Biden administration pausing new oil and gas leases amid legal battle

On Feb 24, 2022

An oil pumpjack (L) operates as another (R) stands idle in the Inglewood Oil Field on January 28, 2022 in Los Angeles, California.

Mario Tama | Getty Images

The Biden administration is delaying decisions on new oil and gas leases and permits after a Louisiana federal judge blocked officials from using higher cost estimates of climate change when making rules for polluting industries.

The leasing pause is an unintended result of the Feb. 11 decision by U.S. District Judge James Cain, who sided with a group GOP-led states and argued that the Biden administration’s attempt to raise the real cost of climate change would hike energy costs and hurt state revenues from energy production.

The ruling has prompted delays and uncertainty across at least four federal agencies that were using higher cost estimates of greenhouse gas emissions in decisions, including plans to restrict methane emissions from natural gas drilling and a grant program for transit projects. It also continues a contentious legal battle that has hampered Biden’s plans to address climate change.

One of the most significant and unintended outcomes of the ruling is the government’s pause on new oil and gas leases and permits to drill on federal lands and waters. Lease sales in states across the U.S. West, including Montana and Wyoming, are now delayed.

“Agencies are experiencing significant delays and wastes of resources as they scramble to rehash economic and environmental analyses prepared in connection with a broad array of government actions,” the Department of Justice wrote in a legal filing on Saturday.

“Work surrounding public-facing rules, grants, leases, permits, and other projects has been delayed or stopped altogether so that agencies can assess whether and how they can proceed,” the department wrote.

A pause on new leases and permits

On his first day in office, Biden restored the climate cost estimate to roughly $51 per ton of carbon dioxide emissions, following the Trump administration decision to cut the number to roughly $7 or less per ton and account only for the impacts in the U.S. rather than across the world.

The “social cost of carbon” estimate accounts for effects of events like droughts, wildfires, and storms that have grown more frequent and intense with climate change.

In his order, Cain wrote that using such a metric in oil and gas lease reviews would “artificially increase the cost estimates of lease sales,” which would directly impact states receiving bids and production royalties through energy production.

The judge also wrote that the president didn’t have the authority to make a change to the figure through executive order and violated federal law by implementing new rules without getting public comment.

“The President lacks power to promulgate fundamentally transformative legislative rules in areas of vast political, social, and economic importance,” Cain wrote in the injunction.

Max Sarinsky, a senior attorney at the Institute for Policy Integrity at New York…