Mixed impacts for energy, mining as US government shuts down

The US federal government shut down on Oct. 1 after Republicans and Democrats failed to pass a budget deal before funding expired.

During a shutdown, most federal agencies close nonessential operations, and employees are typically furloughed. For the energy sector, that could mean longer wait times and delays in permitting and agency approvals.

A prolonged shutdown could have more extended impacts on the energy and metals and mining sectors as agencies close their doors to nonessential work, which could delay permitting approvals and agency guidance for ongoing and new projects.

EIA continuing data releases

The US Energy Information Administration (EIA) said there is "no immediate impact" on its operations.

"We will continue to collect and publish data on our regular schedule," EIA Press Officer Chris Higginbotham said in an email. The agency is scheduled to release its next monthly Short-Term Energy Outlook on Oct. 7, with forecasts for energy supply and demand and prices.

The US Energy Department's 2025 shutdown plan says the agency would operate with a smaller staff after exhausting available balances, focused on safety, property protection, and discharging the president's constitutional duties and powers.

Out of 13,812 full-time employees on Oct. 1, that includes about 1,600 employees, with roughly 4,100 also retained because they are financed by a resource other than annual appropriations.

The DOE is one of the few agencies that primarily operates on so-called "no-year" money that does not automatically expire at the end of the fiscal year.

FERC operates on carryover funds

The Federal Energy Regulatory Commission has historically weathered shutdowns using carryover funds to support its operations.

According to the agency's 2025 shutdown plan, no disruption is expected during a one- to five-day lapse in appropriations, and FERC will continue operating using balances from prior years if the lapse runs longer.

If the agency exhausts the carryover funds, the shutdown plan calls for FERC to retain about 60 employees and 18 contractors, representing about 5% of its total workforce, to perform excepted activities. The minimal staffing and limited functions would be focused on reliability, market monitoring and inspection of hydropower and LNG facilities, as well as providing legal advice to commissioners.

FERC commissioners would also remain on the job, and 28 employees fully funded through Inflation Reduction Act spending would also continue working.

Energy companies are monitoring for impacts on project permitting tied to a shutdown. While FERC was able to continue processing natural gas project applications during the 35-day shutdown in 2018, staff of some other federal agencies participating in the reviews, including the Pipeline and Hazardous Materials Safety Administration, were affected.

EPA to furlough nearly 90% of workforce

The US Environmental Protection Agency will retain 1,734 employees during the shutdown, according to the agency's recently released contingency plan. That's up from the 1,260 employees the agency planned to retain in its previous contingency plan released in March.

EPA employees will prioritize protection of property and law enforcement, disaster relief, and planning and preparation of the agency's fiscal year 2027 budget.

Permitting and issuing new regulations will mostly cease during the shutdown, and the agency will not process approvals for any pending state requests.

The EPA will operate some functions that are funded by "unexpired appropriations" until that money runs out. An EPA spokesperson declined to comment Oct. 1 on whether the agency had any carryover funds left over to continue operating.

"EPA is operating according to our lapse plan," the spokesperson said.

One impact of the government shutdown could be a delay in Trump administration regulatory priorities, such as reversing the EPA's endangerment finding and power plant emissions rules.

"The shutdown has already been happening for months, despite the political jockeying of the day," Marc Boom, a senior policy adviser at the EPA during the Biden administration, said during a Sept. 29 press briefing hosted by the Environmental Protection Network, an advocacy group of former EPA employees.

Under the Trump administration, nearly 4,000 EPA employees — a quarter of the agency's workforce — have been eliminated, Boom said.

BLM continues permitting amid Interior furloughs

The Interior Department will furlough just under 31,000 employees under the shutdown, representing about 53% of the agency's total employees. The department has indicated it would furlough additional employees if the lapse in appropriations extended beyond five days.

That includes 4,000 employees, representing about 43% of the total staff, at the Bureau of Land Management (BLM). According to a contingency plan shared with Platts, part of S&P Global Energy, late on Sept. 30, the BLM will continue permitting activities, including oil and gas, transmission and related rights-of-way. The BLM froze permitting or project reviews when funding lapsed during prior shutdowns.

Interior will also furlough 339 employees, or 72% of total staff, at the Bureau of Ocean Energy Management. The department will also furlough 190 workers at its Bureau of Safety and Environmental Enforcement.

The Office of Surface Mining Reclamation and Enforcement, which regulates surface coal mining under the Interior Department, would not see its employees furloughed during a shutdown unless it extends beyond five days. A longer shutdown would result in 174 furloughed employees.

Several mines, including the Golden Mile Mine, a gold and copper mining project, and the Tonopah Flats Lithium Project, both in Nevada, have permitting and environmental reviews currently in progress. More than 20 BLM projects currently labeled as "in progress" are on the federal permitting dashboard.

CFTC pausing Commitment of Traders report

The US Commodity Futures Trading Commission will not publish the weekly Commitment of Traders report during the shutdown, it said in a notice Oct. 1. The report provides a breakdown of each Tuesday's open interest for futures and options on futures markets.

The commission's 2025 shutdown plan calls for 31 of its 543 employees to continue to perform excepted functions, needed to oversee the derivatives markets and ensure they are free of fraud and manipulation.

Commissioners and the chairman are also exempt, as are about 18 employees funded by resources other than annual appropriations in the whistleblower and customer outreach offices and the Division of Administration.

PHMSA, MARAD curb staff

At the Pipeline and Hazardous Materials Safety Administration, 389 staff will continue to perform their duties through funding other than annual appropriations, according to a shutdown plan for the US Department of Transportation. However, 190 members of staff will not be working, the document said.

PHMSA is within DOT, and the office of pipeline safety at PHMSA has inspection and enforcement activities that are funded apart from appropriations through Congress. Those activities will continue during the shutdown, the Sept. 30 document noted.

Among the PHMSA activities to be affected by the shutdown are regulatory analysis and planning, certain legal services and information resources management.

The Maritimes Administration also is within DOT, with responsibilities for licensing deepwater ports that accommodate oil and LNG vessels. With 790 staff before the shutdown, MARAD will operate with a staff of 598 during the shutdown, according to the DOT document.

Reductions in force, agency priorities

The shutdown also raises the stakes on the White House Office of Management and Budget's (OMB) threat to mass fire federal employees whose work is not "consistent with the president's priorities." President Donald Trump told reporters on Sept. 30 that he might fire "a lot" of employees if lawmakers do not reach a deal.

The OMB did not respond to a request for comment from Platts on Sept. 30. Energy agencies contacted by Platts on Sept. 29 did not respond to questions about whether they planned to initiate layoffs in the event of a government shutdown.

The American Federation of Government Employees and the American Federation of State, County and Municipal Employees filed a lawsuit in a federal district court in San Francisco on Sept. 30, challenging the Trump administration's threat of mass layoffs. The Democracy Forward Foundation filed a similar complaint in a District of Columbia court on Oct. 1.

The labor unions asserted the administration violated the federal Administrative Procedure Act when directing agencies to tell employees to bring home laptops and "work during the shutdown in order to effectuate these [reductions in force]."

Nor are layoffs applicable to government shutdowns because the length of a worker furlough is unknown, making the administration's plans confusing, arbitrary and capricious, the lawsuit said.

The possibility of more federal layoffs comes as the ADP National Employment Report announced Oct. 1 that private-sector companies shed 32,000 jobs in September.

Negotiations break down

A continuing resolution that would have maintained funding at current levels through Nov. 21 passed the Republican-controlled House of Representatives but failed to garner the 60 votes needed to clear the US Senate. Senate Democrats are holding out as they push to extend Affordable Care Act subsidies that are set to expire at the end of the year.

Negotiations broke down on Sept. 29 during a meeting with Republican and Democratic leadership and the White House. Senate Minority Leader Chuck Schumer (D-NY) told reporters following the meeting that Republican lawmakers had not tried to negotiate with Democrats.

In addition to the healthcare provisions, Schumer said Democrats want assurances that limit the White House's impoundment of congressionally appropriated funds through the use of pocket rescissions. A pocket rescission is a legally questionable measure by the president that asks Congress to claw back certain funds so close to the end of the fiscal year that an argument can be made that the money cannot be spent before expiring.

"How could we negotiate a bipartisan agreement and then have the president unilaterally through impoundment or the Republican Party through rescissions and the president unilaterally through pocket rescissions undo it all without any input at all?" Schumer told reporters following the Sept. 29 meeting.

The White House and Republican leadership blasted Democrats, saying there was nothing to negotiate with a "clean" continuing resolution, which lacks policy riders and largely maintains existing funding levels.

"This is something that 13 times, when [Chuck Schumer] was the majority leader, we passed short-term continuing resolutions — 13 times — and the Republicans delivered the vote for it. This is a routine thing. This is not unusual," Senate Majority Leader John Thune (R-SD) told CNBC's Squawk Box on Sept. 30.