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Musk's layoffs reduce workforce required to realize Trump's energy dominance plan

According to state officials and representatives of agencies, the Trump administration's mass firings have caused a slowdown in government approvals for new energy projects, which could be a setback for President Donald Trump's "drill baby, drill" agenda. This is one of the unintended effects of Elon Musk's Department of Government Efficiency's mass firings, which were intended to cut wasteful spending. However, current and former officials claim that this runs counter to Trump’s pledge to increase production of oil and gas as well as power generation and electrical transmission. This strategy was partly outlined in a series executive orders signed by President Trump to open up vast new areas for drilling off the coast of Alaska.

Since mid-February, cuts have affected employees in agencies that are crucial to the process of issuing permits for new federal or tribal energy production. These include the Bureau of Land Management (BLM), the Bureau of Indian Affairs (BIA), and the Bureau of Ocean Energy Management.

Harrison Fields, spokesperson for the White House, said that "streamlining organization charts to improve government efficiency will not affect President Obama's Drill Baby Drill initiative, and hyperventilating over cutting fraud, waste and abuse is irresponsible." Reporting showed that permitting has slowed down in the nation's most productive oil and gas producing states like New Mexico and Alaska as well as Native American tribes who rely on fossil-fuel extraction to fund public services such as schools. Federal lands and waters are responsible for almost a quarter (25%) of the total U.S. output of oil and provide public revenue through production royalties. However, it's not clear to what extent the job cuts have affected new production. According to the Energy Information Administration, the U.S. will produce an average of 13,23 million barrels a day (bpd).

"I don’t understand these wide cuts," said Mike Celata who was BOEM's Gulf of Mexico regional director for seven years. This included during Trump's initial term. "You're essentially talking about an organization that has brought billions in revenue to the Treasury."

Celata said that the process of rigorous environmental review is crucial to protect government oil and natural gas auctions, and drilling programs against litigation which can derail plans by fuel producers. In recent years, environmental groups' lawsuits have caused many energy projects to be delayed or cancelled.

He said, "You have to follow this process." Loss of people is a serious problem.

The 'proper staffing' of agencies is a must

Over 20,000 federal workers have been estimated to have lost jobs, with almost all being probationary employees who have worked in their current role for less than one year. Another 75,000 of the 2.3 millions federal civil servants have accepted a buyout. In the next few weeks, more cuts are expected. Over 2,000 employees are affected, including those in the Interior Department which oversees the Bureau of Land Management and Bureau of Indian Affairs. According to the National Treasury Employees Union, who represents BLM employees, at least 250 employees of the Bureau of Land Management have lost their job. The Bureau of Land Management oversees energy production and mineral production over 245 million acres.

A spokesperson for the Interior Department said that they did not expect any negative impacts. By streamlining our operations, we strengthen our ability to serve public and make government more efficient and accountable.

The American Exploration & Production Council, a trade group that represents independent U.S. producers of energy, declined to comment about the job cuts. However they said it is crucial that permits offices are adequately staffed.

Wendy Kirchoff is AXPC's senior vice president for policy. She said that maintaining key personnel was essential to unleashing American energy dominance.

This week, the CERAWeek conference on energy in Houston echoed the need for staffing to ensure a smooth permitting process.

Matt Schatzman is the CEO of NextDecade LNG, whose projects are dependent on approvals by the Department of Energy, and the Federal Energy Regulatory Commission. He said he supported cutting wasteful federal expenditures, but warned against indiscriminate cuts to job positions in the permitting agencies.

We need to ensure that these agencies have the right staffing. "I cannot stress this enough," he said.

"WE CAN'T ALLOW PROJECTS" The United States was already dealing with an increasing backlog of drilling permits. According to a budget document from the Interior Department published in March 2024, pending permits at BLM increased from 2,552 applications in 2017 to 5,500 in 2025. Both political parties have called for reforms in the permitting process because of the massive queues that exist for energy infrastructure projects such as transmission lines, critical minerals mining and transmission lines. The Biden administration hired more staff to help with the permitting backlog using money from the Inflation Reduction Act, a bipartisan infrastructure bill and the Inflation Reduction Act.

Laura Daniel-Davis was the former acting deputy Secretary of Interior under Biden. She said, "We really pushed to follow Congress' directions and staff up for energy-related permits."

Oil producing state officials say that the job cuts at DOGE are slowing down permitting. Alaskan Republican Senator Lisa Murkowski wrote in a recent Facebook post that "we can't achieve our potential for responsible mineral and energy development if we don't have the ability to permit projects." She added that 60% of Alaska was federal land.

Murkowski's spokesperson Joe Plesha said that the disruption of workers is affecting projects waiting for permits, but refused to provide specifics.

The American Federation of Government Employees (AFE), a union representing federal employees, reported that nearly 1,300 federal probationary employees may have been terminated in Alaska, including 300 at the Interior Department - the parent agency of BLM, BOEM, and BLM.

According to a letter from the state's Congressional delegation, the BLM offices in New Mexico, which manage drilling permits for the state portion of the Permian Basin – the primary driver of record U.S. production of oil and gas – have also been affected. More than a third of New Mexico's general fund comes from revenue generated by drilling on federal lands. New Mexico Dem. "Cutting the BLM workforce could put at risk its efforts in managing our public land, including their role to safely and responsibly manage oil and gas production", said New Mexico Dem. Senator Ben Ray Lujan. According to Lauren Leib of the National Treasury Employees Union, who represents New Mexico BLM workers, permitting and preparation for new leasing sales has already slowed.

After layoffs and lease sales, she said, the agency would struggle to hire staff to fulfill its mandate, which includes processing applications for drilling permits, carrying out lease sales, and ensuring environmental protection.

She said that in New Mexico, a large part of the economy is dependent on oil and natural gas production. A slowdown has a ripple affect on local economies.

Tribal lands also affected

The Osage Minerals Council which oversees mineral affairs of Oklahoma's oil producing Osage Tribe said DOGE's plans to close Bureau of Indian Affairs Osage Agency Offices and terminate their administrator would threaten to put its oil and natural gas permits to a halt. According to BIA data, Osage lands could hold between 1.5 and 13 billion barrels in crude oil reserves. Production is expected to be around 1,000 barrels a day by 2020.

The council stated in a recent statement that it would insist the Secretary of Interior explain to them how the closing of our Agency and displacing BIA staff will improve oil and natural gas permits. (Reporting and editing by Richard Valdmanis, Anna Driver and Georgina McCartney. Additional reporting by Valerie Volcovici.

(source: Reuters)