that, but it's
Speaker 1: it's sort of declined a bit. But the thing is,
Speaker 1: the thing to remember is that leasing is still going
Speaker 1: on right now because lease holders have the right to
Speaker 1: drill those federal leases for ten years, and so if
Speaker 1: they can start to develop that lease prior to the
Speaker 1: you know, ten year expiration, they can they can still
Speaker 1: make a profit because the you know, oil prices can
Speaker 1: can increase again, and you know, who knows five years
Speaker 1: from now oil to be one hundred dollars a barrel,
Speaker 1: And that's that makes sense. And actually I was going
Speaker 1: to say that it sounds like they're you know, hoping
Speaker 1: that oil prices get back to normal, but then I realized,
Speaker 1: I don't think there really is a normal for oil prices,
Speaker 1: Like there's no so volatile and it's changed so much
Speaker 1: over like forty years that what even is normal for
Speaker 1: this kind of thing. But that's what they're they're banking
Speaker 1: on the oil prices will recover, I guess, to what
Speaker 1: they used to be. It's it's possible, I mean, and
Speaker 1: they don't really even have to recover that much. You know,
Speaker 1: some of the some of the wildcatters I talked to
Speaker 1: are not I mean, these are not big companies necessarily.
Speaker 1: Who are you know, as they say, poking around in Nevada?
Speaker 1: These are these are small time oil developers who are
Speaker 1: drilling a few wells and and they want to make
Speaker 1: a little bit of money. I focused on Nevada because
Speaker 1: this is this is a state that doesn't have a
Speaker 1: lot of oil production at all. It's next to New
Speaker 1: York in volume of oil produced, and which is not much.
Speaker 1: It's almost it's very close to zero. So so let's
Speaker 1: let's talk about some of these people who think that,
Speaker 1: you know, Nevada will become the next Texas or the
Speaker 1: next Oklahoma. You talk to a few of them, They're
Speaker 1: an interesting bunch. One person claimed that he had an
Speaker 1: MRI in the sky that can help him find oil
Speaker 1: and Nevada. The other one described herself as a oil
Speaker 1: driller slash poet. Who are these people who are you
Speaker 1: know looking for oil in Nevada? Well, you know, it's
Speaker 1: it's a variety of folks. I mean, there are several
Speaker 1: who who have done this for a long time. Who
Speaker 1: are these people who you know, have the have the
Speaker 1: wherewithal and the money to go and drill a few
Speaker 1: wells and produce a little bit of oil and make
Speaker 1: make a little bit of money. Some are a bit
Speaker 1: more optimistic, and they have you know, they they have
Speaker 1: unproven technology. And part of this is that back in
Speaker 1: the eighties, Nevada actually had an oil well that produced
Speaker 1: more oil than any other onshore oil well in the country.
Speaker 1: But the thing is that the geology of Nevada is
Speaker 1: really complicated, and the thinking is that you know, these
Speaker 1: high producing wells, the few that there are or have been,
Speaker 1: are really just tapping like these really small pockets of
Speaker 1: oil and they produce for a little while and then
Speaker 1: they dry up. And so this guy with the MRI
Speaker 1: and the sky it's a satellite technology. He claims to
Speaker 1: have found lots and lots of oil there, and but
Speaker 1: you know that hasn't been corroborated by anybody else. It's
Speaker 1: it's proprietary technology with proprietary data. You just have to
Speaker 1: take his word for it. And you know, one of
Speaker 1: the geologists I talked to called this black box technology.
Speaker 1: It's not a rare thing. People go out and they
Speaker 1: you know, they sort of try their special technology and
Speaker 1: it may not work, and chances are it won't, but
Speaker 1: you can't say it will never work because sometimes it does.
Speaker 1: And it sounds like, you know, based on what it
Speaker 1: costs to get one of these leases on federal land
Speaker 1: in Nevada, the risk isn't that high. Necessarily, the cost
Speaker 1: of leases is low, not because of the price of
Speaker 1: oil necessarily, but because there's just not a lot of
Speaker 1: competition for the leases. So these, you know, the leasing
Speaker 1: process is competitive, and if there's a lot of competition
Speaker 1: for a lease, you know you'll see those it's an
Speaker 1: auction people. You know, there's a bidding war can happen.
Speaker 1: And you know, in places like Wyoming you see leases
Speaker 1: go for occasionally dollars hundreds of dollars per acre, but
Speaker 1: in Nevada that's that's rare, and most of the parcels
Speaker 1: there go for like two dollars an acre. So anybody
Speaker 1: with a with a couple thousand bucks can you know,
Speaker 1: buy up a lease and you know they have been
Speaker 1: drilling rights for ten years. We're going to take a
Speaker 1: quick break now, but when we come back, we're going
Speaker 1: to talk about why BLM, that's the Bureau of Land Management,
Speaker 1: not the other BLM, is doing what it's doing and
Speaker 1: about whether a new president in the White House could
Speaker 1: change course. Stay with us, Let's talk about the environmental
Speaker 1: consequences of this, because you know, I get the sense
Speaker 1: from your story that the smaller drillers, the maybe you know,
Speaker 1: the wildcatters, don't necessarily have the kind of record of
Speaker 1: following environmental laws and regulations that the larger drillers do.
Speaker 1: The Exxons, the Chevrons, I mean, they have their own
Speaker 1: environmental issues, but these smaller drillers seem like they're there.
Speaker 1: They might be cutting a lot of corners when it
Speaker 1: comes to environmental regulations. Can you can you talk about that? Well,
Speaker 1: it's I mean, first of all, it varies from company
Speaker 1: to company and from driller to riller. But you know,
Speaker 1: the guy with the MRI and the sky, you know,
Speaker 1: he's run into some environmental issues himself. You know, it
Speaker 1: sounds like it's you know, Western Oil Exploration is a
Speaker 1: pretty small company, and you know they may not have
Speaker 1: the expertise that you know, the Exxons and noble energies
Speaker 1: of the world might have. You know, he he he
Speaker 1: ran into some permitting problems and some basically he violated
Speaker 1: the terms of his lease federal lease and ran into
Speaker 1: some environmental issues at both the state and county levels,
Speaker 1: and you know, last I talked to him, he claimed
Speaker 1: that he was in the process of resolving that. So
Speaker 1: back at the end of July, there were some dust issues,
Speaker 1: and there were some there was some there was a
Speaker 1: road issue, there were some various other environmental compliance issues
Speaker 1: that violated the terms of his oil and gas lease
Speaker 1: in in Nevada and federal oil and gas lease to
Speaker 1: be clear, and so the Bureau Land Management required him
Speaker 1: to assend, shut down the drilling operation and shut in
Speaker 1: the well. As of last week, I believe that was
Speaker 1: the well was still shut in and the Bilim had
Speaker 1: not allowed him to start drilling again. So finally, though,
Speaker 1: let's talk about the future here, and you know, of
Speaker 1: course every story that we do now has to end
Speaker 1: with what would happen under a potential Biden administration. Do
Speaker 1: you see this changing? Because you noted in your story
Speaker 1: that there was a lot of activity on oil and
Speaker 1: gas ly seeing under the George W. Bush administration, it
Speaker 1: really dropped off under the Obama administration, picked back up
Speaker 1: under Trump. So it seems like this is something that
Speaker 1: really depends on who is in the White House. Or
Speaker 1: which party is in control of the presidency. Is this
Speaker 1: is that the case or is this something that a
Speaker 1: potential future Biden administration might not be able to change. Well,
Speaker 1: the thing about Nevada is that, you know, it's eighty
Speaker 1: percent federal. So I mean, it's a giant state in
Speaker 1: the West, and the federal government has domain over most
Speaker 1: of it. And so you know, federal energy policy and
Speaker 1: climate policy for that matter, affects how oil and gas
Speaker 1: has developed in well, across the West, but you know,
Speaker 1: especially Nevada. But you know the thing is that there's
Speaker 1: not a lot that's going on. If Biden, if he's elected,
Speaker 1: and you know, and he decides that, you know, for
Speaker 1: climate reasons, leasing on federal land needs to stop. Uh,
Speaker 1: that would affect what's going on in Nevada right now.
Speaker 1: That's it for today's episode of parts Pervilion. If you
Speaker 1: want more environmental news, check out our website news dot
Speaker 1: Bloomberg Environment dot com. That website, once again is Newstop
Speaker 1: Bloomberg Environment dot com. Today's episode of Parsparavilion was produced
Speaker 1: by myself and Josh Block. Pars Pavilion was created by
Speaker 1: Jessica Coombs and Rachel Daegel. Music for today's episode is
Speaker 1: a Message by Jazarre and Feel That Beat by Tom
Speaker 1: Hillock and Nicholas Boskovic. We're used under a creative commons
Speaker 1: of life since see you next week. The killers of
Speaker 1: Berta Casseras had every reason to believe they'd get away
Speaker 1: with murder. Her work as an environmental activist won her
Speaker 1: the admiration of celebrities in California, politicians in Washington, and
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Speaker 1: earned her powerful enemies. On a new podcast from Bloomberg Green,
Speaker 1: Blood River follows a four year quest to find Berta
Speaker 1: Caaceras's killers. Join journalist Montereal and the team from Bloomberg
Speaker 1: Green as they untangle false leads and mishandled evidence, taking
Speaker 1: listeners deep into a sector of international development that's marked
Speaker 1: by high level corruption and rampant violence. Blood River debuts Monday,
Speaker 1: July twenty seventh on Apple Podcasts, Spotify, or wherever you
Speaker 1: listen m