As a candidate, President Joe Biden never embraced the strict curbs on fossil fuel development that progressives sought, like a ban on fracking. But his climate plan included a clear pledge to halt any further advance of the oil and gas industry on federal lands or offshore.
“Banning new oil and gas permitting on public lands and waters” and “modifying royalties to account for climate costs” were two steps Biden said he would take if elected, to help put the nation on track to net-zero greenhouse gas emissions by 2050. Environmentalists were enthusiastic about these proposals because Biden wouldn’t need Congressional approval; the president could just invoke the Department of Interior’s broad authority to manage federal lands.
So green groups said they were deeply disappointed when Interior Secretary Deb Haaland released the roadmap for the future of federal oil and gas leasing the day after Thanksgiving. The document proposed little change beyond raising the fees that the industry must pay to extract resources on public lands and requiring companies to increase their insurance coverage—proposals already under consideration in Congress, although opposed by industry.
The Biden administration did not endorse any restrictions on new leasing or steps to address the greenhouse gas impact of drilling on federal lands.
“Our biggest criticism is simply that it basically ignores the elephant in the room, which is climate change,” said Joshua Axelrod, senior advocate for the Natural Resources Defense Council’s nature program.
He said the reforms proposed are indeed necessary—royalty rates have not changed since the 1920s—but they don’t go nearly far enough, at a time when the president says he wants every government agency to be acting to slash carbon emissions.
“We’re at a critical juncture on climate,” said Axelrod. “At the very least, it would have been nice to see some recognition of that, even if they didn’t propose any definite policy changes. The lack of it is a major disappointment.”
But some observers argue that from a climate perspective, the administration had little to gain and a lot to lose politically by going forward with a ban on new federal leasing at this time. Oil and gas from federal lands and offshore has become a smaller portion of U.S. production over the last 18 years, while drilling on private land has soared. A ban on new leasing would not make a significant dent in U.S. greenhouse gas emissions, they say, but it would stir up a political firestorm that would hurt Biden and other Democrats, especially in two swing states with substantial federal oil and gas leasing, New Mexico and Colorado.
“Oil and gas leasing has taken on a symbolic importance far beyond its actual climate value,” said Paul Bledsoe, who worked on climate policy in President Bill Clinton’s White House and now is a strategic advisor to the Progressive Policy Institute. He thinks the Biden administration’s decision to avert a showdown over leasing reflects a decision to spend its political capital on climate steps that will have greater impact, like the sweeping methane rules proposed in November and the investments in a transition to electric vehicles that are contained in the Build Back Better package now under consideration in the Senate.
A Complicated Political Landscape
As recently as 2003, one-third of U.S. oil and gas was produced on federal lands. By last year, federal production accounted for only one-quarter of the country’s oil production and just 11 percent of natural gas. The Interior Department’s Bureau of Land Management in October released a new analysis calculating that greenhouse gas emissions from federal oil and gas leasing added up to 1 billion metric tons annually, about one-fifth of U.S. energy-related emissions.
Environmentalists had hoped that the Interior Department’s next step would be to lay out policies to curb those emissions in the report that Biden ordered soon after taking office, in one of his first executive orders. Haaland sent the report to the White House in June, but it was delayed five months before its release on Black Friday—a move that some activists felt was uncomfortably reminiscent of President Donald Trump’s decision to bury news of the National Climate Assessment by releasing it the day after Thanksgiving in 2018.
Jeremy Nichols, climate and energy program director at WildEarth Guardians, said he was especially distressed at Haaland’s comments that the reforms proposed on royalties would help mitigate the climate crisis. “Calling this a climate report isn’t even exquisite spin,” said Nichols. “It’s just a flat-out lie.”
He said he believes that action to curb oil and gas drilling on federal land is an essential complement to other actions the Biden administration has focused on to reduce oil and gas demand.
“Yes, let’s do fuel efficiency. Let’s encourage electrification. But we need complete action,” Nichols said. “The Interior Department can play just an hugely outsized role, given how much fossil fuels they oversee, and how much carbon pollution is tied to that. They’re the one entity in the United States that can have the most impact on the supply side of the equation.”
But Biden faces a complicated political landscape, especially given the importance of federal oil and gas leasing in two Western swing states he won in 2020. New Mexico and Colorado rank second and third among states, behind Wyoming, in the number of federal oil and gas leases inside their borders.
After Biden imposed a moratorium on new federal oil and gas leasing while the program was being reviewed, New Mexico Gov. Michelle Lujan Grisham, a Democrat who is running for re-election in 2022, pressed the White House for relief from its provisions for her state. More than half of oil and gas development in New Mexico is on federal land, and she argued that a ban would push drillers across the state border to Texas, where private land in the same geological basin was more accessible. More than one-third of New Mexico’s state budget comes from oil and gas revenue, and she said her social programs would take a hit.
In June, a federal judge in Louisiana struck down the Biden leasing moratorium, ruling that the administration had failed to go through the needed notice and comment period.
Colorado, a state where the oil and gas industry generates $1 billion annually in state and local tax revenue, is where one of the most competitive U.S. House of Representatives races will be played out in 2022. A bipartisan independent redistricting commission set boundaries that seem to protect current House incumbents, but add a new 8th Congressional District in Denver’s northern suburbs. The new district is considered a toss-up with a slight Republican tilt, according to Cook Political Report. Even though Biden won Colorado by 13 points, the GOP now has an advantage in the only political battleground in that state in 2022. A Denver Post political columnist recently described the district as one where moderate candidates will have an advantage.
This is the sort of district where Democrats could be made vulnerable if Biden halted new oil and gas drilling, Bledsoe said.
“Most Americans are not spending their daily lives trying to decide where oil and gas comes from,” he said. “When they hear ‘oil and gas ban,’ they think it’s going to ban most oil and gas, not a small percent,” he said. “Republican opponents of climate action could use an oil and gas ban on public lands to undermine support for overall climate efforts. They have before. And I think that’s a major reason the administration hasn’t done it.”
He added, “No one will say that, but I do believe the propaganda value to the Republicans is high enough that it could hurt Democratic election chances in much of the country, and therefore undermine the ability of Democrats to protect the climate.”
In fact, next door to Colorado, Wyoming Sen. John Barrasso, the highest ranking Republican on the Senate Energy Committee, jumped on the Haaland proposal to raise royalty fees as a move that would raise costs for consumers and was tantamount to a ban.
“President Biden’s war on American energy is unrelenting,” Barrasso said. “This report shows the administration’s continued efforts to shut down American oil and gas production on federal lands and waters…. Shutting down energy production on federal lands will not fix climate change. It will just push production off federal lands, including to countries that have lower environmental standards than the United States.”
Environmental Groups ‘Exploring All Options’
Even though the Interior Department isn’t calling for the kind of shut-down that Barrasso describes, the Biden administration could still end up curbing oil and gas development on public lands in the way it manages the program. Higher royalty rates could discourage some developers from seeking to drill on public lands. And the Biden administration has pledged to increase the opportunity for public input on leasing—another opportunity to bring climate considerations to bear on decisions.
“In addition to seeking to restore balance to managing our public lands and waters, the report recommends a more transparent, inclusive, and just approach to leasing and permitting that provides meaningful opportunity for public engagement and Tribal consultation,” wrote Tyler Cherry, a spokesman for the Interior Department, in response to questions about the critiques from environmentalists.
“Analyses of the effects of greenhouse gas emissions are ongoing and will be incorporated in the Department’s planning and reviews as it moves forward with leasing consistent with court direction,” Cherry wrote.
The Bureau of Land Management announced in October that with upcoming lease sales planned in several Western states, the agency for the first time will analyze greenhouse gas emissions as part of the required environmental assessments, and will include calculations on the social cost of carbon.
But environmentalists said the Biden administration failed to adequately address climate considerations in its first big oil and gas lease sale—a record 80 million acres offered earlier this month for new drilling in the Gulf of Mexico.
The administration conducted an analysis that did not ignore climate change, but said that the sale, which will result in production of up to 1.12 billion barrels of oil and 4.4 trillion cubic feet of natural gas, would not have an impact on warming—a conclusion environmentalists have called “irrational.”
Environmentalists argue a rigorous analysis would have shown the sale would lock in greenhouse gas emissions for years to come. They said the administration then could have taken steps to limit the sale on that basis, even though the adverse court ruling in June obligated the sale to go ahead.
“The offshore sale was massive,” said Axelrod. “They did very little to pare it back to be right-sized for the moment.”
Nichols said that WildEarth Guardians is examining all options, including taking the path it did with the Trump administration—taking the Biden administration to court over its failure to address climate change.
“As much as it pains us to have to realize that we’re going to have to sue Deb Haaland,” said Nichols, “it seems like that’s an inevitability, given that the Interior Department seems dead-set on moving forward with opening the floodgates for more fossil fuel production.”