Monday, August 8, 2022

Biden Suspends Leases for Fossil Fuel Development on Federal Lands

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Joe Biden will order the suspension of the new federal leasing for fossil fuel development and examine how permits and leases were awarded under the Trump administration, in a series of executive actions aimed at igniting a revolution in the world. clean energy in the United States.

In an executive order to be signed Wednesday, Mr Biden orders the Home Secretary to “suspend” new leases “to the extent possible” and to conduct a “careful review” of existing rental and rental practices. authorization of fossil fuels.

The decision stops long before an outright ban on drilling or hydraulic fracturing on federal lands is ordered.

The White House said Mr Biden was keeping his “pledge to take aggressive action to tackle climate change,” with orders coming in for what it had designated as “climate day.”

The president will also direct government agencies to procure U.S.-made zero-emission vehicles for their fleets, in accordance with Mr. Biden’s U.S. purchase order, and notify the director of national intelligence to prepare an estimate of security implications of climate change.

It is also committed to meeting new conservation goals, the creation of a civilian “climate body” and new efforts to revitalize communities dependent on oil, gas and coal.

Mr Biden will also order federal agencies “to eliminate fossil fuel subsidies in accordance with applicable law” – although legal experts have said it would be difficult.

“The president cannot unilaterally change the statutes on the books or erase the fossil fuel subsidies that Congress has written into law,” said Jonathan Adler, professor of environmental law at Case Western Reserve University, in Ohio. “As with anything the Biden administration wants to do on the climate, really meaningful change will require action from Congress.

The suspension of leases by oil and gas companies on federal lands fulfills a great election promise from the president and marks his most significant gesture against the industry after campaigning for a “transition away from oil.”

This marks a radical change from the previous administration. As Mr Trump sought to undo restrictions on oil and gas producers, Mr Biden has turned the fight against climate change at the heart of his candidacy for the White House.

On his first day in office, Mr Biden took steps to join the Paris climate agreement and scrapped a permit for the controversial Keystone XL pipeline.

Wednesday’s order will apply specifically to federal lands and waters, which account for about 22% of U.S. oil production, most of it from offshore wells in the Gulf of Mexico. It does not affect activity on private land, which accounts for the bulk of US oil and production.

Some industry analysts downplayed the importance of the lease suspension, saying the decision not to include new permits in the ban would mitigate some of the fallout in states like New Mexico, where federal lands and waters represent a large part of oil production.

“The Biden administration now has a better understanding of the scale of the implications for New Mexico,” said Artem Abramov, head of shale research at Rystad Energy.

Rob Black, president of the New Mexico Chamber of Commerce, disagreed, predicting ahead of time that the economic impact on the state would be “devastating” and that production would simply shift elsewhere.

“We don’t believe that a ban on federal oil and gas leases will actually help reduce carbon emissions,” said Mr. Black. “What it will do is transfer what would have been federal and state tax revenues to private landowners in Texas and other countries like Saudi Arabia, Russia and Iran.”

Any effect on overall U.S. oil and gas production from the new lease suspension is unlikely to be felt for a few years, analysts said, as many operators had sourced leases and permits. in anticipation of the decision. The move could even fuel a rush to deploy platforms as operators tried to use existing permits.

“We anticipate increased drilling and completion activity on federal lands in the coming months, as operators attempt to drill as many of their permits as possible before they expire,” said Parker Fawcett, analyst at S&P Global Platts .

After a two-year period of increased activity on federal lands, production would begin to drop, Fawcett added.

Wednesday’s executive order follows a 60 day freeze on a new activity mandated as a palliative by the Department of the Interior the day after Mr. Biden took office.

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