US freezes new federal drilling permits, leases

President Joe Biden's administration has temporarily halted the approval of new drilling permits and leases across US federal lands, drawing complaints from industry groups.

The 60-day suspension on approvals is necessary for a "targeted and time-limited" review of recent decisions, the US Interior Department's acting secretary Scott de la Vega said in an order signed yesterday. The freeze will apply to permits, leases, easements and federal land management plans.

But producers holding federal leases will still be allowed to continue drilling wells using the more than 5,600 unused drilling permits they amassed over the past two years. That will likely avoid most near-term disruptions to operations. Oil and gas producers typically acquire permits months before drilling crews begin operations, to avoid the risk of disruptions and to aid in planning.

Biden during his presidential campaign promised to "ban" new oil and gas drilling permits and halt new federal fossil fuel leasing. But the administration will need to figure out a way to achieve that goal, while still complying with laws that generally support production. Oil output on federal lands and waters averaged 2.7mn b/d in 2019, representing 22pc of domestic production.

Oil and gas groups have strongly opposed Biden's plans to constrain the industry's access to federal lands, which cover nearly all offshore acreage and a fifth of the US landmass. Halting federal development will hurt the economy and increase reliance on energy imports, they say.

"Blocking American companies from accessing our country's natural resources is bad for American jobs, bad for state budgets and bad for national security," American Exploration and Production Council chief executive Anne Bradbury said. "It also raises serious legal concerns."

The Interior Department has the option to extend or modify the suspension order. Former president Barack Obama's administration in 2016 placed a moratorium on new federal coal leasing, combined with an environmental review, that lasted until it was repealed by Trump more than a year later.

By Chris Knight