Biden to pause oil and gas leases, cut subsidies in climate action (updated)

Abraxas Petroleum

27/01/2021 14:00

(Adds comments by climate envoy Kerry, Senator Schumer, energy
executives)
    By Valerie Volcovici and Jeff Mason
    WASHINGTON, Jan 27 (Reuters) - President Joe Biden was set
on Wednesday to sign executive actions to combat climate change,
including pausing new oil and gas leases on federal land and
cutting fossil fuel subsidies as he pursues green policies in
stark contrast to those of his predecessor Donald Trump.
    The orders map out the direction for the Democratic
president's climate change and environmental agenda and mark a
reversal from Trump, a Republican businessman-turned-politician
who sought to maximize U.S. oil, gas and coal output by removing
regulations and easing environmental reviews.
    Biden's focus on climate change has cheered international
partners and environmental advocates, but upset Big Oil, which
argues that the moves will cost the United States millions of
jobs and billions of dollars in revenue at a time when the U.S.
economy has been battered by the COVID-19 pandemic.
    The White House said Biden will direct the Interior
Department to pause new federal oil and gas leases on public
lands or offshore waters "to the extent possible" and review the
program's climate impacts and taxpayer benefits. The pause will
not restrict energy activities on lands that the government
holds in trust for Native American tribes, it added.
    Biden will call for a "rigorous review" during the pause of
all existing leasing and permitting practices related to fossil
fuel development on public lands and waters, the White House
said. Biden also will seek to double renewable energy production
from offshore wind and by 2030 and set a goal to conserve 30% of
federal land and waters to protect wildlife, also by 2030.
    The orders will impact large swathes of land onshore in
mostly Western states, as well as offshore drilling acreage
located mainly in the U.S. Gulf of Mexico, which combined make
up about a quarter of the nation's oil and gas supply. Word of
the measure has drawn criticism from some states that depend on
drilling revenue.
    Biden will also direct federal agencies to "eliminate fossil
fuel subsidies as consistent with applicable law," according to
a White House fact sheet. It was not clear which subsidies could
be stripped away under this order, given many of the industry's
tax breaks are congressionally approved.
    U.S. special climate envoy John Kerry touted the executive
orders during the virtual summit of the Davos-based World
Economic Forum on Wednesday, saying they show that Biden has
made climate change the "centerpiece of his presidency."
    
    'A STRATEGIC ENGINE'
    John Hess, CEO of energy company Hess Corp  HES.N , said the
Biden administration must keep in mind the impacts of its
climate change agenda on jobs and energy security. 
    "They have to realize that oil and gas are a strategic
engine for the U.S. economy. ... oil and gas play a key role in
the economy's recovery," Hess told Wall Street analysts.
    Abraxas Petroleum  AXAS.O  CEO Bob Watson separately told
Reuters, "In my many years in this business, this is the worst
downturn I have lived through, and this is not going to help a
recovery. There's still going to be demand for oil and gas for
my lifetime, anyway, and I'm just worried about the impact it
will have on the broader economy."
    Biden also faces pressure from liberals in his own party for
aggressive action to address climate change. Senate Majority
Leader Chuck Schumer on Wednesday called on Biden to declare a
national emergency on climate change, calling such a move "a
giant step in the right direction" that would let the president
tap additional resources to achieve his goals.
    The new orders include an announcement that Biden will host
an international climate summit on Earth Day April 22, the
creation of new climate change positions and an inter-agency
task force within his government, and measures to boost
government procurement of U.S.-sourced clean energy and
vehicles, boost science, and assist communities most affected by
industrial pollution.
    Biden also will instruct agencies to develop policies to
address the disproportionate health, environmental, economic and
climate impacts on poor and minority neighborhoods. 

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
In early action, Biden tries to make good on pledge to heal
America's racial divide     urn:newsml:reuters.com:*:nL1N2K11KQ
U.S. Senate confirms Biden nominee Blinken as secretary of state
    urn:newsml:reuters.com:*:nL1N2K1258
U.S. to 'make good' on climate finance pledges, Kerry tells
leaders     urn:newsml:reuters.com:*:nL1N2K00Z8
U.S. envoy Kerry says climate change measures must be stepped up
    urn:newsml:reuters.com:*:nL8N2JW5PK
Biden announces return to global climate accord, new curbs on
U.S. oil industry     urn:newsml:reuters.com:*:nL1N2JV19J
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Valerie Volcovici and Jeff Mason in Washington;
Additional reporting by Timothy Gardner, Makini Brice and Lisa
Lambert in Washington, Gary McWilliams in Houston and Jessica
Resnick-Ault in New York; Writing by Will Dunham; Editing by
Richard Valdmanis, Chizu Nomiyama and Lisa Shumaker)
 ((valerie.volcovici@thomsonreuters.com;
jeff.mason@thomsonreuters.com))