Joe Biden’s Drilling Moratorium Is Not a Moratorium
During his first week in office, Joe Biden signed an executive order pausing oil and gas leases on federal land. But a few months later, it's clear the modest action will do little to rein in US carbon emissions.
Experts and environmental advocates say that Joe Biden's moratorium on drilling is likely to have little effect. (@ElMelindo / Flickr)
During the 2020 campaign, President Joe Biden promised to combat climate change by “banning new oil and gas permitting on public lands and waters” — and the week he took office in January, Biden issued an executive order pausing oil and gas leases on federal land as part of the administration’s effort to “combat the climate crisis by example.”
But experts and environmental advocates say that the moratorium is likely to have little effect. Moreover, even as a new International Energy Agency (IEA) report said governments must immediately end fossil fuel development, Biden has yet to use his executive authority to take steps that could more quickly do that.
The ramifications of Biden’s initial moves will likely be limited because fossil fuel companies, fearing such a ban under a potential Democratic administration, sought and received approval for thousands of drilling permits on millions of acres of federal land during the Trump years, which they can develop at any time. Several energy executives have said that this stockpile will keep the companies occupied at least until the next presidential election, without needing to seek any new leases in order to continue development.
Even if their stockpiles don’t last that long, the Interior Department’s Bureau of Land Management has already broken Biden’s campaign promise by approving more than five hundred new drilling permits for previously existing leases since Biden took office.
“The review process for an application for a permit to drill is comprehensive to ensure oil and gas development will be done in an environmentally sound and responsible manner,” the Bureau of Land Management told Argus Media in March.
These factors are why Mitch Jones, policy director for environmental advocacy group Food & Water Watch, believes the pause on new leases “most likely will have no effect on oil and gas production on federal lands.”
Jones added: “The mere fact that new leases aren’t being issued isn’t having any real-world effect on the amount of drilling that’s taking place.”
The IEA report, released this week, found that in order to keep global temperature increases below catastrophic levels, governments should move aggressively toward electric cars and zero-emissions power plants, both of which would dramatically reduce oil and gas use.
If Biden is serious about reducing oil and gas developments on federal lands and mitigating the worst effects of climate change, experts insist that action is needed beyond the permit moratorium. Specifically, there are other concrete steps the administration can take without congressional action, including a moratorium on new drilling permits, and disincentivizing further development by raising the cost of leasing land and the percentage of oil and gas revenues taken by the government.
A Limited and Tenuous Moratorium
Without additional action, Biden’s executive order is unlikely to enable the United States to reduce emissions on federal lands by the 45 percent amount that is necessary by 2030 to limit warming to less than 1.5 degrees Celsius. Even under conservative estimates, the emissions produced by development of leases granted under Trump alone could equal the annual emissions of the entire nation of Brazil, according to a 2020 report from the Wilderness Society.
“Most of the [fossil fuel company] revenues are coming from existing wells that have already been developed and are pumping oil,” said Mark Squillace, professor of natural resources law at the University of Colorado Law School. “Nothing that the Biden administration has done has changed any of that.”
Regardless of its effectiveness, there’s another problem with the moratorium on new leases: It could be overturned soon. The state of Wyoming has sued in federal court to obtain an injunction against the moratorium. The state’s memo in support of its suit claims that the moratorium violates the Mineral Leasing Act of 1920, which requires that “lease sales shall be held for each State where eligible lands are available at least quarterly.”
According to Squillace, Wyoming has a “good shot” at getting an injunction blocking the moratorium, especially since the Wyoming federal district court has previously been sympathetic to the state’s lawsuits against the Bureau of Land Management. “I do think that they’ve got a decent argument,” Squillace said.
Jones said that he believes the moratorium is legal under the Federal Land Policy and Management Act of 1976, which authorizes the Interior secretary to “take any action necessary to prevent unnecessary or undue degradation of [public] lands.”
Asked whether he thought such an argument could prevail in federal court, Jones said that “it’s a solid argument, whether or not a Trump-appointed federal judge would see it that way.”
Reached by email, Wyoming attorney general Bridget Hill told the Daily Poster that the state does not comment on pending litigation.
Other Opportunities
Even if the moratorium is struck down, there are other approaches that would make bigger contributions to reducing oil and gas development on federal lands and that don’t present the same legal issues.
Before fossil fuel companies can exploit oil or gas on leased land, the Bureau of Land Management has to approve the companies’ application for a drilling permit. The permitting process could allow the government to impose limits on the way in which oil and gas development occurs, or block such development entirely, without running into the same legal issues as the moratorium on new leases.
“The [permitting] process is an opportunity for the government to impose restrictions, or limit the way in which oil and gas development occurs,” Squillace said. “They could put a pause on [permits].”
And unlike the statutory obligation to offer new leases, Squillace said, “I don’t know that there’s any particular obligation to issue [permits].”
Pausing new permits “would be a good first step for the federal government … where the administration actually has the authority to act unilaterally without going to Congress for legislation,” Jones said.
Short of pausing permits entirely, the Bureau of Land Management could put conditions on permits that require developers to mitigate the environmental harms of drilling, such as utilizing methane capture technologies, Squillace said.
The Biden administration could also unilaterally create financial disincentives to fossil fuel exploitation on federal land by raising costs and fees associated with drilling.
The Mineral Leasing Act sets a minimum rent on federal land — $1.50 per acre for the first year of a lease, and $2 per acre for each subsequent year — but doesn’t preclude the president from setting a higher rent. In recent comments to the Interior Department, Squillace and eighteen other law professors recommended raising yearly rents to $10 per acre.
With such a rent hike, “We’d actually have fewer leases being developed, but those that were being developed would generate more revenues for the federal government and the states,” Squillace said.
Another way to raise money while disincentivizing development would be increasing the government’s cut of revenues from oil and gas extraction on federal lands. The government’s share is currently 12.5 percent — the same as it has been since the passage of the Mineral Leasing Act in 1920. Squillace said that “if the BLM is serious about ramping down production and maximizing federal and state revenues,” the government’s take should be raised to 20 percent.
“I don’t think the long-term outlook for oil and gas is very bright — revenues are going to go down as price goes down.” Squillace said, noting the rapidly-falling cost of renewable energy. “In the short term, we should be squeezing fair revenues out of these industries before they shut down.”
Increasing the government’s share to 20 percent would also disincentivize development by lowering fossil fuel company profits, he said.
Jones, however, said that Food & Water Watch considers these types of policy changes insufficient.
Fossil fuel exploitation on federal lands “shouldn’t be made more expensive, it should be ended,” Jones said. “We should be taking direct action to transition away from fossil fuels, and the federal government needs to play a central role in guiding that transition.”