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