Progressive activists cheered President Joe Biden’s January 2021 executive order halting new oil and gas leases on federal property.
Their elation was short-lived, however, when a U.S. District Court judge squashed the move with a temporary injunction, calling the order “arbitrary and capricious.” Now, six weeks after the ruling, there is no sign the Biden administration has resumed selling oil and gas leases on federal land. Should the courts eventually favor the Biden administration’s position and allow the moratorium to continue after what is likely to be a lengthy legal battle, what would it mean for America?
The answer is clear: nothing good. Not only does this policy approach fail to accomplish Biden’s objective of “tackling the climate crisis,” but it does so at great cost to American jobs, tax revenue and the U.S. economy. And, perhaps even more importantly, it endangers national energy security.
Consider each point in turn.
Tackling the climate crisis. According to one estimate, Biden’s moratorium on new oil and gas leases on federal property would depress natural gas production and lead to a 15% increase in coal consumption by 2030. How does ramping up coal consumption help achieve the Biden administration’s climate objectives? (It doesn’t.)
Jobs. Millions of American jobs rely, both directly and indirectly, on oil and gas production, and as a result, the suspension could destroy over one million jobs. Texas alone could lose as many as 120,000 jobs. But as a share of total state employment, a de-facto ban would strike Wyoming hardest and decimate more than eight percent of the state’s jobs.
Tax revenue. According to a study funded by the Wyoming legislature and prepared by Dr. Timothy Considine, the moratorium could reduce state tax revenue by as much as $110 billion over the next twenty years for the eight states — Wyoming, New Mexico, Colorado, Utah, Montana, North Dakota, California and Alaska — most impacted by the moratorium.
Former State Sen. Eli Bebout, who served as Co-Chairman of Wyoming’s Joint Appropriations Committee wrote, “A ban on federal leasing of oil and gas is a devastating and costly policy to our local communities, to the State of Wyoming and throughout the West. The findings of this study are a vital tool in showing such a ban on leasing will be bad for Wyoming and the Nation’s energy backbone.”
The U.S. economy. According to the American Petroleum Institute (API), a ban along the lines Biden is attempting to impose would depress U.S. GDP “by a cumulative $700 billion through 2030.” That’s massive! To put that figure into perspective, Ohio’s gross state product — the state’s total economic output — amounted to $714 billion (at an annual rate) in Q1 2021. Bye-bye (the equivalent of) Ohio.
National energy security. Every U.S. president in modern times has pushed, extolled and exalted the promise of American energy security. Even President Obama once bragged: “We’ve opened up public lands. We’re actually drilling more on public lands than in the previous administration and … the previous president was an oil man. And natural gas isn’t just appearing magically. We’re encouraging it and working with the industry.”
The U.S. only recently achieved an important milestone on the path to diminishing our reliance on foreign nations for energy. For the first time since 1949, the country became a net petroleum exporter in 2020. That was no accident. New technologies, and federal public policies supportive of energy development, made that possible.
Yet, suspending new leases will lead to a significant reduction in U.S. natural gas and oil production. To fill the gap, API estimates “U.S. oil imports from foreign sources would increase by 2 million barrels a day” and, through 2030, “the U.S. would spend $500 billion more on energy from foreign suppliers.”
Biden should listen to his own Bureau of Land Management. According to the BLM: “Americans enjoy a quality of life today that depends largely upon a stable and abundant supply of affordable energy.” How does cutting domestic energy production accomplish that? Or help with jobs? Or help with tax revenue? Or help with the economy?
James Carter serves on the board of BIPAC, a bi-partisan organization working to improve the political climate in America. Previously, he served as deputy undersecretary of Labor under President George W. Bush.