Biden administration resumes plans for oil and gas drilling on federal land

(AP Photo/Jae C. Hong, File)

The Biden administration is finally moving forward with re-starting the leasing of federal land for oil and gas drilling. The Interior Department made the announcement after a federal appeals court ruled in favor of the administration last week. The “social cost of carbon” value is factored in measuring the cost of climate change in the drilling process. The court ruled that the administration can use a higher calculation value of per ton of greenhouse gases emitted in the federal decision–making process.

When Joe Biden ran for president, he promised to stop federal drilling auctions, but that effort has caused Republican-led states to file court challenges. Since he took office in January 2021, Biden’s administration has provided a string of stops and starts to the federal oil and gas leasing program. Biden wants a return to the Obama-era value of $50 per ton of greenhouse gases emitted, while Republicans prefer the calculation used during the previous administration of $10 per ton.

The Interior Department said there would be a delay in upcoming federal oil and gas lease sales last month because a Louisiana federal judge blocked the administration from using its much higher social cost of carbon value when it factors in the risks of climate change in decision-making on permits, investments, and regulatory issues. That changed last week when a federal appeals court ruled in favor of the administration. It issued a temporary permit to use $50 per ton of greenhouse gases emitted. The Biden administration is being allowed to refigure the metric of calculating the alleged cost to society from greenhouse gas emissions, at least temporarily.

“With this ruling, the Department continues its planning for responsible oil and gas development on America’s public lands and waters,” Interior Department spokeswoman Melissa Schwartz said in an email. “Calculating the social cost of greenhouse gas emissions provides important information that has been part of the foundation of the work the Interior Department has undertaken over the past year.”

The executive order signed by Biden was meant as a return to the bad old days of the Obama administration and its tendency to over-regulate as it picked winners and losers in business. It is no secret that Obama was anti-fossil fuel industry and Biden is more of the same. The idea is to continue to make drilling for oil and gas so cost prohibitive that the funding falls away and the industry collapses. During the Trump administration, regulatory red tape was cut and an all-of-the-above spirit prevailed. It is no coincidence that for the first time, the United States became energy independent during the previous administration.

By the way, I am extremely pleased that the nomination of Sarah Bloom Raskin for the Federal Reserve Board was pulled. The wife of Rep. Jamie Raskin, she was nominated for the position of vice chair for supervision, the Fed’s top banking regulator. Her past statements about monetary policy and climate change disqualified her for that job, in my opinion. She has argued that the Federal Reserve should stop lending to energy companies as a way to hasten the demise of fossil fuels and the oil and gas industry. She’s an activist who promotes the idea that the Federal Reserve should go outside its mandate and increase its role in climate change issues. Those of us who support the goal of America’s energy independence dodged a bullet when her nomination was pulled. She had no support from Republicans and when Joe Manchin voiced his objection, it was over.

The Biden administration won in federal appeals court last week.

A federal appeals court in New Orleans on Wednesday granted the White House’s request to temporarily let federal agencies use Biden’s new cost-benefit analysis rules, which ultimately aim to slow climate change by making activities that emit greenhouse gases sharply more expensive.

A group of 10 energy-producing states, with the support of a raft of industry trade groups, claimed in their legal challenge that Biden’s formulas would cost the U.S. economy “hundreds of billions or trillions of dollars” and “may be the most significant regulatory encroachment upon individual liberty and state sovereignty in American history.”

The Interior Department said it continues to move forward with reforms to address “the significant shortcomings” in the nation’s onshore and offshore oil and gas programs.

“Specifically, the Department is committed to ensuring its programs account for climate impacts, provide a fair return to taxpayers, discourage speculation, hold operators responsible for remediation, and more fully include communities, Tribal, state and local governments in decision-making,” the agency said.

There is no word yet when the oil and gas leasing auctions will resume. The Bureau of Land Management was planning to hold lease sales in Western states until the February ruling against using the Obama-era calculation on the social cost of carbon. Industry groups like the Western Energy Alliance anxious for the sales to proceed.

“We have heard directly from BLM that the district court ruling caused them to stop progress because they would have had to change the analysis, but now that’s not the case, they can move forward,” Kathleen Sgamma, President of the Alliance, said in an email.

We should remember that lease auctions are only the first steps in the process. Next comes permits and mountains of paperwork and red tape. And, oil and gas drillers have to decide if it is prudent to pursue drilling during the Biden administration, given its hostile attitude to fossil fuels. At times like this, with energy prices skyrocketing, and the Biden administration going hat in hand to nefarious actors to beg for oil, it certainly is in our national interest to go back to what works and reestablish our energy independence.