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Biden Administration Appeals Ruling On Oil, Gas Lease Ban

The Biden administration has filed an appeal against a ruling by a federal judge against the oil and gas leasing ban the administration enforced earlier this year.

“The appeal of the preliminary injunction is important and necessary,” the department said in a statement. “Together, federal onshore and offshore oil and gas leasing programs are responsible for significant greenhouse gas emissions and growing climate and community impacts.

“Yet the current programs fail to adequately incorporate consideration of climate impacts into leasing decisions or reflect the social costs of greenhouse gas emissions including, for example, in royalty rates.”

The appeal also noted the department’s “stewardship responsibilities” that were not reflected in the oil and gas leasing terms previously.

In January, the White House said it would review the margin for potential changes in the existing regulation for the issuance of oil and gas leases, and for the duration of this review, new oil and gas leasing would be suspended.

The ban, although temporary, raised a lot of hackles in oil-dependent states. The immediate impacts of that pause were at the time considered likely to be negligible, but in the medium to long term, new regulations could have far-reaching consequences.

These would be true not only for the U.S. shale industry and conventional production offshore, but it would also affect the oil revenues and budgets of states where a large part of the drilling activity currently takes place on federal lands, such as New Mexico.

Angered by the ban, oil-dependent states sued to have it revoked. In June, a Louisiana federal judge issued a preliminary injunction that effectively removed the ban. The lawsuit argued that the ban would result in GDP losses of $33.5 billion during President Biden’s first term and another $8.8 billion in conservation funding.

Soon after the injunction was granted, Republican Senators accused the Department of the Interior of dragging its feet on restarting the oil and gas leasing process. Interior Secretary Deb Haaland admitted that the ban—or “pause” as the administration called it—was still in place.

“Technically, I suppose, you could say the pause is still in place,” she said, adding that “We are evaluating our options,” and “There’s a lot of work that goes into moving that forward.”

By Charles Kennedy for Oilprice.com

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