Biden Climate Plan Includes Oil-Lease Pause, Subsidy Review

Biden Climate Plan Includes Oil-Lease Pause, Subsidy Review

15:23 - President Joe Biden will take executive action on Wednesday to combat climate change, including temporarily blocking new leases for oil drilling on federal lands, ordering a review of fossil-fuel subsidies and other measures to overhaul the U.S. energy mix.

Biden will sign broad-ranging directives instructing federal agencies to consider climate change in everything from government purchases to national security. He will order U.S. intelligence authorities to estimate how climate change affects national security and tell agencies to do a better job assessing the threat.

“Just one week into his administration, President Biden is continuing to move us forward at the breadth and the pace that climate science demands,” said White House national climate adviser Gina McCarthy. “We’re going to power our economy with clean energy” and do it in a way that will produce millions of good-paying jobs.

Much of the action has been telegraphed previously and builds on promises Biden made on the campaign as part of his bid to make the U.S economy carbon neutral by 2050. It’s not clear he’ll be able to do everything unilaterally.

For instance, Biden is directing federal agencies “to eliminate fossil fuel subsidies as consistent with applicable law,” and instead seek “new opportunities to spur innovation, commercialization and deployment of clean energy technologies and infrastructure,” according to the White House.

However, while the Biden administration has some latitude to shift some funding for innovation at the Energy Department, abolishing tax incentives that support fossil fuel development, such as deductions for intangible drilling costs, would require action by Congress.

Still environmentalists were cheering the move as the boldest action by a president yet to confront the climate crisis and the fossil fuels that drive it.

“The era of putting polluters’ profits first is over,” said Josh Axelrod, senior advocate for the nature program at the Natural Resources Defense Council. “We can’t lock our children and grandchildren into decades more of the dirty fossil fuels of the past, and all the hazards and harms they bring to our public lands, oceans and coastal communities.”

Supporters of the fossil fuel industry said jobs would be lost. Wyoming Governor Mark Gordon, a Republican, said the president’s moves “will divide and alienate the very working-class American communities with whom the Biden administration has pledged to unite.”

And Mike Sommers, head of the American Petroleum Institute, called Biden’s directives “a step backwards for environmental progress” that will “weaken U.S. energy leadership, hamper the economic recovery and undermine national security.”

“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 with lower environmental standards that are hostile to American interests,” Sommers told reporters on a conference call.

Biden’s order directs federal agencies to purchase zero-emission power and automobiles, such as electric vehicles, as a way to “leverage the federal government’s footprint and buying power to lead by example,” according to the White House fact sheet. The U.S. maintains fleet of 645,000 vehicles and operates nearly 10,000 buildings, according to the General Services Administration.

Biden is also inviting world leaders to a climate summit on April 22 -- Earth Day -- in a sign of the new president’s commitment to not just rejoin the Paris climate accord but strengthen it. The president’s efforts Wednesday kick off work to develop a new, stronger U.S. carbon-cutting commitments well as a climate finance plan, according to the White House.

“The stakes on climate change just couldn’t be any higher than they are right now,” said Special Presidential Envoy for Climate John Kerry, who is leading the U.S. work with other countries to ratchet down emissions globally. “It is existential.”

Oil and coal workers will have new opportunities, and the president is committed to growing new, well-paying jobs through climate action, Kerry said.

“Workers have been fed a false narrative” that “dealing with climate is coming at their expense,” Kerry said. Instead, he said, “there’s a lot of money to be made in the creation of these new jobs in these new sectors.”

While Biden is taking action domestically, U.S. moves -- including rejoining the Paris climate accord -- aren’t enough to combat the scale of the threat, Kerry said. “Paris alone is not enough, not when almost 90% of all of the planet’s emissions come from outside U.S. borders. We could go to zero tomorrow and the problem isn’t solved,” Kerry said.

The Biden administration is developing a new carbon-cutting commitment, building on the target Obama pledged when the U.S. joined the Paris climate agreement in 2015. The new pledge will be “the most aggressive” the U.S. can make and will be announced before the Earth Day summit, McCarthy said.

The president’s announcements come as his administration has made climate change one of its top priorities -- seeking to marshal the entire federal government to combat the crisis.

The work will be buttressed by new government commissions focused on climate, job creation and environmental justice. Biden will establish a climate-focused civilian conservation corps along the lines of the program created by President Franklin Delano Roosevelt during the Great Depression.

Biden is committing to conserve 30% of U.S. lands and waters by 2030 and revitalize communities that have borne the brunt of pollution. It is unclear what form those protections might take but conservation could involve designating areas as wilderness, refuges or national monuments -- and walling off industrial development or even hiking and other recreational activity. And the goal could even encompass private land, as Biden directs the U.S. Department of Agriculture to consider ways to encourage climate-friendly agricultural practices that help store carbon.

The efforts will help restore forests, sequester carbon and revitalize wetlands, said Collin O’Mara, president of the National Wildlife Federation. Biden is “advancing solutions that will accelerate our economic recovery and revitalize frontline communities, while simultaneously confronting our nation’s biodiversity, climate and racial justice crises,” O’Mara said.

Biden’s temporary halt of the sale of new oil and gas rights on federal lands and coastal waters buys time for “a rigorous review” of the government’s leasing programs, according to the White House. About 22% of total U.S. crude supplies and 12% of U.S. natural gas came from federal lands and waters in 2019, according to the Energy Information Administration.

The order doesn’t freeze leases for coal mining on federal lands, but McCarthy said that would be part of the review of the use of federal lands. “It was not part of the commitments on the campaign,” she said.

Under the order, Biden is directing the Interior Department to pause entering into new oil and natural gas leases “to the extent possible,” while looking for ways to double renewable energy production from offshore wind by 2030. The construction of just one new coastal wind farm could be enough to fulfill the pledge, with just two small projects currently operating near Rhode Island and Virginia. New installations are already planned up and down the U.S. coast, pending the agency’s approval.

“The oil and gas leasing moratorium won’t affect ongoing operations under existing leases or activities on lands the U.S. holds in trust for tribes. Oil companies stockpiled leases and drilling permits in advance of Biden’s election, further blunting the effect. And the Interior Department has already approved more than two dozen drilling permits since Biden took office.

States will continue to accrue royalties from oil, gas and coal development on federal lands, McCarthy said.

Still, it could deliver a big economic blow to New Mexico, North Dakota and other states with substantial oil and gas reserves on federal land. The effects on the oil industry also will be uneven, with the impact falling heaviest on producers with significant federal acreage, such as Devon Energy Corp. and Cimarex Energy Co. onshore and Murphy Oil Corp. offshore.

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