Biden's New Energy Leases Less Than They Appear

Joan Sammon11 Jul, 2022 4 Min Read
Speaking with forked tongue.

Last week the Biden administration took steps to open public land to oil and gas development in a plan released by the Department of Interior (DOI).  The proposal offers additional offshore leases for oil and gas drilling rights that would open parts of the Gulf of Mexico and Alaska’s Cook Inlet to leasing through 2028. While already active areas of drilling with the requisite infrastructure are currently in place, any new Gulf or Cook Inlet leases merely represent potential future supply while doing nothing to change the  supply constraints that currently burden the market. The department included a range of options for consideration in the final plan, including not opening any areas to leasing at all. They additionally included an extensive comment period, an important opening for those who will inevitably weigh in.

Since this is the third time since November that the Biden administration has announced the sale of new oil and gas leases, the oil and gas industry has appropriately low expectations about the administration’s leadership in the face of genuine economic hardship being borne by the American people. The administration took the action not because of some ideological change of heart, but because the law, known as the Outer Continental Shelf Lands Act requires that a plan for new oil and gas leases in federal waters be updated every five years. The agency’s response to its own proposal is the dog whistle for the lawsuits that will inevitably ensue from the activist community. It assures the American people that this has nothing to do with improved oil and gas policy and everything to do with politics.

“From Day 1, President Biden and I have made clear our commitment to transition to a clean energy economy,” said Deb Haaland, the Interior secretary, in a statement. “Today, we put forward an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing. The time for the public to weigh in on our future is now.”

Would you buy a lease from her?

So while at first glance, last week’s proposal seemed to run afoul of President Biden’s own promise to, “…end oil and gas.” A closer look at the administration’s policy reveals that nothing has changed in either its stated intention or its ongoing efforts to destroy the domestic oil and gas industry. But under mounting pressure from high gas prices that the administration’s own policies have created, the president has to appear to be doing something.

With the release of this proposal, the administration believes it has found a clever path that President Biden can claim offers producers the ability to produce oil and gas if they want to, while ensuring years of legal challenges by the activists that will render the lease policy ineffective at increasing production. The effort is cynical, does nothing substantive to solve the problem of limited supply and is purely political. It's also emblematic of most Biden-era policies, giving an institutional middle finger to the American people, while genuflecting to the most radical, socialist green activists, many of whom are being funded by the internationally renowned, extreme left organization known as the World Economic Forum (WEF).

Still, some environmentalists don’t understand what’s happening. They quaintly still believe the efforts of this administration around environmental action has anything to do with the environment. They have somehow missed that climate is the new battlefield against government overreach, not the place where butterflies and bees are saved from unconcerned citizens. The climate activist group, Oil Change International, blasted the announcement as, “…a stark betrayal of President Biden’s climate promises and the communities who will suffer the brunt of this drilling. … Biden is choosing to stand with “big oil and gas” rather than the voters who elected him and who overwhelmingly want a swift transition to renewable energy.”

Biden’s real challenge it turns out, is to maintain order between the gaggle of conflicting environmentalist factions that exist within his own ranks. They include those old-school greenies who think the environment is at the root of environmentalism, those who favor the ESG agenda of Blackrock’s Brian Deese, seeking financial gain and influence, those who support the climate agenda of the old, white European elites at the G-7 and WEF, and finally, those who recognize that rising domestic gas prices and the malaise of the U.S. economy in the face of near double-digit inflation is a genuine threat to maintaining economic superiority or maintaining political power in the upcoming elections.

President Biden, it turns out, must devise policies that on one hand help a desperate lot of mediocre, European Socialist leaders contend with their embarrassing dependence on Russia for its oil and gas, instead of having already secured cleaner American supplies, while on the other hand not appear to be abandoning the ambitious, albeit destructive, climate agenda he and his international cohorts seek, while on still the other, other hand, contend with the more fractious members of his party, like Senator Joe Manchin (D-West Virginia), who genuinely seek environmental protection, but demand a robust energy sector. To be sure, that’s a lot for anyone, let alone a wobbly senescent with the president’s particular geriatric challenges.

Only days ago, President Biden’s national economic advisor, former BlackRock asset manager, Brian Deese explained high price of gas as being necessary because, "… it’s about the future of the Liberal World Order and we have to stand firm." While perhaps the most honest thing that has come out of the administration since taking office, it reveals that there is much more at stake than the climate, This is politics through and through. This is a fight for the very existence of liberal governments’ overreach that assumes citizens are too stupid, or too unimportant to permit self-determination.

Meanwhile, the sane wing of the Democrat party has thoughts of its own that are more aligned with the oil and gas industry and mainstream America. Manchin said he was disappointed that the Biden administration had included a no-lease option in the plan: 

Our leasing programs are a critical component of American energy security. I hope the administration will ultimately green-light a plan that will expand domestic energy production.

Left without a serious leader with serious solutions, Americans must instead patiently await the mid-term cycle. Perhaps once Biden understands how many people no longer like voting  blue, he will give up the objectives of the green.

Joan Sammon is the founder of a boutique oil and gas advisory firm that develops strategies for an array of business & market challenges. As an ESG expert she explains the threat of ESG to her corporate clients.

MORE ARTICLES

See All

One comment on “Biden's New Energy Leases Less Than They Appear”

  1. Decades ago, leases were awarded in the western edge of the Eastern 1/3 of the Gulf of Mexico and oil found but Florida has blocked leasing since 1980's. The Smackover Trend which has been prolific in Arkansas, NW Texas, and the gas fields of the Florida Panhandle does go out into the Gulf of Mexico on the continental shelf. It would not take billions of investment and a decade to drill, set up production and pipelines to the coast from there. Even a caisson production platform would work.
    What we are seeing coming online in the Gulf of Mexico is leases where oil was discovered a decade ago. Not all leases are producable. The block leased where the BP Macondo oil spill was had been leased to Texaco in the 90's and turned back in after finding it too difficult with a few exploratory wells. Then Dominion Resources had the lease block but turned it back in before BP obtained the lease and used a longstring casing design which the Feds approved and no other major company dares use due lack of a robust protection from blowouts

Leave a Reply

Your email address will not be published.

twitterfacebook-official