Big Oil, Big Business Slam Biden's Pause on New Oil & Gas Leases on Federal Lands and Waters
Big Oil and Big Business sharply criticized President Joe Biden's executive order, released Wednesday, for a moratorium of indeterminate length on entering into new oil and gas drilling leases for public lands and waters. The executive order, which has been selectively leaked to news organizations for several days, was released amid a flurry of other actions that the White House termed "Climate Week."
Responding to those leaks, the oil and gas industry preemptively criticized the order even before it was released. For more on that, see January 27, 2021, article - Battle Lines Drawn Over Potential Ban on New Oil & Gas Drilling on Federal Land. It looks like oil and gas producers and the Biden administration will be crossing swords a lot over the next four years.
According to a summary provided by the White House, the presidential order "directs the Secretary of the Interior to pause on entering into new oil and natural gas leases on public lands or offshore waters to the extent possible, launch a rigorous review of all existing leasing and permitting practices related to fossil fuel development on public lands and waters, and identify steps that can be taken to double renewable energy production from offshore wind by 2030. The order does not restrict energy activities on lands that the United States holds in trust for Tribes."
The order also directs federal agencies to "eliminate fossil fuel subsidies as consistent with applicable law and identify new opportunities to spur innovation, commercialization, and deployment of clean energy technologies and infrastructure," according to a White House summary of the president's executive order.
The order follows Biden's "Day 1" proclamations halting the issuance of new oil and gas drilling permits on public lands and waters for 60 days. In other "Day 1" executive orders, Biden rejoined the Paris Climate Accord and terminated construction of the Keystone XL pipeline.
The American Petroleum Institute (API) (Washington, D.C.), the oil and gas industry's largest lobbying group, blasted the new executive order, saying it "threatens America's energy security and economic growth (and) undermines environmental progress."
The group said energy produced on federal lands and waters "plays a critical role in America's energy revolution, accounting for 12% of U.S. natural gas production and nearly 25% of U.S. oil production."
API said a complete ban on oil and gas drilling on federal lands and waters, which is not what Biden was ordering, could have perverse consequences, including a 15% increase in the use of coal over the next decade as natural gas prices shoot upward. Coal-fired power plant retirements or conversions would slow by 50% compared to the current trajectory of plant retirements and fuel switches. Both of these consequences would undermine U.S. efforts to lower carbon dioxide (CO2) emissions.
A full ban on drilling in public waters alone could cut domestic natural gas production from those areas by 68%, the trade group alleged. Oil production from public waters could drop 44%, leading to a 2 million barrel per day increase in imports by 2030, it added.
The ban also would cut into exports of liquefied natural gas (LNG) and cost the overall U.S. economy nearly 1 million jobs by 2022, API said.
But in remarks at the White House on Wednesday Biden anticipated some of the industry's opposition, saying, "We're not going to lose (oil and gas) jobs, we're going to create jobs. We're not going to ban fracking."
"Today is Climate Day at the White House," the new president said, "which means it's Jobs Day at the White House." He said the burning of fossil fuels carries health and national security impacts as well as exacerbates what the administration refers to as the "climate crisis."
The pause on leasing and new drilling permits will be so his administration can conduct a broad, thorough, multi-agency review of the impact of oil and gas drilling.
In response to Biden's Wednesday executive order on climate change, Marty Durbin, president of the U.S. Chamber of Commerce's Global Energy Institute, said: "The U.S. Chamber applauds President Biden's 'whole of government' approach to combatting climate change. ...However, the administration's move to impose an indefinite ban on new energy production on federal lands and waters is bad policy and counterproductive to the goals of supporting the economy and combatting climate change."
"Experts agree," Durbin continued, "that the world will need oil and gas for decades, and that natural gas in particular is essential to meet emissions reductions goals and allow for the deployment of more renewable energy. Such a ban will also starve local communities of revenue that funds state and local governments and schools."
Anticipating a potential Biden presidency and a raft of new restrictions following the previous administration's strong support for increased oil and gas development, oil and gas companies stockpiled drilling permits for federal lands and waters in recent months, according to an analysis by the Associated Press (AP). Those companies now have an estimated four-to-five-year supply of federal drilling leases, the AP analysis said.
Environmental and social justice organizations, not surprisingly, saw Biden's moves very differently. Nada Culver, vice president of public lands at the National Audubon Society (Washington, D.C.), said: "The industry has a lot of leases in production, a lot of leases that have been issued, so it won't have an immediate impact. But it will give an immediate opportunity for the administration to think about how we move forward."
In a statement, Fred Krupp, president of Environmental Defense Fund (New York, New York), said: "President Biden's bold and decisive action today again makes clear he is serious about restoring and strengthening American leadership on climate solutions. The administration's commitment to rapidly cut climate pollution, create good jobs now and in the future, and build healthier communities -- especially communities of color unfairly burdened by pollution -- demonstrates significant progress in the fight to protect our climate."
The temporary moratorium on new drilling leases on federal lands and waters is a sensible policy that buys us time to ensure drilling does not derail our path toward a clean energy economy," Krupp said.
"In particular," Krupp continued, "the Biden administration's actions to take a whole-of-government approach to climate change, prioritize environmental justice as an integral part of climate policy and return to science-based decision-making, signal the U.S. will lead on strong, inclusive climate action."
The executive orders issued Wednesday also establish an interagency working group to revitalize coal and other fossil fuel communities. In addition to seeking a 50% increase in offshore wind generation by 2030, Biden also instructed the federal government to prioritize the purchase of non-emitting cars and trucks.
As a candidate and as president, Biden has pledged to completely decarbonize the power sector by 2035 and make the overall U.S. economy a net-zero emitter of CO2. On Wednesday, a statement from the White House read, "Today's actions advance those goals and ensure that we are tapping into the talent, grit and innovation of American workers, revitalizing the U.S. energy sector, conserving our natural resources and leveraging them to help drive our nation toward a clean energy future, creating well-paying jobs with the opportunity to join a union, and delivering justice for communities who have been subjected to environmental harm."