Biden Defunds the States

His oil and gas drilling moratorium is an assault on school funding

WSJ editorial.

"President Biden wants to give states $130 billion more in Covid relief, but he may need more after Wednesday. The oil and gas lease moratorium on federal lands that he announced will erase thousands of blue-collar jobs—and billions of dollars in revenue that states use to fund education.

The feds split mineral royalties with the states, many of which rely on the revenue to balance their budgets. Some states also impose general receipts taxes on oil and gas production. Wyoming state superintendent Jillian Balow notes that her state depends on some $150 million a year in oil and gas federal royalties to fund K-12 schools. 

A University of Wyoming study last month estimated that a federal leasing moratorium could cost states on average $1.6 billion annually in tax revenue. New Mexico ($946 million), Wyoming ($304 million), and North Dakota ($136 million) would be hit hardest, though Colorado, Alaska, Utah and Montana would also lose tens of millions of dollars.

Because state, private and federal lands are interspersed in a checkerboard pattern, as the study notes, Mr. Biden’s ban will effectively limit production on much private and state land too. Job losses will also reduce income and sales tax revenues.

Notably, Mr. Biden’s order exempts Native American tribal lands and says “The Secretary of the Interior shall engage with Tribal authorities regarding the development and management of renewable and conventional energy resources on Tribal lands.” States also have sovereign rights under the Constitution. Why isn’t the Administration engaging with them?

Democratic politicians in Colorado and New Mexico haven’t denounced Mr. Biden’s land grab, but we doubt they will extend his leasing ban to state and private land. Revenue from the oil and gas industry last year provided about a third of New Mexico’s public school funding and helped to finance college scholarships.

West Virginia Sen. Joe Manchin on Wednesday all but begged Secretary of Energy nominee Jennifer Granholm for reparations to compensate for the government’s fossil-fuel destruction. “People feel like they’ve been left behind. In those areas that have been ravaged because of the market changes, how do we keep them in an opportunity situation?” he said. “What can the Department of Energy help those areas with?”

Progressive hostility to fossil fuels is driving these “market” changes. First the Obama Administration punished the coal industry with regulation. Shale fracking then helped revive West Virginia and much of Appalachia. Now Mr. Biden is trying to destroy these jobs too.

Ms. Granholm promised to prioritize “clean energy” spending in states losing fossil-fuel jobs. Sorry. Solar and electric-car subsidies won’t help people put food on the table or their children through college."