Biden should end pause on new oil and gas leases on federal lands
Like every newly elected president, Joe Biden entered office by issuing a flurry of executive orders. In one of them, a Jan. 27 executive order titled, “Tackling the Climate Crisis at Home and Abroad,” Biden instructed the Interior Department to “pause” all new leases on federal lands and waters pending a comprehensive review of the program.
But now that we are past the 100-day mark of his presidency and the pause has been extended without any firm timetable for resolution, it’s time to take a hard look at Biden’s actions. Is he really going to implement his campaign promise to end all new federal leasing for oil and gas production? It’s one thing to make a comment during the campaign and then evaluate it during the initial days of the administration. But it’s another thing to keep the moratorium in place for an indefinite period of time or, even worse, to carry out this particular policy.
The first question to ask is what problem Biden is trying to solve. Presumably, it’s climate change and curbing U.S. emissions of greenhouse gasses. So does a ban accomplish that goal, and if so, do the benefits outweigh the costs? The answer is a resounding “no.”
First, the idea that banning federal lease sales could dramatically curb greenhouse gas emissions is misleading. Many opponents of oil and gas leasing cite data from the U.S. Geological Survey suggesting that lifecycle emissions from fossil fuels produced on public lands are equivalent to over 20 percent of total U.S. emissions. But that number includes significant emissions from coal production — which, incidentally, is not included in this executive order.
Moreover, it is folly to assume that much – if not all – of the supply from federal lands and waters won’t be backfilled by other sources, either domestic from private or state lands or from other countries. Without a change in overall demand – and a blanket production ban does nothing to change demand – the market will produce the needed supply, and greenhouse gasses will continue to be emitted.
Plus, curtailing federal oil and natural gas leasing could reverse the reduction in coal use, meaning more emissions that contribute to climate change. This possibility is already raising red flags in some quarters, with the Energy Information Administration recently projecting that higher natural gas prices – something that is even more likely to occur with a moratorium on federal leasing – would cause coal’s share of power generation to increase from 20 percent in 2020 to 23 percent in 2022. According to an industry study conducted last year, coal generation would increase 15 percent and carbon emissions in the power sector would increase 5.5 percent by 2030. The same study projected that there would be an extra 2 million barrels a day of oil imported from foreign sources, most of which have lower environmental standards. A leasing ban means moving backwards, not forward, on climate.
Second, oil and gas leases provide tremendous funding for federal and state authorities tasked with sustainability efforts. The Interior Department just announced $1.6 billion in grants through the recently passed Great American Outdoors Act, funding that will address critical deferred maintenance projects and improve transportation and recreation infrastructure in national parks, national wildlife refuges and recreation areas. Similarly, the Land and Water Conservation Fund, which is funded almost entirely by offshore oil and gas natural revenues, distributed over $227 million across the country for outdoor recreation and conservation efforts last year.
Moreover, oil and gas royalties provide millions of dollars to state budgets not just for conservation and sustainability efforts, but for education, police and other public works too. According to the Congressional Research Service, 27 states produced some natural gas from federal onshore leases, and 24 states produced some oil in 2019. In New Mexico, for instance, this revenue accounted for almost 11 percent of the state budget.
It’s understandable that President Biden wants to follow through on a campaign promise. But good governance means being practical. If there are specific problems with oil and gas production on federal lands, let’s solve them. Implement rules that address methane leakage. Update the royalty schedule. But don’t roll out a policy that won’t achieve your goals, and will still impose real costs on workers, budgets and conservation projects. A blanket ban on production of oil and gas on federal lands is not the answer.
Jeffrey Kupfer, a former acting deputy secretary of energy in the Bush administration, is an adjunct professor of policy at Carnegie Mellon University’s Heinz College and the president of ConservAmerica, a non-profit organization whose goal is to strengthen the Republican Party’s stance on environmental issues and support efforts to conserve natural resources and protect human and environmental health.