Biden Admin. is Taking Another Action on Oil That's Not Reinstating Keystone Pipeline, Angering Both Sides

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Posted: Nov 26, 2021 7:30 PM
Biden Admin. is Taking Another Action on Oil That's Not Reinstating Keystone Pipeline, Angering Both Sides

Source: AP Photo/Jay Reeves

On Friday, the Biden administration announced yet another move to do with oil and gas prices that does not have anything to do with restoring the Keystone XL pipeline, which President Joe Biden killed as one of his first executive orders. Instead, a report from the Interior Department is calling on increasing fees for drilling on public lands. Some coverage has highlighted how this stops short of a full ban though, which some were hoping for.

As Rachel Frazin reported for The Hill:

A long-awaited report from the Interior Department recommends taking steps to increase fees for drilling on public lands, arguing that taxpayers are currently being shortchanged.

The department says that the Bureau of Land Management (BLM) should carry out several policies that increase these rates.

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Specifically, the report calls on BLM, which governs public lands drilling, to raise minimum royalties paid for onshore oil and gas leases, increase minimum bids that companies can make on tracts of land and rental rates that companies pay before they begin producing oil and gas on the leased lands.

It also calls for BLM to increase the surety bonds that companies pay the federal government as an assurance to make sure they are complying with their lease terms. 

In describing the changes, the report said that the tweaks to royalties specifically are only expected to have limited impacts on how much oil is drilled overall.

She also noted other areas where the report has fallen short:

But, it does not make similar concrete recommendations for offshore drilling, which accounts for 16 percent of all oil production and 3 percent of natural gas production in the U.S.

Instead, it notes that the Bureau of Ocean Energy Management is currently working on changes following a different report recommending that it ensure it is "capturing the full value" of the leases it offers. 

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The recommendations do not go as far as President Biden said on the campaign trail that he would in limiting oil and gas drilling. At the time, then-candidate Biden promised to effectively stop new drilling on federal lands and in federal waters by “banning new oil and gas permitting.”

Included in Frazin's reporting is a statement from Randi Spivak, public lands director at the Center for Biological Diversity:

Others, however, were less enthusiastic, saying the department should go further to prevent drilling. 

“These trivial changes are nearly meaningless in the midst of this climate emergency, and they break Biden’s campaign promise to stop new oil and gas leasing on public  lands,” said Randi Spivak, public lands director at the Center for Biological Diversity, in a statement. “Greenlighting more fossil fuel extraction, then pretending it’s OK by nudging up royalty rates, is like rearranging deck chairs on the Titanic.”

Coming at it from the opposite direction, is the American Petroleum Institute (API), which in a statement shared to Twitter, complained of "mixed signals."

"During one of the busiest travel weeks of the year when rising costs of energy are even more apparent to Americans, the Biden Administration is sending mixed signals," the statement from Frank Macchiarola, API's senior vice president for policy, economics and regulatory affairs, began. 

"Days after a public speech in which the White House said the president 'is using every tool available to him to wok to lower prices and address the lack of supply,' his Interior Department proposed to increase costs on American energy development with no clear roadmap for the future of federal leasing," the statement continued. 

Rep. Brad Westerman (R-AR) also criticized the move, referring to "continued attacks on domestic energy" from the Biden administration and a "war one safe, reliable, domestic energy."

His statement in full read:

"In what has become a clear pattern with the Biden administration, DOI is quietly releasing this report the Friday of a holiday weekend, months after they promised it, in the hopes that no one notices their continued attacks on domestic energy. Ironically, this is also coming mere days after President Biden announced he was releasing 50 million barrels of oil from the Strategic Petroleum Reserve in a last-ditch effort to stabilize the energy crisis of his own making. 

"The report basically pushed two major self-serving themes for the administration. The first is to downplay the volume of oil and gas produced on federal onshore and offshore leases. The second is to build a case saying the American taxpayer is being cheated and social and environmental justices are being violated so producers should pay more to produce on federal lands. Instead, the administration should ask themselves the obvious questions of why such a small amount of energy is produced from federal lands if it’s a giveaway to companies producing on federal lands and those companies can run roughshod over human rights and environmental laws, as they claim in their report. The truth is the administration's arguments are false, and are simply justifications to make it even harder and more expensive to produce energy on federal lands. 

"After keeping the entire energy industry in limbo for months, DOI's report shows they have only just begun their war on safe, reliable, domestic energy. They won't say that outright - they'll veil their attacks behind the guise of 'increased reviews,' 'necessary reforms,' 'adjusting royalty rates,' and more, but we know the real story. They will bog small energy companies down in years of regulatory gridlock, place millions of acres of resources-rich land under lock and key, ignore local input, and sell out to overseas suppliers. Ultimately, the American consumer will pay the price. Look no further than the skyrocketing prices you are already paying at the gas pump. We have every tool available to make America lead the world in energy reliability and environmental standards. Unfortunately, President Biden and his administration seem more committed to making us weaker on the global stage than to easing energy concerns for hardworking American taxpayers."

As Macchiarola and Rep. Westerman referenced in their statements, on Tuesday President Biden announced he was tapping into the oil reserves, which received criticism not just from Republicans, but from Sen. Joe Manchin, a moderate Democrat from West Virginia who issued a statement in his capacity as the Senate Committee on Energy & Natural Resources. 

His statement also called on Biden to reinstate the Keystone XL pipeline. 

There are also already concerns that the United States has come to depend too heavily on the Organization of the Petroleum Exporting Countries (OPEC).

Gas prices continue to surge. Writing for CNN, Matt Egan on Wednesday reported that "Thanksgiving gas prices are the highest since 2012."

The delayed report, which Biden ordered in January, was supposed to come out months ago, sometime in the "early summer." Coverage from Reuters noted that the Interior Department "repeatedly delayed it without explanation."

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