Biden official, Manchin suggest GOP alarm over oil & gas leasing pause is overblown

A Bureau of Land Management official conceded little ground to Senate Republicans on the U.S. Senate Energy & Natural Resources Committee who lashed out at the the Biden administration’s pause of new oil and gas leasing at a hearing Tuesday.

And Democratic committee chair Joe Manchin described speculative oil and gas leasing as senseless. The practice has been blasted by Sen. Catherine Cortez Masto as a waste of BLM resources that needlessly locks up land.

Under intense questioning from Republicans about the revenue impacts, legality and duration of the leasing pause, Nada Culver, the Bureau of Land Management’s deputy director for policy and programs, defended the policy point for point. 

Culver said the review was focusing on the royalty rates and climate impacts of oil and gas development on federal lands, but did not offer early hints at findings or an estimate of an end date.

Manchin opened the hearing by saying the moratorium was only a pause, and noted that the BLM, an Interior Department agency that oversees oil and gas leases, had approved 500 new permits to drill on already-leased land in February and March.

But that did little to comfort the committee’s Republicans, including ranking member John Barrasso of Wyoming, who repeatedly characterized it as a back-door prohibition.

“This is not a pause or a review, this is a ban, and currently there is no end in sight,” Barrasso said. “President Biden’s plan to end oil and gas leasing on public land will devastate the economies and communities of Wyoming and New Mexico and many other states.”

The pause affects only new leases and does nothing to change existing operations or even the issuance of drilling permits on land that has already been leased. Oil and gas companies hold leases for 13.9 million acres that are undeveloped, Culver said.

By some estimates a a pause of “several years” would have little fiscal impact, though the BLM has not made its own estimate, Culver said.

Interior Secretary Deb Haaland said at a White House briefing last week that the administration did not have an end date for the pause, and Culver did not specify one on Tuesday.

Asked directly by U.S. Sen. John Hoeven, (R-N.D.), when the pause might end, Culver said only that the review was ongoing.

Environmental groups have advocated for making the ban permanent. The U.S. Geological Survey found in 2018 that oil and gas extraction on federal lands contributes nearly one-quarter of the country’s greenhouse gas emissions.

Noncompetitive leases

In her opening statement, Culver listed a few specific policies on which the Interior Department’s review was focused. She included the royalty rates companies pay on the revenue they receive from extraction on public lands, which was set more than a century ago, and the bonding rates companies pay into a fund used to reclaim and cap wells in case a company goes bankrupt.

The department is also looking at the issue of noncompetitive leasing, a practice that allows federal parcels that failed to sell at auction to be purchased for $1.50 per acre.

U.S. Sen. Catherine Cortez Masto, (D-Nev.), raised the question of leasing lands that have low potential for oil and gas development, which she said wasted the BLM’s time and returned little to taxpayers. It also stops the land from being used for other purposes like conservation and recreation, she said.

Culver answered that most low-potential leases are sold through the non-competitive process.

Manchin said that system “makes no sense” to him.