Biden suspends leases for fossil fuel development on federal lands

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Joe Biden ordered a suspension of leases for fossil fuel development on federal lands and a review of how permits were handed out under Donald Trump, in clean energy directives that stopped well short of an outright drilling or fracking ban.

The US secretary of interior was directed to “pause” new leasing “to the extent possible” in the executive orders signed by Mr Biden on Wednesday, which also called for a “rigorous review” of existing leasing and permitting practices.

The president said he believed the actions would help spark clean energy investment in the US, one of the main pillars of his 2020 White House campaign.

“We’ve already waited too long to deal with this climate crisis, we can’t wait any longer,” Mr Biden said, linking the measures to job creation in sectors such as the car industry, where he said demand for zero-emission vehicles from the federal government would create 1m new jobs.

As part of the series of executive orders, the president also directed agencies to procure American-made zero-emissions vehicles for their fleets, and asked the director of national intelligence to prepare an estimate of the security implications of climate change.

Bar chart of % of total national output in 2019 showing Top US oil and gas producing states

He also committed to the establishment of a civilian “climate corps”, and new efforts to revitalise communities reliant on oil, gas and coal.

Mr Biden said he had no plans to ban fracking, but said he would ask Congress to eliminate fossil fuel subsidies: “I don’t think the federal government should give handouts to big oil to the tune of $40bn.”

The suspension of leasing by oil and gas companies on federal lands fulfils an election pledge and marks his most significant move against the energy sector after he campaigned on a “transition away from oil”.

Gina McCarthy, the White House national climate adviser, said the suspension would allow the administration to “review the entire strategy of how we’re looking at public lands”, including “what new leases ought to be approved and sold” as well as what sort of regulatory changes should be made to the coal industry.

She stressed, however, that the order was not directed at “impacting existing permits and fracking”.

“I think that the opportunity for the states to continue to accrue the royalties from both coal and oil and natural gas that is properly done on federal lands is going to continue,” Ms McCarthy said.

The orders mark a sharp departure from Mr Trump’s polices. While he sought to roll back restrictions on oil and gas producers, Mr Biden put tackling climate change at the heart of his White House bid.

On his first day in office, Mr Biden took steps to rejoin the Paris climate agreement and scrapped a permit for the controversial Keystone XL oil pipeline.

Wednesday’s order will apply specifically to federally held lands and waters, which account for about 22 per cent of American oil production. It does not affect activity on private land, which accounts for most US oil and gas output.

Some industry analysts played down the significance of the leasing suspension, saying the decision to review, rather than ban, future permits would damp some of the fallout in states such as New Mexico, where federal lands and waters account for much oil production.

Analysts said any effect on overall US oil and gas production from the leasing suspension was likely to be felt only in a couple of years, as many operators had stocked up on leases and permits in anticipation of the decision. The move could even fuel a temporary rush to deploy rigs as operators scrambled to make use of existing permits.

Climate Capital

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