JULY 1, 2022
President Biden’s administration opened the door Friday to more offshore oil and gas drilling in federal waters over the next five years, setting a potential course for future U.S. fossil fuel extraction just a day after suffering a major climate setback at the Supreme Court.
The proposed program for offshore drilling between 2023 and 2028 would ban exploration off the Atlantic and Pacific coasts. But by leaving the possibility for new drilling in parts of the Gulf of Mexico and off the coast of Alaska, the announcement falls short of Biden’s campaign promise to end federal fossil fuel leasing for good.
The plan may move the country further from its pledge to slash the nation’s planet-warming pollution in half by 2030 compared with 2005 levels, and help avert even fiercer fires, storms and drought driven by rising temperatures. Biden’s climate agenda now hinges on whether Democrats can pass a reconciliation package in the Senate that includes robust environmental policies.
“The Supreme Court just put a lead ball around his ankle with regard to his executive authority,” said John Podesta, a former chief of staff to President Bill Clinton and a former senior adviser to President Barack Obama. “If you don’t get reconciliation, together with the constraints that the Supreme Court has put on, I think there’s no way you can get the 50 percent reduction by the end of the decade.”
But the offshore plan, along with other events this week, underscores the political and legal limits in the United States to tackle global warming, and carries risks for Democrats as Americans experience record-breaking gasoline prices ahead of November’s midterm election and as many in Biden’s base demand stricter limits on fossil fuels.
On Thursday, the conservative majority on the Supreme Court struck a blow to the Environmental Protection Agency’s ability to force power providers to stop burning coal. And Biden’s Interior Department was compelled by an injunction from a lower court to lease acreage in the Western United States this week for onshore drilling.
The consequences of warming 1.5 degrees Celsius (2.7 degrees Fahrenheit) compared with preindustrial levels by continuing to burn other fossil fuels are enormous for humanity: If left unchecked, global warming may stall headway on combating hunger, poverty and disease worldwide. The International Energy Agency has urged halting investment in new fossil fuel supplies to meet that goal.
“We’re going to be slowing down the progress that we otherwise might be making,” said Brian O’Neill, a chief scientist at the Joint Global Change Research Institute and a lead author on a U.N. Intergovernmental Panel on Climate Change report on impacts and vulnerability.
The Interior Department is considering 10 potential auctions in the Gulf of Mexico and one in Alaska’s Cook Inlet. Interior Secretary Deb Haaland emphasized that the plan has not been finalized and that her department is considering the option of having no lease sales at all. The plan narrows areas considered for oil and gas leasing from one proposed under President Donald Trump in 2018.
“A Proposed Program is not a decision to issue specific leases or to authorize any drilling or development,” Haaland said in a statement. “From Day One, President Biden and I have made clear our commitment to transition to a clean energy economy.”
During his bid for the White House, Biden vowed to ban new oil and gas drilling across federal lands and waters. “No more drilling on federal lands, period,” he said at a campaign event in New Hampshire. “Period, period, period.”
In the Senate, there is growing optimism that Senate Majority Leader Charles E. Schumer (D-N.Y.) and Sen. Joe Manchin III (D-W.Va.), who effectively ended negotiations over a previous iteration of a sweeping package, can strike a deal.
Since December, when Manchin blocked Biden’s original Build Back Better proposal, the senator has expressed reservations about the price tag of any potential package, warning about the rising national debt and skyrocketing inflation. But with only 50 seats in the Senate, the party needs Manchin’s vote to pass any legislation. As a result, party leaders have relented and cut many of their domestic priorities from the proposed package.
Energy policy, though, is still expected to remain a centerpiece of the potential bill, as Manchin has long called for protecting the United States’ energy security and increasing its energy independence from foreign nations. But aides say negotiations over what the energy and climate components of the deal would look like are still underway and final decisions are probably weeks away.
In a statement Friday, Manchin said he was “pleased” the plan had come out, though he was “disappointed to see that ‘zero’ lease sales is even an option on the table.”
“Our leasing programs are a critical component of American energy security,” Manchin said. “I hope the administration will ultimately greenlight a plan that will expand domestic energy production, done in the cleanest way possible, while also taking the necessary steps to get our offshore leasing program back on track to give the necessary market signals to provide price relief for every American.”
Environmentalists and other Democratic lawmakers expressed their frustration with Biden considering any new offshore leases, given the risks posed by climate change and oil spills, while the industry representatives agitated for more auctions to lessen reliance on foreign energy.
“Holding any new offshore oil and gas lease sales over the next five years is a lose-lose for Americans,” Rep. Raúl M. Grijalva (D-Ariz.), who chairs the House Natural Resources Committee, said in a statement. “It will do nothing to help lower prices at the pump, and it will make our emissions goals virtually impossible to achieve.”
“It’s hugely important to recognize that the Biden administration has the discretion to propose a five-year leasing program that does not provide for any new lease sales,” said Drew Caputo, vice president of litigation for lands, wildlife and oceans at Earthjustice, an environmental law firm.
Industry officials called the proposal too restrictive.
“Today’s announcement sends more mixed signals from the administration and is another punch in the gut to consumers and businesses suffering from high energy prices and inflation,” said Marty Durbin, president of the U.S. Chamber of Commerce’s Global Energy Institute.
Federal law requires Interior to release a plan for new offshore oil and gas lease sales every five years, but the law gives the administration broad discretion. Biden officials said the crafting of the plan was fraught.
It came out as the administration struggles to chart its next steps on climate, given Thursday’s Supreme Court ruling. Biden officials said that while they had largely expected to lose the case, senior aides remain shocked and demoralized as they reckon with the limits on their ability to combat climate change. They conceded that there is a sense of despondency pervasive throughout the offices working on climate policy.
Gina McCarthy, Biden’s national climate adviser who crafted the EPA rule at the center of the Supreme Court case, has emphasized in recent days that the administration is focused on finding alternative ways, particularly through the Defense Production Act, to continue to meet their climate goals.
“His use of the Defense Production Act to accelerate all this domestic production is really, I think, going to be one of the ways in which this president makes it clear to people that he is going to keep driving the change that’s necessary,” McCarthy said in a recent interview with The Washington Post, referring to Biden’s push to make rare earth minerals available for the electrical vehicle market.
And the Rhodium Group, an independent research firm, said the administration can still achieve its climate targets despite the Supreme Court’s ruling.
Biden’s efforts to curtail fossil fuel drilling, however, have faced serious legal and political setbacks.
Soon after taking office, he followed up with an executive order instructing Interior to pause all new lease sales on public lands and waters while it reviewed how to adjust the program. A federal judge in Louisiana last year blocked that pause.
Republican lawmakers and oil industry lobbyists have urged the administration to boost America’s fossil fuel production to help curb record prices at the pump. The national average for a gallon of gasoline hit $4.84 Friday, according to AAA, up by more than 50 percent this year.
“If the administration is serious about reducing prices at the pump, they should be expanding access to oil and natural gas on federal lands, not killing it,” Sen. John Barrasso (Wyo.), the top Republican on the Senate Energy and Natural Resources Committee, said in a recent statement.
It takes about five to 10 years to start producing oil from a new offshore lease, according to the Interior Department. That means the proposal issued Friday will have little immediate impact on current prices at the pump — though it could have significant implications for the United States’ ability to meet its pledge to cut emissions by 2030 at least in half compared to 2005 levels.
Biden administration officials privately acknowledge that soaring fuel prices could imperil congressional Democrats’ chances in November’s midterm elections. They have taken several steps to lower gas prices that are anathema to climate activists, such as authorizing a historically large release from the Strategic Petroleum Reserve.
The western and central portion of the Gulf of Mexico makes up the heart of the U.S. offshore energy business, where about 1.7 million barrels of oil are extracted a day mainly off the coast of Texas, Louisiana, Mississippi and Alabama and piped to refineries to be turned into gasoline, jet fuel and plastics.
Energy companies have worked for years to drill for oil and gas well beyond the Gulf, off the East and West coasts. But those hopes dimmed in 2010 when a rig boring an offshore exploratory well exploded and led to the deaths of 11 crewmen, setting off the worst marine oil spill in U.S. history.
The Deepwater Horizon disaster killed hundreds of thousands of birds, uncorked millions of barrels of oil into the ocean and stymied efforts to expand offshore oil exploration in the United States.
After the spill, President Barack Obama halted plans to expand drilling to parts of the eastern Gulf, near Florida, as well as along the East Coast. His successor, Donald Trump, sought to expand drilling up and down the Atlantic and Pacific coasts, only to retreat after governors in both parties from Maine to Florida opposed the plan.
Even energy industry representatives concede there won’t be drilling soon in the Atlantic or Pacific.
“We understand, politically, there’s not going to be production there, potentially for a long time,” said Erik Milito, president of the National Ocean Industries Association, which represents offshore oil, gas and wind firms.
The Biden administration’s ability to carry out the president’s vow to stop new drilling is also being tested ashore, across hundreds of millions of acres managed by federal government out West.
Interior’s Bureau of Land Management netted $22 million by offering about 130,000 acres for drilling across seven states this week. Immediately, a coalition of environmental groups sued to stop the administration, urging it to find a way to forestall auctions despite facing a court order.
“Overwhelming scientific evidence shows us that burning fossil fuels from existing leases on federal lands is incompatible with a livable climate,” Melissa Hornbein, senior attorney with the Western Environmental Law Center, said in a statement.
