President Biden adamantly denies discouraging domestic oil-and-gas production, but his well-documented crackdown on fossil fuels in the name of climate change suggests otherwise.
The president’s moratorium on new fossil-fuel leasing on federal lands and waters was blocked by a federal judge in June. Even so, the administration has yet to hold a new onshore leasing sale, despite being required by law to conduct such auctions every quarter where eligible lands are available.
“Nothing is happening. The Biden leasing ban is still in effect,” said Western Energy Alliance President Kathleen Sgamma. “They have not offered one onshore leasing sale. They’re not going to make it for this quarter, either.”
Last November, the administration did hold the largest-ever offshore leasing auction known as Lease Sale 257, a Gulf of Mexico offering primed by the Trump administration. But the sale was vacated by a federal judge after being challenged by environmental groups. The administration opted not to appeal in a Feb. 28 filing.
Sen. Joe Manchin III, West Virginia Democrat, said he was stunned by the administration’s decision, given that Russian President Vladimir Putin triggered a global energy crisis by invading Ukraine just days before the administration washed its hands of the 1.7-million-acre sale.
“It makes no sense at all to me that the decision was made by Interior to not appeal a ruling throwing out the largest Gulf lease sale, particularly when that decision was made several days after Russia invaded Ukraine,” Mr. Manchin said at a committee hearing. “We cannot take a shortsighted approach that pretends two years without lease sales will have no impact on our domestic oil-and-gas production.”
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He also accused the administration of foot-dragging on a new five-year plan for Gulf of Mexico offshore leasing. The current plan expires June 30.
“The administration’s failure to act on the five-year plan, combined with the failure to appeal a vacated lease sale, means that we’re almost certainly looking at no offshore lease sales until sometime next year, to say nothing about the failure to hold onshore sales,” said Mr. Manchin, who chairs the Senate Energy and Natural Resources Committee.
The renewed focus on the administration’s lackluster record on new leasing comes with gas prices surging, as the U.S. seeks to squeeze the Putin regime by banning Russian crude, petroleum products, natural gas and coal.
Mr. Biden has sought to deflect criticism by defending his energy policies while blaming Russia and the oil-and-gas industry for skyrocketing fuel costs.
“First, it’s simply not true that my administration or policies are holding back domestic energy production. That’s simply not true,” said Mr. Biden at a Tuesday press briefing “Even amid the pandemic, companies in the United States pumped more oil during my first year in office than they did during my predecessor’s first year.”
Critics called his argument disingenuous, given that energy production in 2021 was largely the result of policies enacted by his predecessors, just as former President Trump’s first year reflected the priorities of the Obama administration.
Mr. Biden also has accused producers of sitting on about 9,000 unused drilling permits on federal lands, saying that they “could be drilling right now, yesterday, last week, last year.”
“I would suggest you ask the oil companies why they’re not using those if there’s a desire to drill more,” said White House press secretary Jen Psaki at a Monday press conference.
Red tape and red herrings
Kevin O’Scannlain, American Petroleum Institute vice president of upstream policy, called the unused-leases argument a “red herring,” saying that developing leases takes years to determine whether the area has commercially viable amounts of oil and gas.
In addition, he said, companies are typically required to produce or return their leases to the government in 10 years, meaning unused leases won’t languish indefinitely.
Hamstringing production efforts are the Biden administration’s fossil-fuel crackdown, which sends negative signals to potential investors; legal challenges by green groups; permitting delays, and federal environmental reviews.
The Western Energy Alliance said that the 9,000 unused leases are part of a pool of about 37,496 leases in effect, which works out to a “very high lease utilization rate” of 76%. About 2,200 of those are embroiled in litigation with environmentalists.
“The Biden administration has embarked on an agenda of regulatory overreach with extensive new regulations in the works,” said the alliance. “The uncertainty of all the new red tape puts a damper on new investment and development today, especially on federal lands where the burden is highest. Consequently, companies prioritize their nonfederal leases because there’s less regulatory risk.”
Mr. Biden said that 90% of onshore oil production occurs on non-federal lands. About 8% of domestic oil and 9% of natural gas is produced on federal lands, while offshore federal waters account for 16% of oil and 3% of natural gas, according to the Interior Department.
Climate groups argue that the U.S. is already the world’s top producer of oil and gas, and that renewable energy is the path to American energy independence, not “drill, baby, drill.”
“Energy prices are high because fossil fuels are a global market highly influenced by conflicts around the world,” said the Center for American Progress in a Thursday post. “Increasing leasing and permitting rates even beyond their current historically high levels won’t change that.”
While the new-leasing moratorium was lifted in June, the Biden administration again put the brakes on sales after a federal judge halted last month its social-cost-of-carbon analysis in reaction to a lawsuit led by Louisiana Attorney General Jeff Landry.
“The Interior Department assessed program components that incorporate the interim guidance on social cost of carbon analysis from the Interagency Working Group, and delays are expected in new leasing for the oil and gas programs,” said Interior spokesperson Melissa Schwartz. “Work is actively ongoing to address these issues while the government appeals.”
She said the Bureau of Land Management “continues to process applications for permits to drill in a timely manner.”
The leasing lull has received the lion’s share of criticism, but the administration is pursuing other policies unfriendly to fossil-fuel development.
An Interior Department review released in November recommends increasing royalties on leaseholders to offset climate-change costs. The department has also proposed withdrawing federal leasing within a 10-mile radius of Chaco Culture National Historical Park in New Mexico, over the objections of Navajo Nation allottees.
In addition, the Biden administration’s America the Beautiful initiative seeks to conserve 30% of U.S. lands and waters by 2030, a measure decried by Republicans as a “land grab” that would limit areas available for oil-and-gas development.
In its filing on Lease Sale 257, the administration said it had discretion to determine whether to award the leases if the court reverses its ruling vacating the sale. API has filed a notice of appeal.
Louisiana also plans to appeal the ruling, even if the Biden administration refuses, said Landry spokesperson Cory Dennis.
“Yes, we plan to appeal. The government’s failure to do so is simply more evidence of its illegal ban on leasing,” said Mr. Dennis in an email. “We will continue to do everything possible to fight the Biden administration’s attack on the fossil fuel industry.”
Correction: The story has been clarified to show that Mr. Biden was referring to 9,000 permits to drill onshore on federal lands.
• Valerie Richardson can be reached at vrichardson@washingtontimes.com.
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