Biden suspends new oil, gas drilling permits on federal land, signaling beginning of energy price hikes
01/26/2021 // Divina Ramirez // Views

President Joe Biden's administration announced on Thursday, Jan. 21, a 60-day suspension of new oil and gas leasing and drilling permits for U.S. lands and waters.

The suspension, part of a review of President Donald Trump's environmental policies, went into effect after Acting Interior Secretary Scott de la Vega signed the order on Wednesday, Jan. 20.

The move is in line with Biden's campaign pledge to stop new drilling on federal lands. Biden also said he'd end the leasing of publicly owned energy reserves as part of his plan to address so-called climate change.

The suspension also applies to new coal leases and permits and blocks the approval of mining plans.

But the order did not ban new drilling outright. It included an exception giving a handful of senior officials at the Department of the Interior (DOI) the authority to approve actions that would otherwise be suspended.

The Biden administration has also yanked the federal permit for the Keystone XL oil pipeline that would have carried roughly 800,000 barrels of crude oil each day from Alberta to the Texas Gulf Coast. Biden's executive order said that leaving the permit in place is not consistent with his climate plans.

Keystone XL President Richard Prior said the withdrawal of the permit will see some 11,000 jobs gone over the next few weeks.

Fewer jobs, more economic troubles

Environmental activists and oil trade industry groups have been fighting over the proposed 1,100-mile pipeline for years. The former has cited the possible impact of the pipeline's construction on wildlife and drinking water supplies while the latter argues that the pipeline would allow the U.S. to be less dependent on unstable regions around the world for oil imports.


The Biden administration's move to suspend oil and gas permits drew backlash from legislators in states whose economies benefit from the oil industry, as well as oil companies in favor of the pipeline project and similar proposals.

Wyoming's political and industry leaders were quick to blast the move, stating that it would mean "fewer jobs and further economic troubles" for a state that was already struggling economically.

In a statement, Ryan McConnaughey of the Petroleum Association of Wyoming said they have known since last year that Biden would waste no time signing orders to hamper oil and gas production. (Related: Biden’s flurry of executive actions is mostly meant as backhand to Trump’s legions of supporters.)

Meanwhile, Sen. John Barrasso said that halting oil and gas projects in Wyoming will kill jobs and reduce a critical source of revenue. Wyoming could lose some 18,000 jobs and $2.74 billion in investment each year from 2021–2025 if drilling on federal land is banned.

On the other hand, conservation advocate John Rader of the Wyoming Outdoor Council said that Thursday's suspension was only typical for a new administration. Rader said the order only suspends new leases but not existing ones so it will not bring oil and gas on public land to a halt.

Alan Olson, executive director of the Montana Petroleum Association, said that some of the objections to the construction of the Keystone XL pipeline were "all hype." Olson said that whether or not that particular pipeline exists, Canada's crude oil will be transported, refined and used.

Following Thursday's announcement, energy companies saw their stocks fall. Those of EOG Resources Inc. and Cimarex Energy Co. fell by 8.6 percent on the New York Stock Exchange while those of Devon Energy Corporation fell by 7.9 percent. Occidental Petroleum Corporation's stocks fell by 6.4 percent.

Follow to learn more about Biden's recent executive orders.

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