Biden administration likely to restart oil and gas leases after federal court ruling

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The Biden administration is likely to restart oil and gas leases on federal lands after a federal court ruling.

According to Bloomberg on Friday, the Department of the Interior will resume its plans for new oil and gas drilling after a three-judge panel on the Fifth Circuit Court of Appeals issued a stay on a lower court ruling that blocked the administration from using a higher “social cost of carbon” in its environmental analyses.

“With this ruling, the Department continues its planning for responsible oil and gas development on America’s public lands and waters,” Interior Department spokeswoman Melissa Schwartz said in a statement. “Calculating the social cost of greenhouse gas emissions provides important information that has been part of the foundation of the work the Interior Department has undertaken over the past year.”

The Washington Post reported:

The ruling by the U.S. Court of Appeals for the 5th Circuit stayed an order issued last month by a U.S. District Court judge in Louisiana that prevented agencies from considering the harm climate change causes, known as the “social cost of carbon.” This figure is used across the federal government in rulemaking, from issuing new drilling permits to assessing the growing potential for damage such as crop losses and flood risks.

The decision means that, at least until there’s a ruling on the case’s merits, the Biden administration can continue to consider the economic cost of climate change as it writes new rules, and strengthen existing ones, that could inch the country closer to Biden’s goal of cutting emissions in half by the end of the decade compared with 2005 levels.

In February, 10 energy-producing states, alongside a host of industry trade groups sued the Biden administration over its adjustments to the “social cost of carbon” in environmental analyses, particularly those relating to oil production.

The Biden administration dramatically increased the estimated “social cost of carbon” to $51 per ton of carbon dioxide released into the air from between $1 and $7 estimated by the previous Trump administration.

The new estimates, if factored into the cost, would have forced companies and states to pay “hundreds of billions or trillions of dollars,” per Bloomberg. The groups suggested that it “may be the most significant regulatory encroachment upon individual liberty and state sovereignty in American history.”

The Interior Department told the publication it continues to move forward with reforms to address “the significant shortcomings” in the country’s onshore and offshore oil and gas programs.

“Specifically, the Department is committed to ensuring its programs account for climate impacts, provide a fair return to taxpayers, discourage speculation, hold operators responsible for remediation, and more fully include communities, Tribal, state and local governments in decision-making,” the agency stated.