As Joe Biden continues to see energy cost inflation hammer Americans and cripple the economy, he allowed the resumption of oil and gas leasing on federal land earlier this month after shutting down new exploration on his first day in office. Unfortunately for the country, it will not likely bring down prices.
The Biden suspension of federal leasing had an immediate adverse impact on investment in domestic energy production, an industry that is highly dependent on available capital and labor in order to be successful.
Energy companies must have prospective drilling locations secured long before they are able to secure billions in capital needed to explore without fear of regulatory interruption.
Even though a federal court ordered Biden to reinstate leasing, the announcement of resuming leasing is limited. The federal government only plans to open up 144,000 acres to exploration, a full 80 percent less than what was being evaluated. Royalties due to the government are also skyrocketing by 50 percent up to 18.75 of the value of extracted resources.
White House Press Secretary Jen Psaki made it clear this week that the administration was only reluctantly complying with the federal court order. She said the move is not in line with the Biden policy, which is “to ban federal leasing.” She added that the administration intended to appeal the court order.
Psaki also reiterated the talking point that the White House doesn’t feel that additional leasing is needed. Contrary to the claim that there are thousands of permits not being used that should be exploited first, the uncertainty surrounding the viability of those permits intimidates potential investors wary of the possibility of new restrictions.
Federal lands now available for leasing are not likely to actually produce any oil or gas at any time in 2022. The newly available land is not likely to generate much interest given the adverse position taken by the administration.
Nothing has changed about the Biden administration’s compliance with the directions given by progressive environmental activists. The only “solution” we can expect to hear from Biden is almost certain to be electric vehicles and some unexplained mission to completely end civilization’s reliance on fossil fuel energy.