Page 19 - NorthAmOil Annual Review 2021

NorthAmOil AUGUST NorthAmOil

statement. “Together, federal onshore and off- 2015, illustrating the decline of coal use as it has
shore oil and gas leasing programs are respon- increasingly been edged out by natural gas in
sible for significant greenhouse gas [GHG] power generation. Total revenue from energy
emissions and growing climate and community and minerals on federal land came in at about
impacts.” $7.6bn in 2020.
However, the DoI continued, the current The pace of the Biden administration’s
programmes “fail to adequately incorporate response seems to suggest that it is unwilling to
consideration of climate impacts into leasing resume oil and gas leasing currently – though it
decisions or reflect the social costs” of GHG has no choice in the matter. It looks as though
emissions. “Furthermore, past operation of states and industry groups will keep the pres-
the programmes did not adequately reflect the sure on, however, while the litigation continues,
breadth of the Interior Secretary’s stewardship resulting in a lease sale taking place eventually.
responsibilities,” it said. This does not guarantee that there will be It was evident
significant interest in the lease sale, however,
What next? as producers may be wary of investing in a pro- under the Trump
The details of the DoI’s next lease sale are now gramme that could later be scrapped or over- administration
being awaited, while the department contin- turned if the Biden administration gets its way
ues its review of the programmes and what it in court. that producers
describes as their shortcomings. The DoI also There are other reasons to hold back too, as
said that it would “undertake a programmatic more and more producers adopt decarbonisa- were more
analysis to address what changes in the depart- tion goals, which in some cases involve a pivot
ment’s programmes may be necessary to meet away from oil and gas over the longer term. And hesitant to
the President’s targets of cutting greenhouse gas while market conditions have improved consid- take up new
emissions in half by 2030 and achieving net zero erably since last year, it was evident under the
greenhouse gas emissions by 2050”. Trump administration that producers were federal leases
Separately, the DoI issued a notice on August more hesitant to take up new federal leases –
19 saying it would conduct a review of coal sales especially offshore – following a series of indus- – especially
on federal land to assess their impact on climate try downturns. Trump administration attempts
change, as well as their value to taxpayers. to open up new federal acreage to drilling drew offshore.
Federal land accounts for around 42% of US comparatively little interest among oil and gas
coal production, according to the DoI, primar- producers.
ily in Montana and Wyoming. The federal coal It is therefore possible that even if a federal
programme generated revenue of $377.7mn lease sale is held soon, participation may end up
last year, compared with more than $1bn in being limited.™

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