June 16 (Reuters) - U.S. President Joe Biden's
administration has the power to stymie oil and gas development
on government-controlled lands and waters, industry and
environmental experts said, even though a court decision ended
his freeze on federal drilling auctions.
Some options, they said, include offering sparse acreage or
imposing more time-consuming permitting requirements.
"We lived through the Obama administration, and they did a
lot of things to constrain leasing and other activity on federal
lands," Kathleen Sgamma, president of industry trade group
Western Energy Alliance, said in an interview.
"And frankly they have the power to do so."
In January, Biden temporarily suspended drilling lease sales
on federal lands and waters to weigh the program's environmental
costs. The move was widely seen as a first step to delivering on
his campaign promise to permanently ban new federal leasing to
fight climate change.
Several oil-drilling states sued, arguing the pause was
illegal and would hurt their economies. On Tuesday, Louisiana
federal court Judge Terry Doughty, who was appointed by former
President Donald Trump, ordered the government to lift the
The U.S. Mineral Leasing Act of 1920 says the government
must schedule lease sales at least quarterly in "each state
where eligible lands are available."
Changing that law is unlikely in a politically divided
Congress. Yet industry and green groups agree that Biden's
Interior Department, which oversees oil and gas development on
federal acreage, has plenty of other ways to avoid or at least
slow new leasing.
The administration, for example, has the power to decide
what "eligible lands" are.
Previous administrations have removed areas from
consideration for leasing. Trump's Republican administration,
for example, deferred leases within 10 miles of New Mexico's
Chaco Culture National Historical Park. President Barack Obama,
a Democrat who had Biden as his vice president, withdrew parts
of the Atlantic and Arctic oceans from offshore drilling
When you think about it, the system cant operate unless
theres a fair amount of discretion built in," said Drew Caputo,
vice president of litigation for lands, wildlife and oceans at
environmental group Earthjustice. "Otherwise, any oil company
could come in at any time and demand a lease in location X."
In the coming weeks, Biden's Interior Department is expected
to release a report with recommendations on how to reform the
century-old oil and gas leasing program, Interior Secretary Deb
Haaland said on Wednesday.
The Department declined to comment on whether it will hold
new lease sales, but said it will honor the court ruling.
If Interior resumes leasing, it has the authority to do so
with strict stipulations and prolonged permitting timelines,
experts said. It can also put up a limited number of acres up
for auction, frustrating bidders.
The industry is anticipating that Interior will prolong the
review of potential lease areas using the National Environmental
Policy Act (NEPA), which requires that federal agencies assess
the environmental impacts of projects.
"NEPA is a great tool for paralysis by analysis... we will
see NEPA take longer," Sgamma said.
The Biden administration has argued that reforms to the
programs are needed in part because the Trump administration
failed to conduct thorough reviews of lease areas. That resulted
in many canceled leases and set back Trump's efforts to maximize
fossil fuel production.
Every time we challenged lease sales in the courts, we were
able to demonstrate there was a failure to account for the
climate crisis and we prevailed in every one of those lawsuits,
said Erik Schlenker-Goodrich, director of the Western
Environmental Law Center (WELC).
Environmental groups like WELC and WildEarth Guardians are
ready to sue again if drilling lease sales resume, according
WELC's Schlenker-Goodrich and WildEarths climate and energy
program director, Jeremy Nichols.
We hope we dont have to name Deb Haaland as a defendant in
a case. That would really be sad, Nichols said. But we have to
do what we have to do, and this program is off the rails."
(Reporting by Nichola Groom and Valerie Volcovici; Editing by