Key Democrats push Biden to reform, not end, oil and gas leasing on federal land

March 13, 2021

Democratic lawmakers and governors are calling for the Biden administration to reform the process of oil and gas leasing on federal lands without ending it.

President Biden promised a ban as one of his signature campaign pledges to help combat climate change but has so far only imposed an indefinite pause on issuing new oil and gas leases on federal lands and waters.

The pause has already met fierce backlash from the fossil fuel industry and states, including Democratic-led ones, that depend on revenue from oil and gas production to fund their budgets.

Now, the Interior Department’s announcement this week that it is planning to propose updates to the federal oil and gas program by early summer has provoked jockeying among the fossil fuel industry, politicians, and environmental groups as Biden decides whether to turn the pause into a ban.

“The sky is wide open for a variety of outcomes," said Erik Schlenker-Goodrich, the executive director of the Western Environmental Law Center. "A big part of that is whether or not the public lands oil and gas program will be wound down through a managed process or whether the program will simply be reformed."

Leaning toward reform

At the very least, Biden won’t revert to prior leasing practices that Democrats and environmentalists say are too deferential to the fossil fuel industry and not fiscally prudent.

House Democrats this week introduced a suite of legislation to raise royalty rates, increase public input into the leasing process, require cleanup and remediation of abandoned wells, and crack down on methane emissions from oil and gas.

In the Senate, Democratic Sen. Jacky Rosen partnered with Republican Sen. Chuck Grassley on legislation that would increase the royalty rate that companies pay to the government to drill on public onshore lands for the first time since the 1920s.

Together, the reforms proposed by Congress are consistent with the way the Interior Department described the goals of its review, which is to “restore balance on America’s lands and waters and to put our public lands’ energy programs on a more sound and sustainable conservation, fiscal and climate footing.”

“What Congress is presenting can go hand in hand with the reforms the administration puts forth,” said Mary Greene, public lands attorney at the National Wildlife Federation.

Greene noted that fiscal-related changes, such as hiking royalty rates to make it more expensive to develop oil and gas, would have to be enacted through Congress.

But the Interior Department on its own has broad discretion about how to manage public land and can decide to emphasize conservation or renewable energy development instead of oil and gas leasing. For example, it can require stricter environmental reviews, limit production in certain environmentally sensitive or nonproductive areas, and generally dictate where production spawning from new leases would occur.

The Interior Department released data this week showing that some of the leased federal land is banked by speculators without leading to immediate production. Of the more than 26 million acres of onshore land already under lease to the oil and gas industry, nearly 13.9 million of those acres are nonproducing.

New Mexico's Democratic governor speaks up

The momentum toward reform comes as Democratic Gov. Michelle Lujan Grisham of New Mexico, the state with the most oil and gas produced on federal lands, forcefully pushed back against Biden’s oil and gas leasing pause for the first time.

Lujan Grisham told the Albuquerque Chamber of Commerce on Wednesday that she is “clearly concerned” about the policy and warned it could undercut efforts by her state to cut emissions. She also floated the idea that New Mexico could get a waiver from the leasing pause if it can prove its success in “cleaning up the environment” and “curbing carbon emissions.”

Before this week, Lujan Grisham had tried to navigate carefully in responding to the leasing pause, as the oil industry has called for her to be more vocally opposed, while liberal lawmakers and climate activists have urged her to do more to transition New Mexico from fossil fuels to clean energy.

“The science indicates you've got to have a transition, not just for energy reliability, but in terms of how jobs move in that transition,” Lujan Grisham told the local chamber. “You have to have a long-term plan and investment strategy that does that.”

Legal questions abound

Supporters of reforming the leasing program say that, despite Biden’s campaign promise, the president does not have the legal authority to ban new oil and gas leases, a reality likely not lost on the administration, which has repeatedly emphasized the pause won't be permanent.

Greene and Schlenker-Goodrich cited a clause in the Mineral Leasing Act that specifically calls out oil and gas development as a use for public lands.

“They cannot categorically say we will never issue an oil and gas lease in the future,” Schlenker-Goodrich said. “Only Congress can do that. That does not mean oil and gas leases can proceed everywhere.”

But liberals are demanding more

Nonetheless, some liberals are urging Biden to follow through on his campaign promise and say he can execute an emergency mineral withdrawal to stop new oil and gas leasing entirely.

Rep. Jared Huffman, a California Democrat and a member of the House Select Committee on the Climate Crisis, said the administration should not resume issuing new leases if it’s serious about transitioning off fossil fuels.

“Granting new leases and opening up new areas is irreconcilable with a clean energy future,” Huffman told the Washington Examiner. “You aren’t going to have a transition if you don’t stop digging the hole deeper.”

Rep. Angelica Rubio, a liberal Democrat in New Mexico’s state House of Representatives, noted a leasing pause would not affect permitting of existing oil and gas leases, which can last for up to 10 years.

Rubio, who is pushing legislation to support the growth of a clean energy workforce to prepare for the decline of fossil fuels, criticized Lujan Grisham for floating the idea of receiving an exemption from the leasing pause, calling it premature and short-sighted.

By:  Josh Siegel
Source: Washington Examiner