Biden likely to halt new fossil fuel leasing on federal lands and waters Wednesday

The White House has prepared documents that would halt new oil and gas auctions on federal lands and waters for one year, these individuals said, and coal leasing for three years.The moratorium would not affect existing leases, meaning drilling would continue on public land in the West as well as in the Gulf of Mexico.

The memo remains a draft subject to final approval, said one individual close to the White House who spoke on the condition of anonymity because it had not been formally announced. It was unclear whether the new administration will exclude metallurgical coal, which is primarily used to make steel, as opposed to thermal coal, which is basically burned to produce electricity. Metallurgical coal was excluded from an Obama-era coal moratorium on the grounds that steel was required for infrastructure projects.

Biden plans to outline steps Wednesday aimed at curbing greenhouse gas emissions and elevating the role of science in federal decision-making. Asked about the matter, both the White House and the Interior Department declined to comment.

During the campaign, Biden pledged to ban "new oil and gas permitting on public lands and waters," without specifying exactly what such a ban would entail.

Fossil fuel leasing on federal and tribal lands accounts for nearly a quarter of the country's annual carbon output. It also generated $11.7 billion in tax revenue for the federal, state, local and tribal governments last year, according to the Interior Department's Office of Natural Resources Revenue.

Environmentalists say the pause will allow the new administration to assess whether taxpayers are being adequately compensated for the minerals extracted from lands they own.

"By pausing the broken leasing system and halting the giveaways to oil and gas executives, President Biden has an opportunity to meaningfully fix the leasing system for the first time in nearly four decades with solutions that work for the public and which incorporate ambitious conservation, taxpayer fairness, and climate goals," Jenny Rowland-Shea, senior policy analyst for public lands at the Center for American Progress, a liberal think tank, wrote in an email. "We can make sure our public lands and coasts are preserved, accessible and beneficial to everyone - not abused by oil and gas corporations."

But oil and gas groups, including the American Petroleum Institute, counter that freezing new leasing will deprive state and local governments, as well as the U.S. Treasury, of needed revenue. Last week, the industry criticized the Interior Department when it dictated that any new leases or permits issued during the next 60 days needed the approval of a top-ranking Biden appointee before they could be finalized.

API President Mike Sommers said that move alone will damage domestic energy producers while benefiting ones abroad.

"Restricting development on federal lands and waters is nothing more than an 'import more oil' policy," Sommers said. "Energy demand will continue to rise - especially as the economy recovers - and we can choose to produce that energy here in the United States or rely on foreign countries hostile to American interests."

About 22 percent of U.S. oil production and 12 percent of natural gas production takes place on federal lands and waters, according to API.

A moratorium would have contrasting effects on different oil-producing regions, hamstringing drillers in New Mexico, where the federal government controls huge swaths of land, while leaving those producing on state or private land across the border in Texas unscathed.

"It feels a little bit unfair," said Raye Miller, head of a small, nine-well oil-producing operation called Regeneration Energy in southeastern New Mexico. "We're very concerned with the direction things are headed."

But drilling on public lands will continue even with a moratorium on new leasing, since industry operators hold plenty of undeveloped leases in their portfolios. Only about half of the nearly 20,000 applications to drill approved between 2014 and 2019 are actually in use, according to a recent Government Accountability Office report. More than 13 million acres of land leased for oil and gas were not producing during fiscal year 2019.

While the oil and gas lobby gears up for a fight, environmental advocates are sustaining pressure on Biden to keep his commitment to end leasing and permitting on federal acreage. Among them is Oceana, a marine conservation group, which is set to release a report Tuesday detailing how reversing the Trump administration's plan to open up nearly all U.S. coastal waters to drilling would prevent more than 19 billion tons of greenhouse gas emissions.

So far, activists are pleased with Biden's quick climate actions. "At this point, I'm excited about the president's agenda," said Diane Hoskins, a campaign director at Oceana.