Biden facing pressure to lift pause on new drilling
Advocates for the US oil and gas industry called on the federal government to end a pause on drilling on federal lands after a judge ruled June 15 against the Biden administration’s moratorium.
Judge Terry Doughty of the US District Court for the Western District of Louisiana ruled that states had proved they would suffer financially from the pause on new oil and gas drilling outlined in an executive order issued by president Joe Biden in one of his first acts after taking the oath of office on January 20.
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In his ruling, the federal government is “hereby enjoined and restrained from implementing the pause of new oil and natural gas leases on public lands or in offshore waters.”
The American Petroleum Institute, an organisation representing the interests of US oil and gas companies, said it was time for the federal government to finally lift the moratorium.
“We are pleased to see the court ruling that natural gas and oil leasing must resume on federal lands and waters, and we urge the administration to move expeditiously to follow the court’s order and lift the federal leasing pause,” Kevin O’Scannlain, the API’s vice president for upstream policy, said.
O’Scannlain said the policy would force the US economy to rely more on imported oil.
Canada and Mexico are the top two oil exporters to the US, respectively. For the week ending June 4, Canada exported an average of 3.9mn b/d, up 7.8% from the same period in 2019. Mexico during the same week sent an average of 423,000 b/d, down 51.6% from the same period in 2019. Only two countries from the Middle East, Saudi Arabia and Iraq, sent oil to the US economy during the week, sending 317,000 b/d between them.
Canada is also a top natural gas exporter to the US economy.
Erik Milito, the president of the National Ocean Industries Association, said the pause in drilling activity was a blow to the US economy.
“Offshore oil production has the lowest carbon intensity of the oil producing regions, supports more than 345,000 jobs, many of which are accessible, high-paying and cannot be easily substituted, and generates vital government revenues for conservation and recreation programs, including ones in economically distressed urban areas,” he said.
Biden’s executive order limits only new drilling activity. For the week ending June 11, the Baker Hughes rig count showed five more rigs were in service than the previous week. At 461 rigs, the count is up 182 from last year, when crude oil prices were low enough to discourage upstream activity.
A statement from the Interior Department published by the Reuters news service said the government "will include initial findings on the state of the federal conventional energy programs, as well as outline next steps and recommendations for the Department and Congress to improve stewardship of public lands and waters, create jobs, and build a just and equitable energy future."
Alabama, Alaska, Arkansas, Georgia, Louisiana, Mississippi, Montana, Nebraska, Oklahoma, Texas, Utah and West Virginia challenged the federal moratorium. Wyoming has its on legal challenge against the pause.