As oil prices continue to rocket, now further helped along by Russia's invasion of Ukraine, the Biden administration is still fighting tooth and nail to freeze new oil and gas drilling leases - even after a court ruled against the administration for using a metric to estimate "the societal cost of carbon emissions" to justify their move.
Despite the court's ruling, Biden's administration has stopped new leases and permits for federal oil and gas drilling, MSN reported this week.
The administration was previously prevented from using the "social cost of carbon" metric in decisions regarding oil and gas thanks to an injunction issued by US District Judge James Cain of the Western District of Louisiana.
But government lawyers quickly appealed the injunction, arguing that it "necessitated a pause on all projects where the government was using a social-cost-of-carbon analysis in its decision-making". This, in turn, allowed the Biden administration to freeze oil and gas projects.
The metric in question uses economic models to put a value on each ton of carbon dioxide emitted, MSN reported, with the intention of quantifying the economic harm of climate change.
Biden's lawyers argued: "The consequences of the injunction are dramatic. Pending rulemakings in separate agencies throughout the government -- none of which were actually challenged here -- will now be delayed. Other agency actions may now be abandoned due to an inability to redo related environmental analyses in time to meet mandatory deadlines."
Interior Department spokesperson Melissa Schwartz added: "The Interior Department has assessed program components that incorporate the interim guidance on social cost of carbon analysis from the Interagency Working Group, and delays are expected in permitting and leasing for the oil and gas programs."
Schwartz says the Interior Department "continues to move forward with reforms to address the significant shortcomings in the nation's onshore and offshore oil and gas programs," the report noted.
The timing couldn't be worse for the administration, as this week's invasion of Ukraine by Russia has pushed brent well above $100/barrel. We noted earlier this week that JP Morgan has suggested oil could average at about $110/barrel for the remainder of the year - but this prediction was also before the current geopolitical conflict in Europe escalated.
More Top Reads From Oilprice.com:
- Oil Prices Retreat As Biden Leaves Energy Out Of Sanctions Package
- U.S. Rig Count Gains For 18th Straight Week
- Oil Prices Fall As Russia's Energy Industry Avoids Sanctions