Under a settlement agreement with environmentalists, Federal regulators will review oil and gas leases going back to 2019 to see whether their impact on climate change was properly addressed and to consider the social cost of greenhouse gas emissions in the analysis. The Biden administration agreed to review 56,000 acres of oil and gas leases in Montana and North Dakota issued by the Trump administration in 2019 and 2020. Federal law requires agencies to consider climate change in their environmental reviews before approving projects, but the law is not specific on how the analysis should be conducted.
This precedent can now be cited to require future lease sales to include a more thorough study and further delay. The agreement also requires taxpayers to pay the legal costs incurred by the groups who sued. It is a return to the practice of “sue and settle,” where a group politically aligned with the administration sues and the government “throws in the towel” on the lawsuit, accepting additional burdens on domestic energy production.
It is another anti-oil and gas position that the Biden administration is taking to try to end fossil fuel production in the United States despite the dire need globally for reliable energy. The energy crisis in Europe is so bad that energy rationing is expected this winter. According to a study from the Institute for Health Metrics and Evaluation, in 2019, cold temperatures killed nearly four times as many people as warm temperatures.
Upon taking office, President Biden put a hold on federal oil and gas lease sales, indicating that he wanted the program reviewed. A federal judge in Louisiana, however, ruled the administration was violating U.S. energy laws by withholding lease sales, forcing the Biden administration to resume leasing on federal lands and waters. In November 2021, an offshore oil and gas lease sale was held, but was overturned by a judge in January 2022 for not adequately considering climate change. The Biden administration did not challenge the ruling. The Biden administration then canceled 3 offshore lease sales in the Gulf of Mexico and Alaska, indicating there was lack of interest. In June 2022, the Bureau of Land Management (BLM) auctioned off 125,000 acres for oil and gas drilling in Colorado, Montana, New Mexico and Wyoming.
Through August 20, Biden’s Interior Department leased 126,228 acres for drilling, which was down 97 percent from the first 19 months of President Trump’s term. Going back to prior Presidencies, the 203 leases under President Biden amount to just 3.2 percent of what all the Presidents from Dwight Eisenhower to Donald Trump awarded on average in their first 19 months.
Meanwhile, environmental groups including the Sierra Club and the Center for Biological Diversity, have been challenging the legality of past oil and gas lease sales with mixed results. In 2020, a federal judge in Washington DC ruled that BLM failed to adequately consider the cumulative impact of oil and gas leasing on over 300,000 acres of federal land in Wyoming, ordering drilling to stop. But, more recently, the D.C. Circuit Court of Appeals ruled that the Bureau of Ocean Energy Management, which manages offshore oil and gas leasing, had largely done its job on the climate review ahead of a 2018 lease sale in the Gulf of Mexico—but ordered that some safety issues be addressed before moving ahead.
Lease Sales Requirement in the “Inflation Reduction Act”
Not only does federal law require lease sales, but Senator Joe Manchin insisted that the so-called “Inflation Reduction Act” require the lease sales that the Biden administration canceled from the 2017 lease plan be held and that the November 2021 offshore lease sale be reinstated. Specifically, the offshore lease sale held in November 2021 (Lease Sale 257) must be reinstated with high bidders receiving their leases, and canceled lease sales 258, 259, and 261 in the Gulf of Mexico and offshore Alaska must be held by specified dates all occurring by September 30, 2023. Shell, BP, Chevron and Exxon Mobil offered $192 million for the rights to drill in the Gulf of Mexico in the November 17, 2021 lease sale—the largest offshore oil and gas lease sale in the nation’s history.
The so-called ”Inflation Reduction Act” also requires the Interior Department to hold periodic oil and gas lease sales and offer at least 60 million acres of offshore parcels and 2 million acres onshore during the prior year before it can approve any renewable energy leases.
The Biden administration is on the anti-oil and gas warpath again as it gladly accepted an agreement with environmentalists to review Trump-era lease sales for their impact on climate change and to consider the social cost of carbon emissions in that review. The social cost of carbon is currently around $51 per metric ton of carbon dioxide emissions, but a recent analysis by the environmental group Resources for the Future projects it to be $185 per metric ton. The review covers 56,000 acres in Montana and North Dakota. The settlement blocks drilling on the tracts leased by the Trump administration in 2019 and 2020 until the Bureau of Land Management completes its review. Since Congress has not specified what agencies need to do to meet their obligation on climate, judges are left to decide whether projects can move ahead on a case-by-case basis.
The Biden administration has not challenged these rulings because it continues with its war on fossil fuels and its desire to eventually eliminate them despite the global need for them. Europe is under an energy crisis that has been exacerbated by the Russian invasion of Ukraine and Russia’s use of natural gas as a weapon in retaliation for sanctions that the West has imposed. Russia has cut all natural gas exports to Europe via Nord Stream 1, which puts Europe low on fuel during the upcoming winter.
Americans are suffering from much higher electricity and natural gas prices and shortages of fuel oil for the coming winter in the Northeast. These energy issues and policies are linked, and they are increasingly placing the United States in a more untenable energy position.