"We just got this big tug of war going on in Washington between less government and more government," said oil expert Hoxie Smith, Petroleum Professional Development Center director.
Although it hasn't been the hottest sequester topic as of late, the impact of the sequester on federal energy activity is a great example of this tug of war. On one side there's the President Obama's chief energy and environmental policy adviser who was quoted in the Oil and Gas Journal saying the automatic budget cuts would force activity to slow down in every state and that oil and gas producers should expect additional delays in permit application processing.
"I don't think that's much of a change from what we've seen out of the federal government during the Obama administration," said Smith.
Smith added that drilling permits with the BLM already take over 300 days. "So I don't think this is going to be something that's really going to impact the activity a lot because, let's face it, the places with the most activity right now is Texas and North Dakota. Texas has no federal lands and North Dakota has very few."
Here in the Permian Basin, Smith said it could have a small impact on drilling in New Mexico, but the alternative would be much worse. "The alternative to it is raising taxes and raising taxes on corporations and that would be harder on the domestic oil and gas industry than the sequestration."
Smith said we should be more concerned with things like hydraulic fracturing regulation, the Keystone pipeline and the potential listing of the Lesser Prairie Chicken.
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