President Biden is facing growing bipartisan backlash over his order to pause new oil and gas drilling on federal lands, including from some Democrats who also support the Green New Deal environmentalist makeover of the economy.
New Mexico’s two Democratic senators wrote to White House climate adviser Gina McCarthy warning that a permanent drilling ban would cripple their state’s economy.
“An extended and indefinite suspension would have significant impacts on our workforce and state funding for education and creates unnecessary uncertainty for New Mexico’s state and local tax revenues,” wrote Sens. Martin Heinrich and Ben Ray Lujan.
During his first week in the White House, Mr. Biden issued a wide-reaching executive order to put combatting climate change at the center of his government.
Part of that declaration hit the pause button on new oil and gas drilling leases on federal lands. The pause is supposed to be in effect until federal authorities can conduct a thorough “review and reconsideration” of the climate impact of “oil and gas activities.”
Concerns emerged that Mr. Biden’s pick to lead the interior department, Democratic Rep. Deb Haaland of New Mexico, will keep the ban in place. Ms. Haaland previously said that “it would be great to stop all gas and oil leasing on federal and public lands.”
The White House did not immediately return requests for comment on this story.
As Ms. Haaland inches closer to confirmation, with a full vote expected by the Senate next week, even avowed supporters of the Green New Deal from her home state, like Sens. Heinrich and Lujan, are pushing the president to commit to ending the leasing moratorium at some point.
The senator’s letter underscores the reality facing states where the oil and gas industry plays a large role. In New Mexico, the industry employs more than 100,000 residents with annual employee salaries averaging more than $71,000. Even more notably, oil and gas revenues made up more than $3.1 billion in tax revenue — 39 percent of the state’s budget — in 2020.
Given the very real prospect of losing tax dollars because of the White House’s climate agenda, a bipartisan coalition is forming on Capitol Hill to oppose a permanent leasing ban.
Republican Sen. Chuck Grassley of Iowa and Democratic Sen. Jacky Rosen of Nevada this week unveiled legislation that would make the oil and gas leasing process more lucrative for the government, adding incentive for Mr. Biden to lift the ban.
The bill would raise the royalty rates that energy companies must pay the government for the right to drill on public lands. Such rates were codified in 1920 and have largely remained the same.
Currently, companies are required to pay 12.5% to lease an onshore tract of public land for drilling. The bill would raise that figure to 18.75%. It would also mandate that the minimum bidding price for federal leases would rise from $2 per acre to $10 per acre.
“The current federal oil and gas program is broken, and fails to protect our public lands and the American people,” said Mrs. Rosen.
Mr. Grassley said the bill would “bring oil leasing into the 21st century.”
“Congress has not addressed this issue for over 100 years and since then, these oil companies have deprived the treasury and the American people of billions of dollars,” he said.
The bill is touted on Capitol Hill and in the energy industry as a way to overhaul the oil and gas leasing system rather than banning the practice.
Many of the Democrats lining up behind the bill believe it will also decrease drilling on public lands since energy companies likely will be more selective in buying leases as the price goes up.
View original post