President Joe Biden on Wednesday signed an executive order placing a moratorium on the leasing of federal land and waters for oil and gas development, making good on a campaign promise to take significant action to address climate change.
The U.S. is the largest oil producer in the world, and nearly a quarter of all fossil fuel emissions in the United States come from burning resources mined on federal land. The order, which will apply only to future leases and does not apply to tribal lands, will continue to allow drilling on existing leases.
The executive order, part of a series of actions taken by the federal government on Wednesday to prioritize climate change and environmental justice, was widely praised by Montana conservation groups and outdoor business organizations. The action could keep up to 450 billion tons of climate pollutants in the ground. The Trump administration had aggressively leased federal lands for the past four years, and Biden’s order amounts to a sharp rebuke from a new administration that has already rejoined the Paris Climate Agreement and rescinded a critical permit for the Keystone XL pipeline.
“It’s a huge deal,” said Melissa Hornbein, an attorney with the Western Environmental Law Center, who has successfully challenged oil and gas leases during the Trump administration for failing to consider their impacts on the climate and water quality.
“It’s both symbolically important and, as a practical matter, it’s incredibly significant as well,” Hornbein said. “Under the Mineral Leasing Act, these sales must happen on a quarterly basis. They’ve continued for the past four years unabated. This is really going to cut into potential future emissions.”
The order received immediate pushback from the oil and gas industry. The Western Energy Alliance, which represents 200 energy companies that work in the West, filed a lawsuit challenging the executive order in federal court in Wyoming just hours after it was signed. In a statement, the organization pointed out that oil and natural gas from public lands accounts for 6.4 % and 9.2 %, respectively, of total production in the U.S., and that oil and gas companies returned $4.2 billion in onshore and $5.6 billion in offshore leasing revenue and royalties in 2019.
Republican officeholders in Montana also pushed back against the action. Revenue from oil and gas leases in Montana amounted to $24.4 million in 2019, the latest year data is available. Democratic Sen. Jon Tester has been an advocate for increasing leasing costs to better compensate taxpayers.
“Limiting domestic energy production is nothing more than an ‘import more oil’ policy that runs counter to our shared goal of emissions reductions and will make it harder for local communities to recover from the pandemic.”
American Petroleum Institute president and CEO MIKE SOMMERS
Just after the executive order was signed, Republican Sen. Steve Daines announced Wednesday that he will introduce a bill to reverse the moratorium.
“President Biden is continuing his attack on American energy, this time by blocking all new oil and gas leases on federal lands. This is another blow to Made in America energy, jobs and our Montana way of life,” Daines said in a statement.
Republican U.S. Rep. Matt Rosendale said on Twitter that Biden’s “anti-energy agenda will destroy jobs, increase energy costs for hardworking Montana families and crush America’s energy independence.”
Other actions taken by Biden Wednesday include a pledge to protect 30% of land and water in the U.S. by 2030 (currently only 12% of land in the U.S. is considered protected), institute a rigorous review of all fossil fuel leasing by the federal government and establish federal agencies and working groups designed to explore ways to curb greenhouse gas emissions.
“It’s a good day for public lands in Montana,” said Anne Hedges, director of policy and legislative affairs for the Montana Environmental Information Center. “Montanans care about public lands, and it’s not fair to let one industry dictate how our public lands are used. That’s what’s been happening for far too long, and this is a great step in the right direction.”
JOBS
Oil and gas production on federal lands in Montana has been sputtering for years, the Billings Gazette reported Wednesday. The Bureau of Land Management in Montana offered 442,000 acres for federal lease during the Trump presidency, and only 40% found buyers. Even fewer were developed into functioning mines.
An analysis by the University of Wyoming estimated that a ban on oil and gas leasing on federal lands would cost $33.5 billion and 58,676 jobs over the four years of Biden’s term. In Montana, the ban is expected to cost $100 million in lost revenue and 612 jobs by the end of Biden’s first term, the analysis found.
Critics of the Biden moratorium said the job losses will harm communities already impacted by the pandemic.
“Limiting domestic energy production is nothing more than an ‘import more oil’ policy that runs counter to our shared goal of emissions reductions and will make it harder for local communities to recover from the pandemic,” said Mike Sommers, American Petroleum Institute president and CEO, in a statement.
But Biden’s proposed $2 trillion climate plan, parts of which are supposed to be incorporated within another round of pandemic stimulus in February, is expected to invest in clean-energy jobs that would help economies like Montana’s invest in more sustainable long-term industries. Biden has pledged to focus that plan on environmental justice and low-income communities.
Hedges said the leasing moratorium is more symbolic than practical right now due to a current glut in the supply of oil and gas. Many oil and gas companies have slowed exploration activities in recent months and years.
She said she doesn’t expect the decision to have a significant impact on oil and gas jobs in Montana, as Montana’s elected Republicans claim.
“It’s a good day for public lands in Montana. Montanans care about public lands, and it’s not fair to let one industry dictate how our public lands are used. That’s what’s been happening for far too long, and this is a great step in the right direction.”
Anne Hedges, director of policy and legislative affairs for the Montana Environmental Information Center
“They’re businessmen. They should understand that the market isn’t demanding these lease sales right now,” Hedges said.
Hornbein said that while Biden’s move is significant, there are still millions of acres under existing leases that have not yet been developed. The order does not address potential emissions from those lands, which make up about a quarter of total U.S. emissions.
Hornbein said a multi-pronged approach is required to address the emissions from those leases, including court challenges and cleanup of abandoned oil and gas wells that are currently leaking methane, a potent greenhouse gas. She said such cleanup provides an opportunity for job growth in Montana, as does transitioning Montana’s energy economy to include more wind and solar sources.
“It’s a question of whether you want long-term sustainable job growth or a short-term boom that is leading to much more problems later on,” Hornbein said.
COAL LEASING
The executive order does not directly impact leasing for Montana’s most significant federal leasing mineral: coal.
Federal coal leases in Montana generate $34.4 million in revenue annually, and the state has more coal reserves than any state in the country. Even so, the industry is in steep decline, meaning most of those coal reserves will likely stay in the ground.
The executive order does pledge “a rigorous review of all existing leasing and permitting practices related to fossil fuel development on public lands and waters.” That could help fix a broken coal leasing system, said Steve Charter, a rancher in the Bull Mountains and member of the Northern Plains Resource Council.
“We no longer have the luxury to deliberate in half measures. We hopefully can take advantage of this opportunity and time to create better and more durable jobs and create better and more sustainable sources of energy.”
Jenny Harbine, staff attorney, Earthjustice
Charter’s ranch is near coal leases, and Charter said activities by coal companies have caused a well that supports his ranching operation to run dry. Coal production can cause significant water pollution as well, and the federal government has not properly considered those impacts in past leasing efforts, Charter said.
Charter said ranchers like him rely on a healthy environment to support their livelihoods, and that Biden’s actions help protect him from future water quality and quantity issues, as well as the ever-increasing threat of wildfires.
“Our economy is based on having clean water and air. We have to recognize that,” Charter said. “That’s the source of our wealth and we need to take care of it.”
The Obama administration had previously announced a federal coal leasing moratorium that received significant pushback from industry. In 2017, then-Secretary of the Interior Ryan Zinke reversed that order. A federal court later found that Zinke’s order did not properly adhere to the National Environmental Policy Act.
In 2019, the Trump administration’s Bureau of Land Management issued an environmental assessment to comply with the judge’s order and allow new coal leasing. A lawsuit has since been filed by states, conservation groups and the Northern Cheyenne Tribe challenging that assessment, arguing that federal coal leasing causes significant environmental harm.
Jenny Harbine, a staff attorney at the legal nonprofit Earthjustice who filed the case, praised the oil and gas decision, and said science supports the Biden administration taking bold action on coal as well. Harbine said a test for the administration will be deciding how or if it will defend the Trump administration’s actions in the coal moratorium case.
“Now is the time for bold and swift action to stop the rising tide of climate change,” Harbine said. “We no longer have the luxury to deliberate in half measures. We hopefully can take advantage of this opportunity and time to create better and more durable jobs and create better and more sustainable sources of energy.”
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