However, many coastal states that rely on oil and natural gas are unlikely to welcome the administration’s actions.
One of President Joe Biden’s campaign promises as a presidential nominee was to take a new approach to energy policy. As president, one of the Biden administration’s first actions was a 60-day moratorium on drilling on federal lands.
In a further push toward green energy, Deb Haaland, Biden’s secretary of the interior, paused new oil and natural gas leases offshore and on public land, extending the moratorium to one year. The pause halts leasing of fossil-fuel rich areas so the administration can effectively measure the environmental impact such drilling has on the local environment.
However, many coastal states that rely on oil and natural gas are unlikely to welcome the administration’s actions.
Moratorium explained
Biden’s moratorium comes at a time when the Democratic Party wants to push the country toward green energy. The current president campaigned on the promise of cutting the United States’ reliance on fossil fuels while increasing the number of jobs produced by the green energy industry.
The actions Biden took on the first day of his presidency were a direct response to those of former-President Donald Trump. Before leaving office in January 2021, the Trump administration went on a last-minute selling-spree of federal land leases, granting private companies access to areas of the country that had been protected for generations.
In an attempt to tap into one of the last unspoiled resources before Biden took office, the Trump administration held auctions for oil and gas leases in Alaska’s Arctic National Wildlife Refuge. Capping off one of the most significant environmental protection rollbacks in a presidency, Trump hoped to raise close to US$1 billion in revenue.
In reality, though, the auctions generated less than US$15 million in leases. Most of this is due to the pressure conservation groups applied to financial institutions, which ultimately resulted in none of the big oil companies putting in bids.
Biden and Democrats on Capitol Hill hope to put together legislation that will guarantee protections for these public lands well into the future.
Backlash from both sides of the aisle
Though Biden and many congressional Democrats are on the same page, the speed and timing of the ban has worried many state and federal leaders across the country.
After Biden released his plan placing a moratorium on leases for fossil fuel excavation, four House Democrats from Texas sent a letter expressing their alarm at the timing of the ban.
“A federal ban for any period of time will certainly imperil hundreds of thousands of jobs, entire communities, and billions of dollars in royalty revenues to the Federal Treasury,” they wrote, stressing the importance of rebuilding the economy as the pandemic comes to an end.
Louisiana politicians have also pressured the president. As a large producer of natural gas and oil, the state relies on tax revenue produced by offshore drilling in the Gulf of Mexico.
Republican Senator Bill Cassidy said in a statement, “Biden’s executive orders are counterproductive. They eliminate jobs and send them overseas to countries with worse environmental standards, increasing global emissions.”
Governor John Bel Edwards, a Democrat, also disagreed with Biden’s policies, but he approached the situation less confrontationally than his Republican counterparts.
Louisiana Natural Resources Secretary Thomas Harris explained that Edwards was making his case to Biden by “arguing. He’s working it every day. He’s constantly calling me looking for new ammunition.”
Edwards’s approach, however, was not enough for Republicans in the state and around the country.
Jeff Landry, Louisiana’s Attorney General, led a 13-state lawsuit against the Biden administration’s leasing ban, claiming the moratorium “impacts and harms Louisiana by reducing revenue and royalties from federal oil and gas leases.”
The lawsuit added, “Biden’s Executive Orders abandon middle-class jobs at a time when America needs them most and put our energy security in the hands of foreign countries.”
States like New Mexico also have budgets that heavily rely on the oil and gas industry, but they may not feel the effects immediately.
More than 54% of oil and gas revenue is produced on federal lands, Ryan Flynn, the president and chief executive officer of New Mexico Oil & Gas Association, claimed. Though the state would not likely feel the effects of the moratorium this year, Flynn expressed the importance of renewing federal leases.
“We need to be consistently bringing new production online in order to sustain the pace of [previous] production,” he told state officials.
Biden’s plan addresses the job losses and tax revenue decrease, at least theoretically.
“A key plank of our Build Back Better Recovery Plan is building a modern, resilient climate infrastructure and clean energy future that will create millions of good-paying union jobs,” he said in an address after signing executive orders addressing climate change on January 27. “Not 7, 8, 10, 12 dollars an hour, but prevailing wage and benefits.”
With new green jobs and wages will come additional tax dollars, but with so many states relying on oil and natural gas, the speed at which Biden unveils these jobs will likely play an important part in whether Democrats are able to stay in power.
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