Regulatory agencies in some of the country’s most prolific oil and gas states are facing a one-two punch of funding cuts, as Republican governors and state lawmakers seek to echo changes in Washington.
The result could be budgets slashed by hundreds of millions of dollars at state agencies tasked with monitoring pollution and overseeing the oil and gas industry.
The Trump administration’s Department of Government Efficiency, or DOGE, has inspired Republican-led states to create their own versions of an office that grew out of a push from Tesla CEO Elon Musk. The funding and regulatory differences could be stark for environmental quality departments and fossil fuel regulators in red states with their own DOGE departments versus blue states without similar efforts.
“We could be talking about a tale of two nations,” said Barry Rabe, professor emeritus of environmental policy at the University of Michigan and a senior fellow at the Brookings Institution. “I think that if you see state DOGE equivalency emerge, you are going to limit or weaken state capacity in these sectors. There will be fewer inspectors, there will be less monitoring, there will be more deference to what individual industries report.”
So far, the Republican governors of Louisiana and Oklahoma have signed executive orders creating their own DOGE-like departments. The Texas Senate passed S.B. 14 on March 26, which would create a Texas Regulatory Efficiency Office within the governor’s office; the Texas House has created the Committee on Delivery of Government Efficiency to review proposed bills for cost efficiency. The North Dakota House passed a bill 88-2 in favor of creating a DOGE department there.
Brandy Wreath, director of administration at the Oklahoma Corporation Commission, said at an open meeting last month that his agency was approaching its budget differently because of cuts lawmakers are looking to make.
The commission had requested a little more than $23 million in appropriations for fiscal year 2026, but a Senate subcommittee recommended it be given $20.8 million instead. That reduction in funding would be in addition to any cuts made by the entity known as DOGE-OK.
Effectively, Wreath said, “we’re going to be getting a reduction if the current Senate recommendation is accepted.”
DOGE-OK held its first meeting with state agencies last month to outline its scope of work, according to a post on X.
“We did attend the first DOGE meeting, so we participated in that. It was a very interesting process,” Wreath told commission members. “I’m happy to report that as soon as the meeting was done, they sent out an email requesting agencies to start working on money saving initiatives, and we submitted three or four the first day I think that we already had.”
The Oklahoma Corporation Commission declined to comment to POLITICO’s E&E News.
EPA Administrator Lee Zeldin has pledged to dramatically slash EPA’s budget, and it’s unclear how much of the cuts would come from reductions in funding sent to states.
In response to E&E News’ questions, EPA’s press office wrote that Zeldin and President Donald Trump are in “lockstep” in efforts of creating a more efficient and effective federal government.
“Compared to 2024, the total amount spent year over year at EPA will deliver significant efficiencies to American taxpayers by cutting wasteful grants, reassessing the agency’s real estate footprint, and delivering organizational improvements to the personnel structure,” EPA officials wrote. “In his first term, President Trump advanced conservation and environmental stewardship while promoting economic growth for families across the country and will continue to do so this term.”
White House spokesperson Taylor Rogers said in an email to E&E News that Zeldin is working to reverse “radical climate regulations” created by the Biden administration that have weighed down part of the economy.
The American Petroleum Institute declined to comment and referred E&E News to state-level oil and gas associations. The Texas Oil & Gas Association did not respond to a request for comment, while the North Dakota Petroleum Council declined to comment.
Mahyar Sorour, the Sierra Club’s director of Beyond Fossil Fuels policy, said in a statement to E&E News that cuts by federal and state DOGEs to environmental agencies and fossil fuel regulators would not bring efficiency to government.
“Careless and disorderly cuts to critical funding and staff who are in charge of permitting processes will only create more confusion and delays instead of efficient and effective processes,” Sorour said. “Less oversight of these operations put [people’s] lives and safety at risk. These cuts will lead to fast-tracking fossil fuel infrastructure, lining the pockets of Big Oil and Gas companies while harming communities and polluting our environment.”
‘Livable land’
For the North Dakota Department of Environmental Quality and other states’ environmental quality departments, cuts made by legislatures or state-level DOGE departments would be on top of a potential huge loss in federal funds.
The North Dakota DEQ gets about 45 percent of its funding from EPA, according to David Glatt, director of the North Dakota department.
“We also make it clear to EPA that 90-plus percent of the work environmental protection work is done at the state level,” Glatt said. “We’re out on the ground. We’re doing the permitting. We’re doing the lion’s share of compliance and enforcement actions.”
Glatt said EPA funds were frozen for about 24 hours shortly after Zeldin was confirmed to lead the agency. The funding eventually resumed, but Glatt said the pause was a wake-up call.
“That forced us to take a look at really what does our budget look like if we didn’t get any more federal funding, we could maintain payroll, those type of things until Sept. 30,” Glatt said, adding that EPA has a continuing resolution with North Dakota to keep current funding levels. “Obviously, if we’d be zeroed out of our federal funding, that would be a major blow to us, and we would really have to take a look at what do we do and what do we don’t do anymore.”
He said the North Dakota DEQ would prioritize efforts to monitor and implement the Clean Air Act and the Clean Water Act, and functions related to the department’s mission of “clean air, clean water and livable land.”
But he said the department may need to rethink other functions, like charging oil and gas operators a fee in exchange for permits or trying to give oversight of some programs back to EPA.
North Dakota Republican state Rep. Nathan Toman, who is the lead sponsor of H.B. 1442 to create a DOGE-like office in North Dakota, did not respond to a request for comment.
Glatt also worried about how federal and potential state cuts could impact the North Dakota department’s ability to oversee carbon capture and sequestration permits. EPA funds states to develop and implement Class VI programs, which are programs that oversee carbon sequestration projects, thanks in part to a $48 million injection by the Biden administration.
North Dakota was the first state to be given permission to approve and oversee Class VI injection wells, which are wells where carbon dioxide is injected deep into the earth for permanent sequestration.
“Staying at the forefront of all that really helps the state grow and protect the environment at the same time, that requires very highly technically competent people,” Glatt said. “We want to keep those folks.”
EPA officials wrote in an email to E&E News that the Class VI program is central to Zeldin’s Powering the Great American Comeback initiative, which aims to promote new energy development, permitting reform, clean water supplies and partnering with states.
“Under the Safe Drinking Water Act, EPA has developed federal requirements for injecting carbon dioxide (CO2) that protect human health by ensuring injection wells do not contaminate underground sources of drinking water,” EPA said.
‘Don’t mess it up’
New Class VI wells will need to be watched closely because the technology is so new, said Virginia Palacios, executive director of Commission Shift Action, an advocacy group seeking reforms to the Railroad Commission of Texas, which oversees the state’s oil and gas industry.
There are now eight federal EPA-permitted Class VI injection wells and at least 17 state-permitted Class VI injection wells.
“This is all fresh, and we need to make sure that we don’t mess it up and ruin our groundwater at the same time we’re trying to solve climate change,” Palacios said.
The Texas Railroad Commission had planned to receive more than $104 million from the federal government in fiscal 2025, according to the agency’s legislative appropriations request. Most of that money — about $97.9 million — would be funds from the Department of Interior to help plug abandoned oil and gas wells.
The federal funding for plugging old wells is likely to be relatively safe from cuts made to other federal programs created from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act — laws signed by President Joe Biden that the Trump administration is reviewing and potentially nixing under Trump’s Unleashing American Energy executive order.
“Interior’s orphaned wells program is an important component of the Administration’s efforts to unleash American energy,” the Interior Department said in a statement reponding to E&E News questions.
Still, the Texas Railroad Commission has been struggling to address a spate of well blowouts, leaking abandoned wells and seismic activity in the Permian Basin. Last year, commission staff requested an additional $100 million from the state Legislature to address “emergency” orphaned wells, on top of the more than $234 million it requested for well plugging and remediation for the combined 2026-2027 fiscal years.
In a response to E&E News, Railroad Commission spokesperson R.J. DeSilva said that the extra state money is needed because plugging emergency wells — those actively leaking onto the surface or causing major surface impacts — can cost millions of dollars for a single well.
“The additional requested funding would also free up our annual appropriations to plug non-emergency high priority wells on our plugging list before those could potentially become expensive emergency well pluggings,” DeSilva said in an email. “This is all part of the RRC’s vigilant work to plug wells across Texas.”
Palacios said the Texas Legislature will likely grant the Railroad Commission’s funding request because the scale of the problem has grown. But other cuts that a Texas DOGE department could enact, like cutting the number of inspectors, could make the problem worse, she said.
She said the Railroad Commission has about 185 inspectors for the oil and gas team, each of whom are responsible for more than 1,000 wells.
“We’re already seeing well blowouts, earthquakes and water contamination,” Palacios said. “If you’re not adding inspectors and investigators, you are going to have more of them.”
Texas Republican state Rep. Giovanni Capriglione, who is chair of the Texas House Committee on Delivery of Government Efficiency, did not respond to a request for comment.
Rabe with the University of Michigan said that under the Trump administration it will likely be up to states to fill the void left by federal cuts — and states would be the ones to investigate and enforce their own environmental rules.
He pointed to New Mexico, which put strict limits on methane emissions from the oil and gas industry before the Biden administration and has fined violators. New Mexico’s Democratic-led Legislature did not create a DOGE department during its 2025 session, and there is no indication the state’s governor will create sometime similar through executive actions.
Other states, though, could soon start slow-walking compliance with federal regulations, Rabe said, and may not face federal pressure to ramp up enforcement and implement Biden-era policies. Red state spending to follow those environmental rules may be increasingly hard to come by, Rabe said.
“I’m not sure that the current political climate is going to allow for that, especially if we’re moving into a more of a slower economy and states are really having to tighten their budgets,” he said.
