Biden Admin Acknowledges Suspending New Federal Permits Is Only the Beginning Despite Potentially Significant Consequences
Only a day after taking office, the new Biden administration announced a temporary suspension of new drilling permits on federal land and foreshadowed further efforts to place a moratorium on leasing. Though not unexpected, the move is a shot across the bow for energy producers across the country, and particularly in states with prolific federal lands development like New Mexico.
Acting Secretary of the Interior Scott de la Vega issued Secretarial Order No. 3395 that temporarily suspends delegations of authority regarding leasing and permitting on federal lands, with a significantly reduced staff able to approve such items. This order does not halt leasing or existing development, and at its face is a temporary measure, but is certain to create bottlenecks that last well-beyond the 60-day limit on the order.
According to a release from Interior:
“…the Order does not impact existing ongoing operations under valid leases and does not preclude the issuance of leases, permits and other authorizations by those specified. In addition, any actions necessary in the event of an incident that might pose a threat to human health, welfare, or safety will continue.”
“White House Press Secretary Jen Psaki said Wednesday the administration still has a commitment to ending new oil and gas leasing on federal lands, without elaborating on the president’s plans. ‘We do, and the leases will be reviewed by our team,’ Psaki said.”
A Fracking Ban Would Have Devastating Consequences
As EID has previously written, banning production on federal lands would result in higher energy prices and thousands of lost jobs across much of the country while doing little to reduce emissions. By the end of President Biden’s first term, a fracking ban on federal lands would result in $19.6 billion in lost wages, 72,815 fewer jobs annually and $10.8 billion in fewer tax revenues across Alaska, California, Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming, according to a recent Wyoming Energy Authority study. After the release of the study, Wyoming Governor Mark Gordon (R) did not mince words about the threat a leasing ban posed to his state:
“A federal leasing ban would be a serious threat to our state’s economy. The revenue challenges that we currently face would be further exacerbated by any misguided federal policies that unfairly target states with large swaths of federal land.”
And as the Ute Indian Tribe of the Uintah and Ouray Reservation said in a response letter, the impacts would also be significant for tribes that “rely on energy development to fund our governments and provide services to our members.” Ute Tribe Business Committee Chairman Luke Duncan continued:
“Your order is a direct attack on our economy, sovereignty, and our right to self-determination. Indian lands are not federal public lands. Any action on our lands and interests can only be taken after effective tribal consultation.
“Order No. 3395 violates the United States treaty and trust responsibilities to the Ute Indian Tribe and violates important principles of tribal sovereignty and self-determination. Your order was also issued in violation our government-to-government relationship, Executive Order No. 13175 on Consultation and Coordination with Indian Tribal Governments, and Interior’s own Policy on Consultation with Tribal Governments.
“The Order must be withdrawn or amended to comply with Federal law and policies.”
As University of Wyoming Professor and WEA study author Tim Considine explained:
“Even if in the unlikely event a leasing moratorium or a drilling ban were to reduce emissions, they would be achieved at great cost. There are many cost-effective technologies and strategies to reduce greenhouse gas emissions. Restricting development of oil and gas on federal lands is not one of them.”
What are they saying?
Given all of this, it’s unsurprising that the order and discussions of a leasing moratorium were met with quick response. Lawmakers from many energy-producing states have released strong statements criticizing the Biden administration’s aggressive approach.
In an interview yesterday, Senate Energy & Natural Resources Committee Chairman Joe Manchin (D-WV) said:
“As chairman of @EnergyDems I will work with the Biden administration to ensure we can meet America’s energy needs while addressing climate change responsibly. That means innovation – not elimination.”
Sen. Cynthia Lummis (R-WY) tweeted:
“Make no mistake about it, the Biden Ban is a strike on the heart of Wyoming jobs, families and communities. His actions to appease the radical left will be borne disproportionately on the shoulders of states like Wyoming with high amounts of federal lands. This unilateral action will kill jobs, raise gas and energy prices, and further harm our ability to fund our schools, roads, hospitals, and other critical infrastructure. The price of this ban is simply one the people of Wyoming cannot afford.”
Rep. Yvette Herrell (R-N.M.) tweeted that she will be working on legislation to push back on ban measures:
“This 60-day fracking ban cannot be allowed to become a permanent ban. I’ve cosponsored @RepPfluger’s Saving America’s Energy Future Act to prevent the Biden admin from placing a moratorium on new oil & gas leases on federal land.”
Sen. John Barrasso (R-WY) said in a tweet that the Biden administration “was off to a divisive & disastrous start”:
“Wyoming & other western states have oil & gas lease sales scheduled. Several of these lease sales will be held in the next sixty days. Slowing these projects down will kill jobs for hardworking Americans & reduce a critical source of revenue to states like Wyoming. As the nation recovers from the COVID-19 pandemic, @POTUS is handing out pink slips on day one.”
Rep. Kelly Armstrong (R-ND) also responded on Twitter:
“The Biden ban will:
X Eliminate more than $11 billion annually going to schools, hospitals, roads and conservation
X Destroy more than 380k jobs
Banning responsible energy development is bad for North Dakota and bad for the country.”
The order also affects offshore drilling in the Gulf of Mexico. Rep. Clay Higgins (R-La.) said that Biden was “weaponizing the federal government”:
“The Biden moratorium will destroy thousands of oil and gas jobs, raise energy costs, and increase reliance on foreign energy… Further, sending oil and gas production overseas to nations with horrible ecological records is the worst thing we can do for the environment. It’s not just bad for America, it’s bad for the world.”
And in Alaska, where energy production in non-wilderness areas of ANWR was also blocked by executive order, Sen. Lisa Murkowski (R) released the following statement:
“At a time when the United States, and especially Alaska, is struggling to deal with the impacts of COVID-19, I am astounded to see that the Biden administration’s “day one” priority is put our economy, jobs, and nation’s security at risk. Not only has Alaska proven time and time again we have the highest environmental standards when it comes to our responsible resource development but this right was guaranteed by the federal government more than 40 years ago when ANILCA was enacted. It is time to hold true on this long overdue promise.
Murkowski’s release was accompanied by statements from Sen. Dan Sullivan (R):
“Let me be clear: As we are struggling to rebuild our economy, these directives announced today will cause real harm to millions of Americans, and thousands of Alaskans. Jobs will be lost. Families will struggle. Futures will be imperiled. The American people did not give President Biden a mandate to kill good-paying jobs and curry favor with coastal elites, and I will do everything in my power—working with the delegation, the state, and all of my fellow Alaskans—to fight back against these job-killing orders and regulatory reviews.”
Industry groups at the state and federal level blasted the order, stressing the negative impacts it would have on state economies. New Mexico Oil and Gas Association President Ryan Flynn reiterated the severe impacts the measure will have on the state’s economy:
“Oil and gas development on federal lands is a critical part of New Mexico’s economy, and restricting activity here risks the loss of more than 60,000 jobs and $800 million in support for our public schools, first responders, and healthcare services. New Mexico’s oil and gas producers are fully committed to fighting climate change and stand ready and willing to work with the Biden administration to drive environmental progress and keep responsible energy production moving forward across our country.”
The Independent Petroleum Association of America stressed the economic losses of the order would cause. According to Dan Naatz, senior vice president of government relations and political affairs for IPAA, would “decimate jobs and economic development in communities across the country”:
“In their never-ending desire to placate the environmental community, the Democrats are not only willing to destroy the economies of many western states and the Gulf Coast, but also impact world markets. All a leasing ban will do is shift production to Saudi Arabia and Russia, which have far less-stringent environmental controls than American producers.”
American Petroleum Institute President and CEO Mike Sommers agreed, saying that restricting development on federal lands would not only threaten thousands of jobs, but would also force the country to import more energy from countries with lower environmental standards:
“With this move, the administration is leading us toward more reliance on foreign energy from countries with lower environmental standards and risks to hundreds of thousands of jobs and billions in government revenue for education and conservation programs. We stand ready to engage with the Biden administration on ways to address America’s energy challenges, but impeding American energy will only serve to hurt local communities and hamper America’s economic recovery.”