The Biden administration is known for its infamy regarding domestic oil and gas production. Biden stated in his State of the Union Address that “we’re still going to require oil and gas for awhile.” Responding to the laughter of the Republicans, he repeated the quiet part loudly again: “We’re going need domestic oil for at minimum another decade.”
Is this crazy? Yes. They mean it, and their actions speak louder that their misguided words. The administration’s strategy to stop domestic energy production includes executive order, administrative rule-making and public-private partnerships. It also has a complicit Congress. This is a formidable opposition to an industry that provides the vast majority of our domestic electricity.
Many of these issues will be brought into sharp focus this year. On January 30, the public comment period for Bureau of Land Management (BLM), a proposed rule to increase methane and flaring rules in oil and gas operations on federal lands, closed.
The Environmental Protection Agency’s (EPA), proposed methane rule will significantly increase regulations and cost of operation. Comments are due February 13. The comment period for the Treasury Department on climate risk assessment by large banks ended on February 6.
The draft Environmental Impact Statement (EIS), prepared by the U.S. Army Corps of Engineers, on the Dakota Access Pipeline (DAPL), is due to be made public in March. DAPL was permitted to continue to transport North Dakota oil to market during the EIS process. However, any future negative impacts on the pipeline could cause Bakken oil production to be stopped for a considerable time.
At the United Nations Climate Change Conference (COP27), the United Nations introduced initiatives to shackle oil and gas industries and target methane. The Inflation Reduction Act 2022, which was signed into law in August last year, provides funding for these and other green energy boondoggles.
Two severe blizzards in late 2013 caused havoc for oil and gas producers in North Dakota’s Bakken region. Now, they are facing the full force and ambitions of the Biden administration to decarbonize the economy. We are facing a perfect storm.
Some want Congress to control the runaway federal agencies in Washington DC and they point to the Congressional Review Act as a solution. The industry is wise to not place too much faith in the nation’s elected officials, as Congress has long since handed its constitutional authority over to the DC bureaucracy. Even when Republicans controlled both houses of Congress, the CRA was a toothless tiger during President Trump’s first two years in office.
2017: The House adopted a resolution (S.J. Res 11 was passed to repeal the earlier BLM methane rules. The resolution was rejected by the Senate 49 to 51 in May 2017, after three GOP senators voted in support of the Democrats to maintain the BLM rule.
This is yet another example of “permanent Washington”, which ignores the needs of every American. Washington will not provide any assistance to the oil and gas industries.
Other weapons used to stop oil and gas operations include administrative rules that regulate methane and banking. Under the direction of E.O., the BLM has failed to conduct quarterly federal lease sales. 13990 was issued in January 2021. The BLM, acting under the direction of E.O. BLM actually had a scaled-back quarterly leasing sale in 2022, but has since canceled the sale for its first quarter of 2023.
Oil drilling in North Dakota has been severely affected by the slow implementation of federal leases. Although 85 percent of North Dakota’s minerals are owned by the private sector, 6,345 potential wells remain in regulatory limbo. To put this in perspective, at least 24,000 more wells are required to develop the Bakken oilfield. Therefore, the federal lease issue will affect 25 percent of future wells. A University of Wyoming study found that North Dakota will suffer a loss of $570 million in dollars over the next 15-years from the ban on drilling.
This issue is currently being litigated by North Dakota and other oil-producing countries who are trying to enforce the requirement of quarterly lease sales. North Dakota filed a Motion for Summary Judgment at a federal court in January.
The Obama administration’s sue and settle policy, which was so effective in pushing the climate agenda, is back. This is another tool that the Biden administration uses to punish the oil-and gas sector. Washington and environmental groups have a cozy relationship that is a perfect example of corrupt public-private partnerships.
The BLM and a number of environmental groups filed a proposal “settlement” on September 6, 2022. This settlement stipulated that the BLM would not issue drilling permits for leases in North Dakota, South Dakota and Montana auctioned between 2019 and 2020. The BLM completed a revised National Environmental Policy Act analysis (NEPA), which required analysis of certain factors, such as the social costs of carbon. This settlement was reached. Trump’s significant NEPA reforms are long gone. The settlement is a win for the Biden administration, environmental groups, and oil and gas operators. However, it is a significant loss to our economy, oil and natural gas operators, and mineral owners, who are being deprived of their property, royalties income, and significant loss.
Fluctuating oil prices, transportation problems, severe shortages of skilled workers and other challenges are all affecting the domestic oil and natural gas industry.
Anyone who is able to understand the economic and safety implications of this rush to decarbonize the economy and the human flourishing we have enjoyed in the last 150 years based on cheap, reliable energy should speak out to state legislators. They are your representatives.
These issues are present because too many people believe that man-made CO2 emissions are causing the destruction of the planet. Today’s businesses are being distracted from their core competencies, which is what they do best, in order to pursue the green agenda rabbit. It’s a waste and a zero-sum game. We all pay the price.
We can’t appease those who want fundamentally to change our economy or our country. It is not a good idea to play by their rules when the deck is against you. This losing game must stop at the state level. It’s time to face the facts and create new rules that protect small businesses and individuals. Today, America needs to return to its strong federalism, or “the laboratories of democracy”, which was what made it great.
