President Biden Announces a Moratorium on Federal Oil and Gas Leasing

Today, President Biden issued an executive order directing the Department of the Interior to “pause new oil and natural gas leases on public lands or in offshore waters” while the Department completes “a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices.”

The directed review of federal oil and gas leasing and permitting is broad in scope. The executive order instructs that the review should consider “the Secretary of the Interior’s broad stewardship responsibilities over the public lands and in offshore waters, including potential climate and other impacts associated with oil and gas activities on public lands or in offshore waters.” Furthermore, the executive order directs the Secretary to consider whether to adjust royalties on federal oil and natural gas “to account for corresponding climate costs.”

The executive order does not direct the Department to complete this review within a specified timeframe. Therefore, the “pause” on new oil and natural gas leases is indefinite.

The leasing moratorium is limited to federal public lands and offshore waters only. The moratorium does not apply to Indian leases. It also does not suspend permitting of new oil and natural gas wells on existing federal leases. Separately, however, the Acting Secretary of the Interior has effectively suspended all permitting for 60 days via a Secretarial Order.

Immediately after the President signed the executive order, Western Energy Alliance filed a lawsuit in the United States District Court for the District of Wyoming challenging the leasing moratorium. At the time of this alert, Western Energy Alliance had not sought preliminary or temporary relief.

The “pause” on federal oil and gas leasing is only one component of this sweeping executive order. The executive order establishes a national policy that “climate considerations shall be an essential element of United States foreign policy and national security" and sets a national goal of net-zero emissions by 2050. It directs federal agencies throughout the United States government to undertake studies and reviews, establish councils and working groups, and promote initiatives. For energy developers on public lands, the executive order most notably:

• Establishes a White House Office of Domestic Climate Policy;
• Establishes a National Climate Task Force comprised of the heads of multiple federal agencies, including the Secretaries of Interior and Agriculture and the Chair of the Council on Environmental Quality;
• Establishes a goal of “conserving at least 30 percent of our lands and waters by 2030” and directs the Secretary of the Interior to submit a report to the National Climate Task Force by April 26, 2021 with recommended steps to achieve this goal;
• Directs the Secretary of the Interior to review siting and permitting processes on public lands and in offshore waters to identify steps to increase renewable energy production on these lands and waters;
• Sets a goal of doubling the amount of offshore wind by 2030;
• Directs the heads of federal agencies to take steps to ensure that federal funding is not directly subsidizing fossil fuels to the extent consistent with law;
• Establishes a goal of achieving a carbon pollution-free electricity sector by 2035; and
• Establishes a working group to provide support for coal and power plant communities.

Given the breadth of the executive order, and the number of actions it directs, we expect to see guidance and reports from federal agencies in the coming months regarding its implementation. Please contact Katie Schroder or Courtney Shephard with questions about the executive order.