Republican States Are Pushing Back Against Biden’s Oil Lease Suspension

By Felicity Bradstock

In January, Biden’s new administration called for a suspension of all new oil and gas leases as part of its efforts to drive forward climate change policies. But several states are fighting back in support of the oil industry.  Last week, 13 states sued the current administration to put an end to the new oil and gas lease suspension on federal land, in the hope of rescheduling leases in the Gulf of Mexico, Alaska waters and western states.

The republican-leaning states wants to reinitiate canceled leases that were scheduled in the Gulf of Mexico for March 17, as well as a planned lease sale in the Cook Inlet of Alaska. Other suspended leases in Wyoming, Utah, Colorado, Montana, Oklahoma, Nevada and New Mexico have also been called into question.

In the lawsuit, Biden’s government is accused of avoiding the required notice and comment periods needed for the suspension to go ahead. The suit also blames Biden for harming the coastal oil economy, reducing oil revenues that could be put towards climate change projects such as coastal restoration.

While several praised Biden’s efforts to address climate change early in his time in office, the lack of end date given to the suspension has left thousands in the oil sector worried about the security of the industry.

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Louisiana Attorney General Jeff Landry stated, “Biden’s Executive Orders abandon middle-class jobs at a time when America needs them most and put our energy security in the hands of foreign countries, many of whom despise America’s greatness”.

Biden has already come under fire this year by many Republicans and oil firms for the cancellation of the 830,000 bpd Keystone XL pipeline, which led to thousands of pipelayers losing their jobs.

The Energy Information Administration has suggested that while the pause will have no immediate effect, from 2022 we could be seeing a decrease in production of around 100,000 barrels of crude oil per day.

 

In a virtual meeting last week, White House national climate adviser Gina McCarthy was adamant that Biden’s administration “is not fighting the oil and gas sector”. McCarthy suggests that the U.S. oil industry became far too used to ex-President Trump’s pro-oil mentality and needs to accept the change in administration and increased focus on climate change.

Earlier this month, the Democratic party introduced a new bill to the House of Representatives Energy and Commerce Committee which seeks to achieve party commitments to decarbonize the electric grid by 2035.

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CLEAN, the Climate Leadership and Environmental Action for our Nation’s Future Act, sets an objective of 80 percent clean electricity by 2030 and 100 percent by 2035. It also presents the goal of a fully decarbonized economy by 2050.

The bill also outlines plans to expand electric vehicle (EV) infrastructure over the next decade. Under the bill, we would see an investment of $100 million a year between 2022 and 2031 to provide publicly accessible EV supply equipment, as well as investing heavily in EV access for disadvantaged communities.

While some are critical of Biden’s pause on oil and gas, others have stated their support of his climate change action. During last week’s virtual meeting, several oil and gas CEOs vowed greater collaboration with Biden in his fight against climate change, including praising his return to the Paris climate agreement.

Many remain in wait-and-see mode as the president has not yet set a date for the end of the suspension on new oil and gas leases. However, communication with some of the industry’s largest firms points towards a greater effort to work with Biden in the combat of climate change going forward in oil and gas.

By Felicity Bradstock for Oilprice.com

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