U.S. oil and gas permitting has increased under Biden, data shows

Ever since Russia invaded Ukraine on Feb. 24, Republican politicians, conservative pundits and fossil fuel industry leaders have accused President Biden of weakening the U.S.’s economic power against Russia by reducing oil and gas production.

Last week, for example, Sen. Marsha Blackburn, R-Tenn., said, “Joe Biden has given up the best defense we had against [Russian President Vladimir] Putin’s evil vision for the world — energy independence.”

But a data dashboard unveiled Wednesday by the Center for Western Priorities shows that the opposite is true. The federal government has been issuing oil and gas drilling permits more willingly than it did during President Donald Trump’s first three years in office, and it could be issuing even more if the oil and gas industry weren’t leaving many current leases undeveloped.

Right now, the industry is sitting on 9,173 approved but unused drilling permits on federal and tribal lands. This is mystifying to some observers, who note that filing for those permits has already cost operators more than $10,000 each. The permits also expire after two years, with only one extension allowed. More than 26 million acres of federal land — an area comparable to the size of Kentucky — are currently under lease for oil and gas drilling. Of that, slightly more than half — 13.9 million acres, equivalent to the size of West Virginia — are not being used.

Despite Biden’s stated desire to combat climate change by reducing American dependence on fossil fuels that cause global warming, his administration has readily approved oil and gas drilling permit applications.

“The Interior Department, the Bureau of Land Management, under both Biden and Trump, essentially operates as a rubber stamp,” said Jesse Prentice-Dunn, policy director for the Center for Western Priorities at a data presentation on Wednesday afternoon.

In fiscal year 2021, 98 percent of drilling permit applications were approved. So far this year, 96 percent of permit applications have been approved. During fiscal year 2020, the last year of the Trump administration, the approval rate was 94 percent. In terms of raw numbers, more drilling permits were approved during Biden’s first year in office than in any of Trump’s first three years.

“This is not some situation where the Biden administration and the Trump administration were treating permits all that differently,” Prentice-Dunn said. “Obviously, [it’s] to the dismay of environmentalists, but they’re still approving permits.”

This would seem to contradict claims made by people such as American Petroleum Institute (API) president Mike Sommers, who wrote on the day Russia launched its invasion of Ukraine that “the administration continues to block U.S. energy production.”

“Over the last two weeks, the oil and gas industry has mounted a PR campaign in an attempt to loosen regulations and open more public lands for drilling, while sitting on a massive stockpile of approved but unused drilling permits that are ready to go right now, as well as thousands of idle leases for future drilling,” said Jennifer Rokala, executive director of the Center for Western Priorities, during Wednesday’s presentation.

The oil industry hasn’t ramped up production enough to keep pace with surging demand and higher prices as the economy has rebounded from the pandemic-induced recession. Historically, the number of U.S. oil rigs has tracked closely behind oil prices, as producers respond to market signals. Since the summer of 2020, however, crude oil prices have shot up to well above pre-pandemic levels, but the number of oil rigs remains below their 2019 level. Industry observers say oil companies are protecting profits for investors — which surge when prices rise — rather than expanding supply.

“Oil companies have pulled back pretty hard in the last year and a half, even as they’ve climbed out of the pandemic drop in activity,” Brad Handler, a researcher at the Colorado School of Mines and a former Wall Street research analyst covering oil drilling, said during Wednesday’s presentation. “So, as we look at 2022, what the companies have announced to their investors is that that capital discipline will continue, even though it’s becoming more and more obvious to them that oil prices have some substance underneath them and oil and gas prices are not going to simply fall very quickly.”

Biden seemingly referred to this phenomenon on Tuesday when he said, during an announcement of a ban on importation of Russian oil, “Russia’s aggression is costing us all, and it’s no time for profiteering or price gouging.”

The oil industry contends that it is maximizing current potential output and that it is common to buy leases and file permit applications for areas where it is not yet ready to drill.

“We are at a two-decade high for the percentage of leases in production, with nearly two out of three leases producing natural gas and oil,” API senior vice president Frank Macchiarola said in a statement sent to Yahoo News via a spokesperson. “Leases are issued prior to exploration, and not every acreage of leased land has resources to tap into, despite substantial investments by developers.”

API argues that Biden’s ongoing attempt to end the sale of new oil and gas drilling leases on federal land and waters is hindering its productive capacity, even though it would take several years for a newly leased area to start production. “With production still below pre-pandemic levels and an imbalance between supply and demand that is being exacerbated by the Russian invasion into Ukraine, it’s time for the administration to support domestic production and send a message that America is open for energy investment.”

Environmental organizations counter that assertion by noting that since the U.S. is actually a net exporter of oil and gas — though one that is vulnerable to price shocks — the only effective long-term strategy for energy security is to reduce dependence on fossil fuels. Biden has a proposal, passed by the House of Representatives but sitting in the Senate, where it faces unified opposition from Republicans, that within five years would reduce U.S. oil consumption by more than the amount it has been importing from Russia.

On a press call Tuesday, a senior Biden administration official gave no indication that the White House is rethinking its long-term commitment to transitioning to renewable energy, but they did call for oil companies to alleviate short-term pain at the pump by increasing output.

“It's a time for oil and gas companies to work with Wall Street to unleash our productive capacity,” said the official, who spoke on the condition of anonymity. “We need our domestic oil and gas industry to use their leases, use their permits, use financing from Wall Street to respond to price signals and continue increasing their production.”