Biden Orders A Pause To Federal Oil And Gas Leasing As Some Ponder Next Steps

Jan 27, 2021

A preliminary BLM map of June 2021 parcels available for a Q2 Lease Sale in Wyoming
Credit Bureau of Land Management

In an effort to address climate change, the Biden Administration handed down a series of executive actions including one that will pause onshore and offshore leasing of federal oil and gas. The majority of both oil and gas production in Wyoming occurs on federal land.

The order directs the Secretary of the Interior to halt new leasing "to the extent possible" and launch a rigorous review of existing leasing and permitting practices to fossil fuel development on public lands.

"The United States and the world face a profound climate crisis. We have a narrow moment to pursue action at home and abroad in order to avoid the most catastrophic impacts of that crisis and to seize the opportunity that tackling climate change presents. Domestic action must go hand in hand with United States international leadership, aimed at significantly enhancing global action," read the executive order .

The order does not affect energy companies' ability to take action on the millions of acres of land that's already been leased and not yet produced. Based on Bureau of Land Management (BLM) statistics in 2019, Wyoming producers still have roughly 4.8 million acres leased and available for production or roughly 53 percent of total federally-leased acreage.

The order is therefore not considered a drilling ban, but rather a moratorium on leasing. It also doesn't restrict energy activities on lands the U.S. holds in trust for tribes.

A wide array of organizations, including environmental groups, landowner groups, and progressive think-tanks, say the federal oil and gas leasing system is broken and in need of review pointing to low returns on leasing, impacts to wildlife, and remaining loopholes. A March 2019 analysis from the U.S. Government Accountability Office found only three of its 50 recommendations were implemented.

Jenny Rowland-Shea, senior policy analyst for Public Lands at the Center for American Progress, a progressive think-tank, said this review is a good first step towards addressing those concerns.

"The Trump administration had kind of a fire sale approach on public lands that the oil and gas industry got first pick of any public lands," she said. "I think that the Biden administration will take a look at what areas are most important for wildlife corridors for water or for wilderness and parks and what actually is the best use of the public lands."

John Rader, conservation advocate for the Wyoming Outdoor Council, agreed saying the Bureau of Land Management needs to consider uses for public lands outside of energy development.

"I would love to see the federal government lease and keep leasing outside of the most sensitive habitats for wildlife, "he said. "We'd like to see the federal government do that in coordination with our state wildlife agencies."

Much like the 60-day suspension made just a week ago, the move was met with vitriol from Wyoming leaders and energy interests citing economic injury and partisanship. Gov. Mark Gordon called the order punitive.

"It is disingenuous, disheartening and a crushing blow to the economies of many Western States, particularly Wyoming. No matter how it is framed, this action is still a ban on leasing," he said in a statement.

A report released last month, funded partially by the industry group Western Energy Alliance, found Wyoming stands to lose $2.3 billion annually in drilling investment over the next five years, if the leasing moratorium were to be made permanent.

Jim Willox, Converse County Commissioner, reiterated the impact of the executive order on an American Petroleum Institute press call.

"It is not a comprehensive energy policy. Rather, it is a job-killing, economically punishing policy that will increase our dependence on foreign energy at a time when we should be building and expanding our internal resources," he said.

Gov. Mark Gordon and Wyoming energy interests have teased the possibility of legal action in response to a drilling ban or leasing moratorium.

Keith Hall, a law professor with a focus on oil and gas leasing at Louisiana State University, said there are multiple legal paths opponents to the moratorium could take. He said they could argue the move needed congressional support, that the administration didn't have the authority for changes to resource management plans, or that it violates the Mineral Leasing Act.

"The Department of the Interior is supposed to promote the development of minerals as one of the multiple uses of federal land," he explained. "But if the Department Of the Interior is refraining altogether from the leasing, then they're not promoting the development of the mineral resources."

Hall went on to say that he wished the administration took a more nuanced approach to addressing climate change, saying he expects the U.S. to replace lost production with imported energy.

U.S. Senator for Wyoming John Barrasso echoed that he believes the moratorium would "do nothing to address climate change" and would deprive thousands of people in Wyoming their jobs while reducing revenue for public services.

Both Rowland-Shea and Rader took issue with moratorium opponents' rhetoric. Rader said the sky-is-falling language is a bit exaggerated.

"The oil and gas industry has been stockpiling both leases and approved permits to drill. For four years, industry has stockpiled about 13 million acres of undeveloped leases, and hundreds if not thousands of approved drilling permits," he said, citing BLM statistics.

The BLM currently has a preliminary map showing parcels available for sale in June of 2021.

Within its executive orders, the Biden Administration is also expected to direct federal agencies to coordinate investment and offer other efforts to assist communities reliant on coal, oil, natural gas, and power plants.