Energy industry terms Biden lease moratorium a blow to Pennsylvania

President Joe Biden’s moratorium on oil and gas leasing on federal lands and his order canceling the Keystone XL pipeline project were a shot across the bow of Pennsylvania’s economy, the energy industry said this week.

The moratorium announced Jan. 27 will hamstring the development of the state’s ample natural gas supplies while the Keystone cancelation should be considered an ominous prelude to the possible torpedoing of the proposed PennEast Pipeline, industry leaders warned. “Pennsylvania’s best chance for broad-based, sustained economic growth will come from maximizing the shale gas revolution, which President Biden now seeks to snuff out,” David Taylor, president & CEO of the Pennsylvania Manufacturers’ Association, said in a written statement.

PennEast is designed to run from Luzerne County to New Jersey and carry a projected 1.1 billion cubic feet of Pennsylvania gas per day to the East Coast. The project has been painstakingly making its way through the regulatory process, but a crucial vote by the Federal Energy Regulatory Commission (FERC) on a request to begin construction was postponed last week with no reason given by the agency.

While the delay by FERC is presumed to be temporary, the industry warned that the writing was on the wall that the oil and gas industry no longer had a friend’s ear in the White House. Taylor said Pennsylvania had played a lead role in a hard-fought campaign to bring the United States to a position of energy independence, and the new administration “wants to throw it all away.”

The success in energy development in recent years depended in large part on giving the energy industry access to leases on federal lands and offshore parcels, which in 2019 accounted for 22 percent of total U.S. oil production and 12 percent of gas production, according to the U.S. Energy Information Administration. The Interior Department last week announced its own 60-day moratorium on new lease approvals.

Biden’s indefinite moratorium is to “rigorously review leasing and permitting practices related to fossil fuel development on public lands and waters,” and does not affect current leases or operations in tribal lands, but critics perceived it as a set-up for an eventual permanent ban.

“Do not be fooled; this is a ban,” said Dan Naatz, senior vice president of government relations and political affairs for the Independent Petroleum Association of America (IPAA). “The Biden administration’s plan to obliterate the jobs of American oil and gas explorers and producers has been on clear display with cancelation of Keystone XL, the initial announcement of a 60-day freeze on federal leasing and permitting, and now this.”

The industry stuck to its assertion that while it had no quarrel with the development of wind or solar power, conventional energy was still vital to powering the nation efficiently and economically right now, and that a premature total transition to renewables would lead to increased reliance on foreign oil producers as well as a crippling loss of U.S. jobs, local tax revenues and government royalties. “Traditional energy from federal lands remains critical to America’s ability to serve the growing energy needs of its families and small businesses,” said Consumer Energy Alliance President David Holt.

Mike Sommers, president and CEO of the American Petroleum Institute (API), said the United States would have to increase its coal consumption by 15 percent to cover the loss of gas produced on federal land, which would lead to a 5.5 percent increase in carbon dioxide emissions from the power sector by 2035. “The administration is shifting America’s bright energy future into reverse and setting us on a path toward greater reliance on foreign energy produced with lower environmental standards,” Sommers said. “Limiting domestic energy production is nothing more than an ‘import-more-oil’ policy that runs counter to our shared goal of emissions reductions and will make it harder for local communities to recover from the pandemic.”