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SHRINKING: The Biden administration is going for a next-best approach in reforming the federal oil and gas leasing program after facing obstacles in the road toward ending new leasing altogether, as President Joe Biden had promised.
The administration resolved to comply with U.S. District Judge Terry Doughty’s decision last June, which enjoined Biden’s pause on leasing, while the Justice Department appeals. But in the meantime, it’s scaling down the amount of federal acreage offered or eligible to be offered to prospective buyers.
The Bureau of Land Management issued a record of decision yesterday to restrict the share of the oil-rich National Petroleum Reserve-Alaska that can be leased to just over half.
BLM, which previewed this decision in a January court filing, reformed the “integrated activity plan” developed for NPR-A during the Trump administration, which sought to make 18.6 million of the reserve’s 23 million acres eligible for oil and gas development.
The Biden administration will instead manage NPR-A “consistent with” the Obama administration’s plan for NPR-A, BLM said yesterday, which restricted oil and gas development to 11.8 million acres.
BLM said its new plan also includes “certain more protective lease stipulations and operating procedures for threatened and endangered species” as compared with the Trump era plan.
The bureau’s NPR-A decision follows its announcement last week that it will hold multiple onshore lease sales this summer, although the 144,000 acres to be sold amount to an 80% reduction of what was previously proposed. It will charge higher royalties, too.
Promises made: Biden was explicit during the presidential campaign that he sought no more drilling on federal lands and waters, and officials are out on a circuit to defend administration actions in response to frustration from environmental groups who want to see Biden more aggressively target fossil fuels.
The White House and other administration officials maintain the Interior Department’s lease sales reflect compliance with the court rather than a walk-back of Biden’s intentions, and they see in the reformed terms of the upcoming sales some kind of concrete changes to show before complainants.
White House national climate adviser Gina McCarthy said last week Biden “remains absolutely committed to not moving forward with additional drilling on public lands.”
Of the lease sales in particular, she emphasized that BLM “found ways to reduce the size of that and its impact.”
Reaction: Kristen Miller, conservation director for Alaska Wilderness League, said BLM’s plan for NPR-A is the “right move” and criticized the Trump administration’s, but said the Biden administration “should move quickly to put in place durable regulations” to fight climate change in Alaska.
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BIPARTISANSHIP FEATURES IN MANCHIN’S LATEST POSITIONING: Sen. Joe Manchin now says he’s working toward bipartisan energy and climate legislation.
Major bipartisan legislation would give something for Biden and Democrats to run on before the election, but it would also surely be a far cry from the sweeping climate provisions that liberal environmental activists hoped for at the outset of the 117th Congress. It would also probably represent the end of hopes for a partisan legislative package passed through the reconciliation process that included other Democratic priorities.
“If I can find something bipartisan, we don’t need reconciliation,” the West Virginia centrist told Bloomberg yesterday.
For that possibility, Manchin would need 10 Republican votes if he kept all Democrats onboard – which is certainly not a given. Still, the passage of bipartisan infrastructure legislation last year shows that there is considerable willingness within the Senate, particularly, between the parties to pass bills where it makes sense.
Manchin on the leasing program: Manchin also waded into the debate over the federal oil and gas leasing program, saying members of Congress “need to look at” it.
The leasing program has been central to debate in recent months about what kinds of policies are contributing to high oil and gas prices and how the administration should respond to them.
Some number of Manchin’s colleagues, Biden himself, and the Democrats’ key environmentalist constituencies want to end new leasing altogether, especially considering that several thousand active leases are not producing oil and gas currently.
“You’re going to have to have a leasing program that works, O.K., and making sure that leases are fair, and people are not sitting on leases,” Manchin said. “We need to look at all that. We haven’t done that.”
The industry has made several arguments in response to those charging it simply wants to stockpile leases, including that development of oil and gas reserves takes time, that leasing serves companies’ longer term interests and viability, and that it’s not economically justifiable at any given time to drill on every parcel.
Manchin notably shared some advice to the industry in public comments earlier this month directed to oil companies, who had been battling price-gouging allegations and trying to justify their business strategies.
Ahead of oil executives’ big hearing before the House Energy and Commerce Committee, he encouraged them to “tell your story” about how the industry works and how they operate, “or [committee Democrats are] going to tell one on you.”
“You ought to basically be able to show a 10 year window,” he said during a natural gas-focused event hosted by LNG Allies on April 5.
Dan Naatz, executive vice president of the Independent Petroleum Producers of America, noted as other industry leaders have that companies pay rents on leased lands. He said leases run for 10 years for “good reason” because “a lease awarded today does not equal a producing well tomorrow or even this year.”
“Independent oil and natural gas producers do not sit on leases they acquire on onshore and offshore federal lands,” Naatz said in a statement provided to Jeremy. “It is in a company’s best interest to develop the leases they acquire.”
NOTABLE ELECTRIC VEHICLE DEVELOPMENTS: Ford Motors launched production of its all-electric F-150 pickup truck today, a major milestone that comes as Ford CEO Jim Farley hopes to broaden the appeal of America’s longtime best-selling vehicle and beat competitors to the market in producing the country’s first full-size electric pickup truck.
Ford’s investment in its electric F-150, dubbed the Lightning, already appears to be paying off: Ford said it is working to increase its original production target to 150,000 vehicles in the next year, roughly tripling its original target of 40,000 vehicles.
“In this market, being a first mover is a very, very important move,” Farley told CNBC. “We didn’t know we’d be first, but we worked fast in case we were, and it’s worked out that way. I think it could be one of the most important advantages we have.”
Farley added that he is “confident” Ford can hit its 150,000 production target, telling CNBC that it has secured the amount of lithium-ion batteries needed to produce at that scale.
And an electric Corvette: Meanwhile, General Motors announced yesterday that it is developing an all-electric version of its Corvette sports car, in addition to a previously announced hybrid model that is slated to arrive at dealerships as early as next year.
The timeline for production of the all-electric Corvette remains unclear, the Wall Street Journal reports. U.S. automakers are racing to compete with Tesla and capitalize on the push toward electric vehicles. GM President Mark Reuss declined to offer specifics in announcing the company’s plans yesterday, telling reporters that further details will be available “at a later date.”
ENERGY DEPARTMENT SAYS ‘LIGHTS OUT’ FOR LOW-WATT BULBS: The Department of Energy announced two new rules aimed at phasing out the use of incandescent lightbulbs in the U.S., reversing a Trump-era policy as it seeks to curb annual carbon emissions and shift the U.S. towards more efficient sources of lighting.
Under the rules announced yesterday by DOE, U.S. manufacturers must begin phasing out bulbs that produce less than 45 lumens per watt. When combined, the department said, the measures will save consumers an estimated $3 billion annually– though the decision is still likely to irk fans of the old-fashioned bulbs, whose purchases still make up roughly 30% of the market.
“By raising energy efficiency standards for lightbulbs, we’re putting $3 billion back in the pockets of American consumers and substantially reducing domestic carbon emissions,” Energy Secretary Jennifer Granholm said in a statement shared by the Washington Post.
Granholm added that the changes will cut carbon emissions by more than 220 million metric tons over the next 30 years. But it also said full enforcement of the rule will not begin until at least June of next year – giving manufacturers, retailers and distributors months of runway to comply with the rules – and to sell out their existing supply of low-watt bulbs. Read more from Breanne here.
Flashback – Trump complained about new lightbulbs: “It doesn’t make you look at good. Being a vain person…I don’t want an orange look,” Trump said in a December 2019 meeting.
BIG BRANDS ASK CONGRESS FOR GREEN ENERGY SPENDING: Several dozen large corporations across sectors are asking Congress to pass legislation with new green energy spending and tax credits.
Signatories to the letter, which was arranged by green financial group Ceres, include Adobe Inc., Airbnb, Levi Strauss & Co., and Shell USA. They ask particularly for tax credits to incentivize more utility-scale renewable energy, spending on “clean energy supply chains,” and new electric vehicle tax credits for corporate fleets.
THE LATEST ON THE GLOBAL ENERGY CRISIS: CNX president and CEO Nicholas DeIuliis joined former FERC chairman Neil Chatterjee and energy reporter Breanne Deppisch on this week’s “Plugged In” podcast discuss the latest in the energy security debate—in particular, how the West became so dependent on Russian oil, and how we can strike a balance between meeting existing energy needs while also investing in natural gas and other cleaner, more reliable sources of energy. Listen to the full podcast here.
The Rundown
Euractiv Germany revamps 1975 oil crisis law in face of new energy supply threats
Associated Press China promotes coal in setback for efforts to cut emissions
Calendar
THURSDAY | APRIL 28
10:00 a.m. House Energy and Commerce’s Energy Subcommittee will hold a hearing with Secretary Jennifer Granholm on the fiscal year 2023 budget request for the Energy Department.
10:00 a.m. 2318 Rayburn The House Science, Space and Technology Committee will hold a hearing on climate change mitigation.
