Biden White House Quickly Signals Aggressive Approach to Fossil Fuel Producers

The Biden administration made a series of moves that signal its aggressive approach to traditional oil and gas producers. President Joe Biden said the administration intends to take a “whole of government” approach to fighting climate change. It appears that measures targeting oil and gas producers will make up a key part of the plan. This could set up a tumultuous (and likely litigious) four years to come.

Oil and Gas Permits on Public Lands Suspended

The administration wasted no time in taking its first steps. On Inauguration Day, Biden’s acting interior secretary suspended new oil and gas leasing and drilling permits on public lands and waters for 60 days as part a review of the federal minerals leasing program. The order also blocks the approval of new mining plans, land sales or exchanges.

The permit and leasing suspension went into effect immediately. Though the order does not limit operations under valid leases, it will likely slow or halt the approval of pending drilling permit applications. There is also much uncertainty for producers who leased land with the anticipation of production but had not secured permits before the change in administrations.

Keystone XL Pipeline Blocked, Possible Changes to Methane Emissions Standards

Also on Inauguration Day, Biden signed an order that included notable actions for the oil and gas industry. It opened the door to end the Trump administration’s rule rescinding New Source Performance Standards for methane emissions from the oil and gas sector (which is currently subject to litigation). To much publicity, the order also withdrew the March 2019 permit for the Keystone XL pipeline.

New Oil and Natural Gas Leases Paused, Moves Made Toward Renewable Energy

A week later, the administration issued another executive order. It includes a broad range of measures, from ordering federal agencies to purchase electric vehicles to calling for the founding of a Civilian Climate Corps. Crucially for the oil and gas industry, the order directs the secretary of the interior to:

• Halt new oil and natural gas leases on public lands or offshore waters
• Launch a rigorous review of all leasing and permitting practices related to fossil fuel development
• Identify steps to double renewable energy production from offshore wind by 2030

Oil and gas drilling on tribal land would not be barred by the order. The order also directs federal agencies to eliminate fossil fuel subsidies to the extent doing so is consistent with applicable law. The order’s ban on new oil and natural gas leases has already been met with legal challenges from the industry. The Western Energy Alliance filed a lawsuit in U.S. District Court in Wyoming alleging that Biden “exceeded his presidential authority” and violated the Mineral Leasing Act, National Environmental Policy Act and the Federal Lands Policy and Management Act.

 

The White House’s actions mark a dramatic change from the Trump administration, which prioritized deregulation of the oil and gas industry. Many in the industry have already shown opposition to the new administration’s moves. With the House and Senate in Democratic control by narrow margins, major climate- and emissions-related legislation appears unlikely for the time being. This could mean that the Obama- and Trump-era trends of setting environmental priorities via executive order and rulemaking will continue.

While the last four years were largely marked by litigation from states and environmental groups challenging Trump’s executive actions, the next four appear primed for industry-driven challenges. Phelps will watch these developments closely and provide updates. Please contact David J. Topping or any other member of Phelps’ Environmental Law team if you have questions or need compliance advice and guidance.