Biden temporary pause on federal oil leases sets stage for future restrictions

President Biden on Wednesday issued an executive order temporarily pausing federal oil and gas leases and setting in motion potentially longer-lasting restrictions on federal lands production of fossil fuels. 

The executive order issued Wednesday directed the Interior Department to pause the leases while it reviews the program and consider whether to adjust how much money companies pay to the government to extract coal, oil and gas offshore. 

Republicans and industry bashed the move as a job killer, while environmentalists praised it as a first step and some also questioned how impactful the immediate action will be. 

In the order, Biden said the department should pause the leases “to the extent consistent with applicable law” and that they should be halted “pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices.”

The order also called for consideration of whether to adjust coal oil and gas royalties or “other appropriate actions” to account for climate change impacts. 

“We’re going to review and reset the oil and gas leasing program,” Biden said before signing the orders. “We’re going to start to properly manage lands and waterways.”

He also reiterated that he would not ban fracking, a controversial method of extracting fossil fuels from rocks that has been linked to water contamination. 

In Wednesday’s order, Biden doubled down on his campaign pledge to modify royalties to account for climate costs but didn’t go as far as “banning” new oil and gas permitting on public lands and waters, which he also said he would do on the campaign trail.

The action also took some action to reduce fossil fuel subsidies by directing agencies to ensure that “federal funding is not directly subsidizing fossil fuels” and telling the White House budget office not to include subsidies from future budget requests. 

Biden said on the campaign trail that he wanted to eliminate subsidies to the industry, but this could require congressional action. 

He received nearly immediate pushback from industry, as the Western Energy Alliance filed a lawsuit over the executive order. 

“Biden’s ban is an overreach meant to satisfy the environmental left, but it would seriously harm the livelihoods of tens of thousands of westerners and put at risk millions more as state services become unfunded,” the group’s president, Kathleen Sgamma, said in a statement, citing figures from the Wyoming Energy Authority.

Others in the industry expressed concern about the fact that the pause did not appear to have an end date.

“A moratorium without a deadline sends a chilling effect to folks who are seeking to produce energy in the United States,” said Frank Macchiarola, senior vice president of policy, economics and Regulatory Affairs at the American Petroleum Institute.

And Sen. Cynthia Lummis (R-Wyo.) launched a long-shot bid to restrict the White House from preventing new leasing without congress’s approval. 

Conservationists pushed back on the assertions that jobs would be lost by the measure in the short term. 

“The oil industry is really crying wolf here,” said Jesse Prentice-Dunn, policy director at the Center for Western Priorities. “The industry has spent years stockpiling leases and drilling permits…the industry can keep on drilling and keep on using their existing wells.”

In a statement on Wednesday, the Interior Department said that the oil and gas industry currently has 7,700 unused approved permits to drill. 

It said that onshore more than half of the acres leased to industry and offshore more than three-quarters of the acres leased to industry are not being used for production. 

And John Kerry, the White House’s climate envoy, argued in a press briefing that in the long term, the fossil fuel industry is declining. 

“Coal plants have been closing over the last 20 years. So what President Biden wants to do is make sure those folks have better choices, that they have alternatives, that they can be the people who go to work to make the solar panels,” Kerry said on Wednesday. 

“Unfortunately, workers have been fed a false narrative … for the last few years. They’ve been fed the notion that somehow dealing with climate is coming at their expense. No, it’s not. What’s happening to them is happening because of other market forces already taking place,” he added.