“Beyond projects already committed as of 2021, there are no new oil and gas fields approved for development in our (IEA 1.5) pathway, and no new coal mines or mine extensions are required.” HERE.
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. In the closing months of the Trump administration, energy companies stockpiled enough drilling permits for western public lands to keep pumping oil for years and undercut President-elect Joe Biden’s plans to curb new drilling because of climate change, according to public records and industry analysts. Companies submitted more than 3,000 drilling permit applications in a three-month period that included the election, according to data from the U.S. Bureau of Land Management. Officials approved almost 1,400 drilling applications during that time amidst the pandemic. That’s the highest number of approvals during Trump’s four-year term, according to AP’s analysis. The administration issued more than 4,700 drilling permits in 2020 — comparable to approval numbers from early last decade when oil topped $100 a barrel, roughly twice the current price.
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 until 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 500 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 towards 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 U.S. 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.”
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 18 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.”
Daily Poster, 5/20/21
Oil companies stockpile drilling permits, challenging Biden on climate
In Colorado, a dozen permits are approved or pending to drill in Pawnee National Grassland, a birding destination where wildflowers and cactuses bloom below the buttes
BILLINGS, Mont. — In the closing months of the Trump administration, energy companies stockpiled enough drilling permits for western public lands to keep pumping oil for years and undercut President-elect Joe Biden’s plans to curb new drilling because of climate change, according to public records and industry analysts.
An Associated Press analysis of government data shows the permit stockpiling has centered on oil-rich federal lands in New Mexico and Wyoming. It accelerated during the fall as Biden was cementing his lead over President Donald Trump and peaked in December, aided by speedier permitting approvals since Trump took office.
The goal for companies is to lock in drilling rights on oil and gas leases on vast public lands where they make royalty payments on any resources extracted. Biden wants to end new drilling on those same lands as part of his overhaul of how Americans get energy, with the goal of making the nation carbon neutral by 2050.
Companies submitted more than 3,000 drilling permit applications in a three-month period that included the election, according to data from the U.S. Bureau of Land Management. Officials approved almost 1,400 drilling applications during that time amidst the pandemic. That’s the highest number of approvals during Trump’s four-year term, according to AP’s analysis.
In Colorado, a dozen permits are approved or pending to drill in Pawnee National Grassland, a birding destination where wildflowers and cactuses bloom below the buttes.
In Wyoming’s Thunder Basin National Grassland, a prairie expanse that abounds with wildlife and offers hiking, fishing and hunting, oil companies EOG Resources and Devon Energy — which amassed the most federal permits this year — have permission to drill three dozen wells among fields of sage brush.
INVITATION TO DRILL
Making it easier to drill was a centerpiece of Trump’s effort to boost American energy production in part by enticing companies onto lands and offshore areas run by the U.S. departments of Interior and Agriculture.
Under Trump, crude production from federal and tribal lands and waters increased sharply, topping a billion barrels in 2019. That was up by almost a third from the last year of the Obama administration.
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But this year the coronavirus pandemic and crashing oil prices caused many companies to curtail their activity.
With markets still in flux and oil producers slashing budgets, major companies nevertheless have been acquiring enough permits to keep pumping through Biden’s upcoming term. The government approved about 500 new drilling permits in September, more than double the same month in 2019.
The oil industry’s fear is that Biden will follow through on campaign pledges and make it impossible or much harder to drill on public lands. “You go from having a champion in the White House, who steers the entire federal apparatus to wanting you to be successful, to someone who is hostile to the industry,” said Tom Pyle, a former Republican aide on Capitol Hill who now leads the industry group American Energy Alliance.
For Biden supporters, the stockpiling threatens parts of an ambitious climate agenda before the Democrat can get into the White House. Oil and gas extracted from public lands and waters generates the equivalent of almost 550 million tons (500 metric tons) of greenhouse gases annually, the U.S. Geological Survey said in a 2018 study.
Trump administration critics say officials enabled the industry to reach its goals, noting that Interior Secretary David Bernhardt and others have boasted how speedily permits were processed.
Bureau of Land Management spokesman Chris Tollefson said the agency had streamlined permitting while still following environmental laws.
“Markets, not the BLM, determine how oil and gas developers decide to acquire and develop leases,” he said.
Processing times for completed applications to the BLM have dropped from almost 140 days on average in the last year of Obama’s administration to 44 days in fiscal year 2019, according to congressional testimony by Interior officials. In 2020, some companies had permits awarded in a little over a month, AP found. Other permits took longer but an average could not be determined.
YEARS WORTH OF PERMITS
To undo the late-term awarding of so many permits, a former senior Interior Department official said the Biden administration could be forced to pay millions of dollars to companies to get them to relinquish drilling rights. Such a scenario played out in pristine areas of Montana where officials spent decades trying to buy out companies with drilling leases near Glacier National Park.
“This is classic, end of administration stuff, but for the Trump administration it’s on steroids,” said Jim Lyons, deputy assistant secretary of Interior under Obama.
Houston-based EOG Resources amassed the most permits this year — 1,024 — including 549 since September, according to AP’s analysis.
In total, EOG has about 2,500 federal permits approved or in progress. “If he (Biden) tries to impose some regulations on how new federal permits are issued, we certainly already have an inventory, a large inventory, of existing federal permits that will sustain activity for several years,” company CEO Lloyd Helms told a November investors conference.
Oklahoma-based Devon Energy collected the second-highest number this year. As the presidential campaign wore on this summer, Devon executives assured investors that the company was amassing permits. By October, Vice President David Harris said the company had enough “federal drilling permits in hand that essentially cover all of our desired activity over the next presidential term.”
Devon’s more than 500 permits secured this year resulted from a long-term business strategy, not a political calculation, said spokeswoman Lisa Adams. “It was something in the works for years,” Adams said.
Biden is nominating New Mexico Rep. Deb Haaland as interior secretary. And Haaland, who co-sponsored the Green New Deal by liberal Democrats, has said she opposes fracking and drilling on public land.
Even if Biden doesn’t immediately ban new permits, he could place a moratorium on them to study the situation in more detail, said Leo Mariani, managing director of equity research at KeyBank Capital Markets.
Most companies have up to two years to act on federal permits, so a one-year moratorium wouldn’t have much impact on oil supply and they could shift production to private or state-owned land, Mariani said.
But such a shift would come at a cost, because royalty rates on private or state-owned land can be twice as much as federal land. “Because the break-evens are so much lower, you’re not going to see every dollar re-allocated to other places,” said Parker Fawcett, analyst for S&P Global Platts Analytics.
With a ban on new federal drilling permits, U.S. production could fall by about 1 million barrels per day, or about 10%, by 2024, Fawcett estimates. “You will have a supply impact.”
Producers started talking about mitigating their risks about a year ago after Democratic presidential candidate and Sen. Elizabeth Warren said she would ban fracking on federal lands, said Artem Abramov, partner and head of shale research at Rystad Energy.
Then companies began amassing federal drilling permits at more than $10,000 apiece.
More than 60% of the permit applications filed over the past year were in New Mexico, where about a quarter of the state budget comes from oil and gas revenues. And 20% of the permit applications were filed in Wyoming, where Gov. Mark Gordon says the state budget has taken a one-third revenue hit mainly because of the oil downturn.
“I definitely wouldn’t expect the New Mexican state government to support radical moves,” Abramov said. “They would push Biden toward a more gradual approach” to the oil and gas industry.
Another Bad Year for Coal (Canary Media)
The F-150 is on another level when it comes to sales and could therefore help America hit another level when it comes to decarbonization. It’s “the country’s best-selling vehicle in every year since Donkey Kong debuted and Ronald Reagan entered the White House … ‘There’s lots of different kinds of sodas; there’s only one Coke. There’s lots of different electric pickup trucks, but there’s only one F-150,’ Jim Farley, Ford’s chief executive, told me, which may sound immodest but actually borders on understatement: Receipts from F-Series trucks alone exceed Coca-Cola’s annual corporate revenue; that of every major U.S. sports league, combined; or Disney’s global theme-park business … Or more relevant, for our purposes: Ford sells about 900,000 F-150s every year; all automakers collectively sold 250,000 new EVs total last year.” Robinson Meyer in The Atlantic: Stop Worrying and Love the F-150 Lightning.