In over 400 days of the Biden administration, President Biden has not held any legally mandated oil and gas onshore lease sales on Federal lands, and the only single offshore lease sale was invalidated by a federal judge, claiming that the sale did not appropriately consider climate change. The Biden administration has yet to challenge that court decision. Further, the Interior Department just announced it will not move forward with planned oil and gas lease sales in the Gulf of Mexico and Alaska’s Cook Inlet. According to the department, the Cook Inlet lease sale would not proceed due to insufficient industry interest and the planned sale of two leases, lease 259 and lease 261, in the Gulf of Mexico will not proceed due to contradictory court rulings on the leases. The Alaska lease would have covered more than 1 million acres that would provide oil for 40 or more years of production. These cancellations come when the national average price of regular gas hit an all-time high of $4.418 a gallon, according to AAA, and Americans are suffering under high inflation with the CPI increasing almost 15 percent since Biden took office.
Background
Under federal law, the Interior Department is required to adhere to a five-year offshore leasing plan, which was set to end at the end of June in the case of the affected leases. In January 2021, President Biden signed an executive order freezing all new oil and gas leasing on federal lands. Last summer, a judge struck down the ruling, prompting the Biden administration to appeal. (See below.) An offshore lease sale in the Gulf of Mexico was held on November 17, setting a record, but it was invalidated by a judge in January. Shell, BP, Chevron and Exxon Mobil offered $192 million for the rights to drill in the Gulf. Biden has not appealed that decision.
Are Biden’s Decisions Legal?
A federal attorney is arguing that President Biden legally called for suspending new oil and gas lease sales while considering their effect on climate change. Department of Justice attorney Andrew B. Bernie told a 5th U.S. Circuit Court of Appeals panel, the current offshore lease sale plan states specifically that the U.S. Secretary of the Interior “may reduce or cancel lease offerings on account of climate change.” He claimed that land-based sales “were not postponed by the executive order. They were postponed because of a need to comply with NEPA”—the National Environmental Policy Act.
Arguing for the 13 states that challenged Biden’s January 2021 order (Alabama, Alaska, Arkansas, Georgia, Louisiana, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Texas, Utah and West Virginia), Louisiana Deputy Solicitor General Joseph Scott St. John said laws passed in response to the 1970s oil crisis require lease sales and that the Biden administration failed to give a valid reason for postponing or canceling them. The state challenge to Biden’s order has not yet gone to trial but a federal judge blocked the order in a preliminary injunction, writing that since the laws did not state the president could suspend oil lease sales, only Congress could do so.
Onshore Lease Sales Scheduled by Its 5-Year Plan
Four onshore lease sales are so far scheduled next month—for land in Nevada on June 14; New Mexico, Oklahoma and Colorado on June 16; Wyoming on June 22 and Utah, Montana and North Dakota on June 28. However, the administration radically scaled back the amount of land originally on offer and raised royalty rates 50 percent from 12.5 percent to 18.75 percent, which is the amount usually charged for desirable deep water offshore leases. Leases less than 656 feet (200 meters) of water are charged the 12.5 percent minimum.
Conclusion
Biden has come under pressure to increase U.S. crude production as fuel prices spike because of his policies against oil and gas and the energy ramification of Russian sanctions due to its invasion of Ukraine. Oil companies have been reluctant to ramp up production due to Biden’s anti-oil and gas policies and because of difficulties getting workers, increased cost of supplies, difficulty in getting loans for new drilling investments and the uncertainty of whether today’s high prices will continue and for how long.
Biden is following along with his anti-oil and gas policies and his promise to not allow any new leasing, canceling the three offshore sales in the Gulf and off Alaska. These cancellations are another example of the administration’s opposition to oil and gas development in the United States. Biden speaks about the need for additional oil supplies, but his administration deliberately takes actions to stop more energy. The Biden administration tells the public of the need for more supply but acts to restrict it at almost every turn. As global energy prices continue to rise and as Americans are faced with soaring gasoline and diesel prices along with higher natural gas prices, the Biden administration needs to change its anti-oil and gas policies to provide certainty for the industry and to immediately act on a new five-year program for federal offshore leasing. Otherwise, Americans can expect energy prices and the CPI to continue to increase rapidly
West Virginia Senator Manchin is skeptical that Biden’s Interior Department plans to ever propose a new five-year leasing program this summer, as required by Congress. Manchin noted that he is looking for security for our nation and reliability for the energy we need for our nation, and the administration seems to be going the other way.
