WASHINGTON - The Biden administration has suspended new leasing for fossil fuel production on federal lands and waters, as well as the issuance of new drilling permits, in what could be a major blow to Texas's oil industry.
Acting Interior Secretary Scott de la Vega signed an order Wednesday night, ordering department staff not to "issue any onshore or offshore fossil fuel authorization" for 60 days without clearance from Biden's appointees, who are awaiting confirmation by the Senate.
The move to cut off new oil and gas production, as well as coal mining, comes as President Joe Biden promises to move swiftly on climate change and get the United States on the path to net- zero greenhouse gas emissions by mid-century.
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Wednesday's order is temporary, presumably to give the Senate time to confirm Biden's nominee for Interior secretary, Rep. Deb Haaland, D-N.M. But Biden, who pledged to halt new drilling within federal lands and waters during the campaign, appears likely to seek to extend the ban over the long-term or make it permanent, which, according to some legal opinions, could require congressional approval.
Were he to succeed, oil and gas companies in Houston and across Texas, many of which drill heavily in the Gulf of Mexico and on federal lands in the western United States, would be forced to look elsewhere.
While existing oil and gas wells can continue to operate, such a move would put oil companies on federal lands and in the Gulf of Mexico on a ticking clock and eventually reduce U.S. oil production and the investment in new projects that creates jobs.
American Petroleum Institute President Mike Sommers said Thursday that the move risked hundreds of thousands of jobs and would only increase U.S. reliance on oil from foreign nations with lower environmental standards.
“For now, it’s temporary, but Biden said during the campaign that he wanted to cease development on federal lands,” he said. “We can only take him at his word.”
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In September, oil production from federal lands and waters totaled 75 million barrels of crude - more than 20 percent of the nation's entire production. More than half of federal production came from the Gulf of Mexico.
Biden’s promise to halt oil and gas leasing on federal lands and waters drew support from environmentalists who had questioned his support for climate change.
Since taking office Wednesday, he has shaken off those criticisms, rejoining the Paris climate accord and canceling the construction permit for the Keystone XL pipeline.
"Pausing new fossil fuel decisions brings us closer to healthier communities, a healthier climate and healthier wild places," Dan Ritzman, campaign director at the Sierra Club, said in a statement. "Public lands can, and must, be part of the climate solution."
Leaders worldwide are moving to reduce fossil fuel production as scientists warn that the world needs to rapidly reduce carbon dioxide and other greenhouse gas emissions to avoid the worst consequences of climate change. Anticipating Biden would carry through on his campaign pledge, oil and gas companies began stockpiling federal leases onshore and offshore even before November's election.
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In November, the last federal lease auction for the Gulf of Mexico under the Trump administration netted about $120 million, an improvement over the March auction of $93 million — despite the oil downturn driven by the coronavirus pandemic. At an investor conference in November, Lloyd W. "Billy"Helms Jr, chief operating officer of EOG Resources, said the Houston oil and gas company had enough federal leases to last four years.
Anne Bradbury, president of the trade group American Exploration and Production Council, said other companies also have stocked up on leases.
"We're exploring all our options,” Bradbury said. “We're really concerned about what this means. The federal government has contractual obligations under exiting leases.”
Biden, meanwhile, faces a difficult path toward halting federal leasing for fossil fuels all together.
Under federal law, the Interior Department is required to hold regular mineral lease sales. While Biden might put a moratorium on those auctions during a review of the program, permanently halting them would likely require an act of Congress, said Josh Axelrod, a policy analyst at the Natural Resources Defense Council.
"That's a big lift," he said. "In our view a moratorium is viable, and you could limit leasing quite a bit. But the law is pretty clear is you need to continue the leasing program."
james.osborne@chron.com
Twitter: @osborneja
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