Republicans who are eager to point fingers at the Obama administration for obstructing oil and gas production can blame their engineered shutdown for slowing down small to mid-sized oil companies.
With the Bureau of Land Management closed, permits cannot be processed and auctions must be canceled, which could slow down drilling in the Gulf of Mexico. One New Mexico auction has been scrapped already with another potentially shut down in Montana. This has the most potential to hit smaller operators, Interior Secretary Ken Salazar said on a call organized by the Center for American Progress. “Some of the bigger companies have permits stockpiled, but a lot of the smaller operators don’t, and they’re going to take a hit unless the government opens soon,” he said. Oil inspections have likewise been affected, with 85 percent of the Bureau of Ocean Energy Management and 94 percent of the EPA furloughed.
By extending the shutdown, Republicans may manage to delay the State Department decision on the Keystone XL pipeline. No decision will be made until the department finishes its review of Keystone’s environmental impact — however, consulting agencies have lost most of their staff.
But the shutdown doesn’t bring all bad news to the oil industry. Although the public is barred from federal public lands, drillers can continue their work. And ExxonMobil has gotten a break in the federal lawsuit over the Mayflower, Arkansas pipeline spill: A U.S. District Judge approved the prosecutor’s request to delay the trial for civil penalties, because the shutdown means attorneys cannot work on the case.