On January 27, President Joe Biden issued an executive order calling for a pause on new oil and gas leases on federal lands and waters. As a result, the Department of the Interior canceled its first- and second-quarter oil and gas lease sales and has not held a third-quarter sale. A dozen or so states subsequent to the pause sued the Biden administration. In June, Judge Terry Doughty of the U.S. District Court for the Western District of Louisiana ruled to block the pause on leasing because the states that sued established they would suffer injury from the pause on new oil and gas leases and noted that federal laws required the lease sales. Since Biden’s Interior Department showed no movement to schedule a lease sale in violation of the court’s order, those states sought yet another court order from the judge to force the Department to hold an offshore lease sale this year. The Biden administration has now challenged the federal judge’s decision to block the pause on oil and gas leasing on public lands and waters, but said it will proceed with leasing during the appeals process.
Those actions were followed by a dozen oil, gas and extraction-related industry groups also suing the Department of Interior over the pause on new federal oil and gas leases, asking a federal court to vacate the pause because the Biden administration’s “leasing moratorium” violated various federal laws. The laws included the Administrative Procedure Act, the Mineral Leasing Act, and the National Environmental Policy Act because officials did not “take the necessary hard look at the potential environmental impacts before its implementation.”
According to the trade groups, their members are “significantly harmed” by the leasing pause, having “invested millions of dollars in acquiring and exploring federal oil and gas leases in reliance that adjacent tracts needed to complete the development of an oil and gas prospect would be available for lease in scheduled or statutorily mandated lease sales. If operators cannot obtain access to these additional leases necessary to complete development, their substantial investment is substantially diminished or may be lost entirely.” The leases are especially important for companies active in deepwater drilling. Perhaps that is why on August 23, the Biden administration said it would take steps to restart the federal oil and gas leasing program and it was planning to hold a Gulf of Mexico auction in October.
Interior Secretary Deb Haaland said earlier this year that the Interior’s review of the leasing program would be released in the “early summer” but it has not yet been published. In late July, Secretary Deb Haaland indicated that the Interior’s review would be released “very soon.”
Longer-Term Consequences of a Ban
Many negative consequences result from a ban on federal leasing on natural gas and oil development on public lands and waters. An analysis of the issue projects that a ban would shift the United States to foreign energy sources, cost nearly one million American jobs, increase carbon dioxide emissions and reduce revenue that funds education and key conservation programs. U.S. GDP would decline by a cumulative $700 billion through 2030. Over $9 billion in government revenue, including funding for state education and conservation programs would be lost. Nearly one million jobs would be lost by 2022, with top production-states suffering significant losses:
- Texas would lose nearly 120,000 jobs.
- New Mexico would lose over 62,000 jobs.
- Wyoming would lose over 33,000 jobs.
The U.S. oil and gas industry supports 10.3 million jobs, with workers making an average salary of $101,181. Workers in the solar and wind industry, on average, make half that amount.
By 2030, offshore production for natural gas would decrease by 68 percent and for oil by 44 percent. U.S. oil imports from foreign sources would increase by 2 million barrels a day. The United States would spend $500 billion more on energy from foreign suppliers through 2030. Coal use would increase by 15 percent by 2030 and carbon dioxide emissions would increase by an average of 58 million metric tons to represent a 5.5 percent increase in the power sector by 2030. This effort thus appears to be all pain, with no gain, despite claims by the Biden administration to the contrary.
Conclusion
Restricting the development of oil and gas drilling on federal lands and waters is nothing more than an “import more oil” policy, which benefits OPEC and Russia, not American families. In fact, the Biden administration was begging OPEC to produce more oil on August 11, while preparing its appeal to the courts to continue its leasing moratorium. The Biden administration actions against American produced energy is leading the United States toward 1) more reliance on foreign energy from countries with lower environmental standards, 2) losses of hundreds of thousands of good-paying jobs, 3) billions in reduction in government revenue for education and conservation programs, and 4) higher energy prices for Americans. This policy is a “lose-lose” proposition for Americans.
