Biden's oil & gas order misguided, locals say

By John Rogers 

It didn’t take Pres. Joe Biden very long following his inauguration to begin granting the wishes of his liberal base, including a number of decisions that affect the oil, gas and mining industries. And it took even less time for the reaction to his orders — from both sides of the political spectrum — to start flowing in from stakeholders, including those in Utah.

Biden signed executive orders late last month pausing mineral leasing along with new mining, drilling and fracking activities on federal lands for one year. The order came a few days after the president signed a moratorium that put drilling and fracking on hold for 60 days and is framed as fulfilling his campaign trail promises to combat climate change. Biden’s platform called for the U.S. to phase out its dependence on fossil fuels.

In Utah, reaction to the president’s orders were strong and predictable, with newly elected Gov. Spencer Cox leading the expressions of outrage from the state’s elected officials.

“Unity in our nation can only be reached when we work together to solve complex challenges,” Cox said in a statement released just hours after Biden signed his order. “I’m disappointed in President Biden’s decision to indefinitely pause all new oil and gas leasing on federal lands. His action was taken without coordination with the state to determine how his decision would impact rural Utah and those that live there.”

Biden’s order does not limit ongoing oil, gas and mining operations on existing leases but bars startup activity on public lands. That means that activities the administration has promised to curtail won’t come to a grinding halt. The order also allows top government officials within the Interior Department, such as the secretary, deputy secretary, solicitor and several assistant secretaries, to grant exceptions to the order.

“While the president’s order does not suspend existing leases, a long-term pause and its accompanying hold on new energy development harms future production and investment statewide,” said Cox. “Two-thirds of our lands are public lands managed by the federal government. As with last week’s moratorium on mining and energy development, today’s order curtails future investment in Utah, weakens rural Utah’s economy and keeps many Utahns from being able to provide for their families.”

Most of Utah’s other high-ranking elected officials joined Cox in a group statement condemning the administration’s actions, calling them a “serious mistake.” In addition to Cox, signatories to the letter included Lt. Gov. Deidre Henderson; Utah U.S. Sens. Mike Lee and Mitt Romney; U.S. Reps John Curtis, Blake Moore, Chris Stewart and Burgess Owens; Utah Senate President Stuart Adams; House Speaker Brad Wilson and Attorney General Sean Reyes.

“The economic impacts of this decision will be felt nationwide and couldn’t come at a worse time for Utah’s rural communities, tribes and small businesses,” the politicians’ statement said. “Our energy industry is among the hardest hit by the pandemic. Utahns previously employed in the energy sector have lost their jobs in historic numbers. This decision only exacerbates the problem.”

“This action perpetuates the very discord between rural and urban Americans that the president spoke out against in his inauguration speech,” the statement continued. “Although it is routine for an incoming administration to pause high-level agency decisions while agency leaders get into place, such a widespread suspension of routine permitting decisions normally made in the field is unprecedented.”

“We encourage Pres. Biden to reconsider this counterproductive step. We are eager to work with his administration to improve management of our public lands, but gratuitously punishing our rural economy is not helpful,” the statement concluded.

Although Biden’s initial order did not specifically mention mineral activities on Native American tribal lands, the lands were exempted in the final version, likely in response to a plea from tribal leaders. In an appeal to the president sent before the final order was issued, Luke Duncan, chairman of the Ute Indian Tribe Business Committee, said “the Ute Indian Tribe of the Uintah and Ouray Reservation respectfully requests that the order be amended immediately to allow for energy permits and approvals on Indian lands.” The letter said that the Ute Tribe and other energy-producing tribes rely on energy development to fund their governments and provide services to members. Duncan claimed that Biden’s order violates the United States’ treaty and trust responsibilities to the Utah tribe.

The Utah Petroleum Association (UPA), perhaps the oil and gas producers’ strongest ally in opposing the president’s actions, came out with a strongly worded response to the administration.

“The impacts of the one-year oil and natural gas leasing ban on federal lands will have profound and far-reaching negative consequences on Utah’s economic health, needed maintenance for our national parks, and have an outsized impact on our rural communities,” the association said.

UPA cited a study from the University of Wyoming Department of Economics and Finance Professor Timothy Considine finished in December in anticipation of expected actions by the incoming administration. Concerning the Utah petroleum industry, Considine concluded that “during the first year under a leasing moratorium, value added is $169 million lower, which drags down personal income by $81 million and lowers the employment level by 1,426.”

“Most of Utah’s federal natural gas properties are located in rural areas, particularly in the Uintah Basin, where oil and gas income provide a lifeline of financial support for education, health care and other public services, especially for local governments and special districts,” said Utah Petroleum Association President Rikki Hrenko-Browning. “These losses in the oil and gas sector spill over to the Utah economy writ large, the effects of which are exacerbated by the damage caused by the COVID-19 pandemic.”

UPA also cited the effects Biden’s action could have on Utah’s national parks. Passed in 2020, The Great American Outdoors Act directs up to $1.33 billion annually from oil and gas royalties on public lands to help fund the National Park Service’s $12 billion maintenance backlog. Although the immediate effect of the Biden orders on the funding of the The Great American Outdoors Act is unknown, Utah parks have 11 projects in line for these funds in 2021.

Of course, supporters of the presidential orders reacted as quickly as the detractors. Advocates of climate change legislation and environmental protection proponents applauded the actions.

“We are grateful that Pres. Biden is following through on his commitment to reassert our nation as a climate leader, not a climate denier,” said Southern Utah Wilderness Alliance legal director Steve Bloch. “The president’s decision to order a pause on new oil and gas leasing on federal public lands is a common sense and desperately needed step to right the ship and chart a more thoughtful, climate conscious path forward as our nation ‘builds back better.’” “Build Back Better” is the name given by Biden to his jobs and economic recovery plan.

“Hitting pause on oil and gas leasing is a crucial first step toward reforming a rigged and broken system that for too long has put oil and gas lobbyists ahead of the American people,” said Jesse Prentice-Dunn, policy director for the Center for Western Priorities. “This temporary pause in leasing will give Secretary [Deb] Haaland and the Interior team time for a top-to-bottom review and give Congress time to pass long-overdue legislation to overhaul an outdated system that has enriched oil and gas CEOs at the expense of America’s land, water and wildlife.”

Meghan Schneider of Climate Power 2020, a political action organization backed by the Sierra Club, said in a statement, “Today, Pres. Biden announced a series of bold executive orders focused on tackling the devastating effects of the climate crisis and creating millions of clean energy jobs. This is good news for Utah, as the state is expected to suffer some of the most consequences of climate change.”