Biden administration hedges on resuming oil-and-gas leasing despite court ruling

Those waiting for the Biden administration to hold its first oil-and-gas leasing sale on federal lands may not want to hold their breath.
 
The Interior Department said late last week that it would continue “planning for responsible oil and gas development” after an appeals court lifted the block on its social-cost-of-carbon analysis, spurring reports that the administration would at long last resume open up federally owned land and maritime parcels for private energy development.

Interior spokesperson Melissa Schwartz issued a statement Friday praising the ruling, which effectively allows the government to factor in carbon emissions and the impact on the climate into its leasing decisions.
 
“We appreciate the U.S. Court of Appeals for the Fifth Circuit’s decision to grant a stay of the preliminary injunction related to the use of social cost of greenhouse gases,” she said. “Calculating the social cost of greenhouse gas emissions provides important information that has been part of the foundation of the work the Interior Department has undertaken over the past year. With this ruling, the department continues its planning for responsible oil and gas development on America’s public lands and waters.”
 
In other words, the department didn’t say that it would resume new leasing in response to the court decision, but it also didn’t say that it wouldn’t.

The Interior Department is nearing five consecutive quarters without holding an onshore leasing sale – and only one offshore sale primed by the Trump administration – as pressure builds for President Biden to unleash domestic production on federal lands and waters to combat soaring gas prices and the market disruptions caused by the Russian war in Ukraine.

The department has put off leasing auctions as it addresses what it calls “significant shortcomings” in federal oil and gas programs, prompting court battles with red-state officials led by Louisiana Attorney General Jeff Landry anxious to spur new private energy development on the vast federal holdings.
 
Last month, the department said it anticipated delays in new leasing sales after a federal court blocked the administration from using its raised social-cost-of-carbon estimates in regulatory decision-making. In a decision last Wednesday, however, the Fifth Circuit Court of Appeals lifted the injunction, removing what the administration had identified as the latest barrier to drilling auctions.
 
Asked if an onshore or offshore leasing sale would be held in the second quarter of 2022, the department had no comment.

Cory Dennis, a spokesman for Mr. Landry, accused the administration of using the social-cost-of-carbon [SCC] ruling as a pretext for postponing new production on federal lands and waters.
 
“The federal government stated in open court that these SCC numbers weren’t being used. Then, after the court blocked its use of the numbers, the government suggested the injunction was the cause for the delay in sales,” said Mr. Dennis in a Monday email. “The hypocrisy is astounding. President Biden has made it crystal clear he will do anything to crush the oil and gas industry, cripple the poor and working class, and increase our dependence on foreign oil from people that hate us.”

Walking a ’fine line’

Kathleen Sgamma, president of the Western Energy Alliance, said that the department is “walking a fine line on leasing,” citing a federal judge’s order in June halting the administration’s “pause.”
 
“They’ve been dishonestly reporting to the judge that overturned the leasing ban that they’re ‘working’ on leasing, as if activity were the same as actually accomplishing something,” she said in a Monday email. “Now that the SCC excuse has been removed, they’re now ‘planning.’ The leasing ban continues to be in effect since there hasn’t been a single onshore lease sale since Biden took office, which means they continue to defy the judge’s order.”

Under the Mineral Leasing Act, the federal government is required to hold quarterly leasing sales when eligible lands are available.
 
Frank Macchiarola, American Petroleum Institute senior vice president of policy, economics and regulatory affairs, urged the administration in a Friday statement to encourage domestic production.
 
“At a time when the administration and allies around the world are calling for more American energy, we welcome the Department of the Interior’s announcement today and urge the administration to hold onshore lease sales under the Mineral Leasing Act with sufficient acreage and fair terms,” he said. “We also call on the administration to accelerate the long-delayed five-year program for leasing on the Outer Continental Shelf.”
 
In its November report, the department identified “significant deficiencies” in the federal leasing program, and recommended increasing royalties and taking stronger steps to protect the environment and wildlife.
 
“The Interior Department has an obligation to responsibly manage our public lands and waters — providing a fair return to the taxpayer and mitigating worsening climate impacts — while staying steadfast in the pursuit of environmental justice,” said Interior Secretary Deb Haaland in a Nov. 26 statement.