Oil & gas industry sidesteps government shutdown

Despite the ongoing partial government shutdown, U.S. oil and gas will continue to flow because the Trump administration has deemed that energy production is essential for the good of the U.S. economy, not to mention his desire to keep prices at the pump low.

The Bureau of Land Management, which oversees oil and gas on federal land, has employees "working on selected energy, minerals, rights of way, grazing, and associated activities" and are now "exempt" and expected to continue working during the shutdown. The bureau employees are being paid through "permanent appropriations" and unspent funds from previous fiscal years.

Not only will the government continue to issue permits for oil and gas drilling on federal lands, it will also try to make sure that we don’t see inspection slowdowns for oil and petroleum products in U.S. ports. It will allow for those workers to work, yet they may be scaled back. At the same time the move will keep the U.S. energy industry thriving, which should help boost our economy and allow the U.S. to build on the record U.S. crude production that hit 11.9 million barrels a day last week, 2 million barrels per day higher from a year ago.


This is a marked difference from the previous administration. President Barack Obama, during his government shutdown, only allowed employees to work who were responsible for safety inspections and those who enforced regulations at well sites. It seemed that it was designed to hit energy companies and energy workers to try to get Republicans to cave to his budget demands.

Yet while the Trump administration fights to keep the oil flowing, it will get harder the longer the partial shutdown -- already the longest in history -- drags on. The truth is that other unpaid employees and agencies with skeleton staffs will eventually slow the process down. U.S. oil imports and exports could also be bogged down, especially if there is paperwork from a shipper that is flagged for a federal agency in which staffers are not working. Those agencies would have to approve or disapprove the shipment and they can’t do that if they are not working.

This over time would cause higher prices for oil and oil products and at some point add to your cost at the pump.

Phil Flynn is senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report.