Administration Regulatory Hurdles Halting Energy Development

While the Biden administration consistently claims it has made emissions reduction a significant priority, its actions behind the scenes with permitting delays, a rapid decline in oil and natural gas leases, and other regulatory roadblocks tell a different story.

These backlogs are obstructing growth across the energy value chain and preventing progress on the very low-carbon goals the administration has claimed to support.

Delaying Offshore Leasing

The Department of the Interior announced Wednesday  that it will not issue the next five-year offshore oil and gas leasing plan until December. Reminder: this past summer, Interior allowed the existing five-year offshore leasing program to expire without having a new plan in place for the first time in history.

In response to this news, Sen. Joe Manchin (D-W.Va.) “castigated” the Biden administration for following a “radical climate agenda” rather than prioritizing America’s “national energy needs:”

The Washington Examiner reports more on Sen. Manchin’s comments:

“What is even more terrifying is that on top of this disturbing timeline, Interior refuses to confirm if they intend to actually include any lease sales in the final plan…”

This next chapter in delay exacerbates the Biden administration’s already incredibly slow progress on leasing. A Wall Street Journal analysis previously found that the current administration has “leased fewer acres for oil-and-gas drilling offshore and on federal land than any other administration in its early stages dating back to the end of World War II.”

It’s also important to note that the issuing of offshore permits not only affects the oil and gas industry, but also impacts offshore wind permits. Due to stipulations in the Inflation Reduction Act (IRA), the DOI must hold offshore oil and gas lease sales in order to hold offshore wind sales.

The oil and gas industry has also made it clear that permitting reform and increased domestic production is needed in order to meet national energy needs. In recent testimony during a House Natural Resources Committee, IPAA emphasized this need, while warning against including no new lease sales, as the DOI has signaled:

“A ‘leasing program’ that has the potential to offer no lease sales is not a leasing program; it is a federal mandate to end offshore oil and natural gas production in the United States. It is also not in the best interest of Americans who benefit from the increased revenue to the federal treasury and significantly harms American national security.” (emphasis added)

Halting Carbon Capture in its Tracks

In addition to oil and gas leasing, the Biden administration is also halting progress on key emissions reduction programs by delaying Carbon Capture and Sequestration (CCS) permitting. While the administration boasts about new tax credits that promote carbon capture with the passage of the IRA, these incentives are meaningless if developers are unable to actually implement projects.

As EID has explained, the EPA has only approved one Class VI injection well permit since President Biden took office, despite bipartisan support from Republicans, Democrats, the administration itself, and energy producers across the value chain, and more than 40 wells remain pending with the EPA.

Additionally, over the past two years, the EPA hasn’t granted a single application for state primacy over Class VI injection wells which would dramatically help boost progress on CCS, despite dedicated funding and support for this effort in President Biden’s signature legislation:

“The Biden-Harris Administration is committed to supporting states’ efforts to obtain Class VI primacy.”

Most notably, Louisiana’s primacy application has been under review for more than 500 days – leading business and trade organizations across the state to pen a letter to the EPA this week expressing concern over this hold-up.

“Louisiana has responsibly administered the other five classes of the Safe Drinking Water Act’s underground injection well program and has the expertise and experience necessary to efficiently manage the EPA’s Class VI wells for carbon storage.”

This comes on the heels of another letter from Gov. John Bel Edwards expressing frustration over the permitting process and its effect on chilling investment in the state:

“More information on the progress of Louisiana’s Class VI application would help encourage potential CCS operators to make firm investment decisions.”

Permitting Issues Across the Economy

Energy projects across the country – including grid transmission lines, natural gas pipelines, as well as wind and solar farms – are also facing significant permitting delays. On Monday at CERAWeek, White House Energy Advisor John Podesta recognized these issues when he stated:

“The permitting process for clean energy infrastructure, including transmission, is plagued by delays and bottlenecks. To be sure, plenty of delays happen at the state local level and those need to be addressed. But there’s plenty that we can do and must do federally.” (emphasis added)

This is yet another case of the administration’s actions not meeting their words. But the implications of inaction are too high: if energy projects are not approved in a timely manner, stated emission reduction goals won’t be met, Americans will continue to face higher energy costs, and our country’s energy security will be threatened.

Bottom-line: To unlock energy potential across the value chain, the Biden administration must begin taking permitting reform seriously. This includes fast-tracking Class VI permits, holding on-and-offshore lease sales, and cleaning the regulatory sludge that is plaguing all sectors.

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