News feed
Invite
Images
Members
Forums
My Ads
Audios
Blogs
Videos
Events
Questions
Classifieds
Classifieds
Biden halts oil and gas leases, permits on US land and water
BILLINGS, Mont. (AP) — The Biden administration announced Thursday a 60-day suspension of new oil and gas leasing and drilling permits for U.S. lands and waters, as officials moved quickly to reverse Trump administration policies on energy and the environment.
The suspension, part of a broad review of programs at the Department of Interior, went into effect immediately under an order signed Wednesday by Acting Interior Secretary Scott de la Vega. It follows Democratic President Joe Biden’s campaign pledge to halt new drilling on federal lands and end the leasing of publicly owned energy reserves as part of his plan to address climate change.
The order did not ban new drilling outright. It includes an exception giving a small number of senior Interior officials — the secretary, deputy secretary, solicitor and several assistant secretaries — authority to approve actions that otherwise would be suspended.
The order also applies to coal leases and permits, and blocks the approval of new mining plans. Land sales and exchanges and the hiring of senior-level staff at the agency also were suspended.
Under former President Donald Trump, federal agencies prioritized energy development and eased environmental rules to speed up drilling permits as part of the Republican's goal to boost fossil fuel production. Trump consistently downplayed the dangers of climate change, which Biden has made a top priority.
On his first day in office Wednesday, Biden signed a series of executive orders that underscored his different approach — rejoining the Paris Climate Accord, revoking approval of the Keystone XL oil pipeline from Canada and telling agencies to immediately review dozens of Trump-era rules on science, the environment and public health.
The Interior Department order did not limit existing oil and gas operations under valid leases, meaning activity won't come to a sudden halt on the millions of acres of lands in the West and offshore in the Gulf of Mexico where much drilling is concentrated. Its effect could be further blunted by companies that stockpiled enough drilling permits in Trump's final months to allow them to keep pumping oil and gas for years.
Erik Milito with the National Ocean Industries Association, which represents offshore energy firms, said he was optimistic companies still will be able to get new permits approved through the senior-level officials specified in the order.
But Biden’s move could be the first step in an eventual goal to ban all leases and permits to drill on federal land. Mineral leasing laws state that federal lands are for many uses, including extracting oil and gas, but the Democrat could set out to rewrite those laws, said Kevin Book, managing director at Clearview Energy Partners.
The administration's announcement drew outrage from Republicans and some industry trade groups. They said limiting access to publicly owned energy resources would mean more foreign oil imports, lost jobs and fewer tax revenues.
Republican Sen. John Barrasso of Wyoming said the administration was “off to a divisive and disastrous start." He added that the government is legally obliged to act on all drilling permit applications it receives and that “staff memos” can't override the law.
“Impeding American energy will only serve to hurt local communities and hamper America’s economic recovery,” American Petroleum Institute President Mike Sommers said in a statement.
National Wildlife Federation Vice President Tracy Stone-Manning said she expected Biden to make good on his campaign promise to end leasing altogether, or at least impose a long-term moratorium on any new issuances.
“The Biden administration has made a commitment to driving down carbon emissions. It makes sense starting with the land that we all own,” she said. “We have 24 million acres already under lease. That should get us through."
Oil and gas extracted from public lands and waters account for about a quarter of annual U.S. production. Extracting and burning those fuels generates the equivalent of almost 550 million tons (500 metric tons) of greenhouse gases annually, the U.S. Geological Survey said in a 2018 study.
Under Trump, Interior officials approved almost 1,400 permits on federal lands, primarily in Wyoming and New Mexico, over a three-month period that included the election, according to an Associated Press analysis of government data. Those permits, which remain valid, will allow companies to continue drilling for years, potentially undercutting Biden’s climate agenda.
But there are other ways an ambitious Biden administration could make it harder for permit holders to extract oil and gas. “The ability to get your resources out, to get right of way, to get roads, to get supporting infrastructure, not all of that is signed and sealed right now,” Clearview Energy's Book said.
Under President Barack Obama, the Interior Department imposed a 2016 moratorium on federal coal leases while it investigated the coal program's climate effects and whether companies were paying a fair share for coal from public lands. Trump lifted the moratorium soon after taking office.
__
AP writer Cathy Bussewitz contributed from New York.
___
Follow Matthew Brown on Twitter: @MatthewBrownAP
02
Biden halts oil and gas leases on U.S. land, water for 60 days
BILLINGS, Mont. — The Biden administration announced Thursday the suspension of new oil and gas leasing and drilling permits for U.S. lands and waters for 60 days as part a broad review of programs at the Department of Interior.
The move follows President Joe Biden’s campaign pledge to halt new drilling on federal lands and end the leasing of publicly owned energy reserves as part of his plan to address climate change.
The suspension went into effect immediately under an order signed Wednesday by Acting Interior Secretary Scott de la Vega. The order did not limit existing oil and gas operations under valid leases, meaning oil and gas activity won’t come to a sudden halt on the millions of acres of lands in the West and offshore in the Gulf of Mexico where much drilling is concentrated.
The order also blocks the approval of new mining plans, land sales or exchanges and the hiring of senior-level staff at the agency.
The administration’s announcement drew a quick backlash from the oil industry’s main trade group, the American Petroleum Institute, which said limiting access to publicly owned energy resources would mean more foreign oil imports, lost jobs and fewer tax revenues.
“Impeding American energy will only serve to hurt local communities and hamper America’s economic recovery,” petroleum institute President Mike Sommers said in a statement.
National Wildlife Federation Vice President Tracy Stone-Manning welcomed the move and said she expected Biden to make good on his campaign promises and end leasing altogether or at the least impose a long-term moratorium on any new issuances.
“The Biden administration has made a commitment to driving down carbon emissions. It makes sense starting with the land that we all own,” she said.
But the impact could be blunted by companies that stockpiled drilling permits in the closing months of the Trump administration.
Officials approved almost 1,400 permits on federal lands, primarily in Wyoming and New Mexico, over a three-month period that included the election. Those permits, which remain valid, will allow companies to continue drilling for years, potentially undercutting Biden’s climate agenda.
Oil and gas extracted from public lands and waters account for about a quarter of annual U.S. production. Extracting and burning those fuels generates the equivalent of almost 550 million tons (500 metric tons) of greenhouse gases annually, the U.S. Geological Survey said in a 2018 study.
03
Why Natural Gas Producers Are Betting Big On Hydrogen
With president-elect Joe Biden having vowed to return the United States to the 2015 Paris Climate Accord as a matter of urgency, the clean energy sector is about to gain a big ally in Washington.
But not so much the fossil fuel sector, by far the biggest contributor to greenhouse gas (GHG) emissions. In fact, the EIA released a damning report that in 2018, carbon dioxide (CO2) emissions from burning fossil fuels were equal to ~75% of total U.S. anthropogenic GHG emissions and ~93% of total U.S. anthropogenic CO2 emissions (based on 100-year global warming potential).
But make no mistake about it, the sector has no plans to go out with a whimper and has for years been packaging natural gas as a suitable and credible fuel bridge that will remain dominant for decades as dirtier fossil fuels gradually make way for renewable energy.
Unfortunately, whereas that narrative might have been valid a few years ago, it is increasingly becoming a hard sell as solar and wind costs continue to fall at an unprecedented clip.
Although cleaner than coal and oil, natural gas is still orders of magnitude dirtier than the dirtiest renewable energy sources when accounting for lifecycle emissions.
The natural gas industry fully understands this and is now courting yet another renewable ally: Hydrogen.
Lifecycle GHG Emissions Intensity of Electricity Generation Methods
Comparison of LCA Results Between Sources
Source: World Nuclear Association
False narrative
Hydrogen as a fuel source has been on the market for decades. Still, it has never really been able to break the glass ceiling of mass-market appeal, mainly due to a host of technical and cost issues.
Indeed, battery power has mostly been winning the race to replace the internal combustion engine (ICE) more than any other alternative fuel type. EV companies like Tesla Inc. (NASDAQ:TSLA) have already hit the fast lane while hydrogen-powered fuel cell electric vehicles (FCEVs) appear to have stalled on the start line.
A case in point is California, one of the greenest states in the United States. The golden state boasts a grand total of 20,992 EV charging stations compared to just 40 public hydrogen fueling stations.
But now, Wall Street believes that the hydrogen fuel economy has finally reached a tipping point, and hydrogen could soon develop into a globally-traded energy source, just like oil and gas. Related: Biden Plans To Kill Keystone XL Oil Pipeline
London–based global information provider IHS Markit has reported that a growing number of oil, automotive, and other companies have been proactively investing in hydrogen technologies.
The analyst says that countries across the globe are investing in hydrogen either as a tool to meet ambitious decarbonization goals or an opportunity for export.
For instance, hydrocarbon exporting countries in the Middle East well endowed with high solar insolation; coal-rich countries like Australia, gas-rich countries like Russia as well as highly industrialized energy-importing countries in Asia and Europe are all showing a keen interest in hydrogen.
More importantly, zero-carbon hydrogen has recently been injected into a UK gas network for the first time in a groundbreaking trial that could help to reduce carbon dioxide emissions. The 20% hydrogen and natural gas blend is being used to heat 100 homes and 30 faculty buildings at Keele University in Staffordshire. If successful, the project could be expanded to cover wider parts of the country and possibly be adopted by other countries.
Natural gas remains the most dominant fuel source in the U.S. electricity generation mix, but maybe not for much longer.
Source: EIA
Cheap renewables
Renewable energy has lately become more affordable, accessible, and more prevalent than ever before thanks to technology improvements, competitive procurement and a large base of experienced, internationally active project developers.
In fact, according to the International Renewable Energy Agency (IRENA), solar and wind power generation are now fully competitive with fossil fuel power plants, with the global weighted average levelized cost of electricity (LCOE) for utility-scale solar PV cells having declined 75% to below USD 0.10/kWh since 2010. Related: Canada Is Cleaning Up Its Oil Sands
But solar costs are still declining.
At an LCOE of $0.085/kWh for photovoltaic cells and $0.185/kWh for concentrating solar projects, solar power(utility-scale + residential rooftop) remains more expensive than other renewable sources, including hydro, onshore wind, geothermal, and bioenergy. However, this IEA prediction says solar power is about to become one of the cheapest, if not the cheapest, ways to generate electricity by 2025.
The capacity-weighted average is the average levelized cost per technology, weighted by the new capacity coming online in each region. The capacity additions for each region are based on additions from 2023 to 2025. Technologies for which capacity additions are not expected do not have a capacity-weighted average and are marked as NB, or not built.
2O&M = operations and maintenance.
Source: EIA
Favorable hydrogen economics
On the other hand, cheap green hydrogen could quickly make natural gas irrelevant.
Green hydrogen is hydrogen produced by the electrolysis of water using 100% renewable energy, thus making it a zero-carbon source.
Unfortunately, less than one percent of the world's hydrogen production is of the green type, with the vast majority being derived from natural gas reforming. Indeed, 95% of the hydrogen produced in the United States is currently made by natural gas reforming i.e., gray hydrogen.
The big problem here is that producing large amounts of green hydrogen requires massive amounts of renewable energy; For instance, the UK government's independent Climate Change Committee estimates that the country would need 30x its current offshore wind capacity in order to produce enough green hydrogen to replace all gas boilers in the UK.
But that might be about to change.
Last year, the world's green hydrogen leaders joined hands with an ambitious goal to drive a 50-fold scale-up in green hydrogen production over the next six years that could lead to a major fall in green hydrogen prices.
The Green Hydrogen Catapult Initiative is a brainchild of founding partners Saudi clean energy group ACWA Power, Australian project developer CWP Renewables, European energy giants Iberdrola and Ørsted, Chinese wind turbine manufacturer Envision, Italian gas group Snam, and Yara, a Norwegian fertilizer producer.
The companies hope to drive 25GW of green hydrogen production by 2026, a scale that could significantly drive down hydrogen costs to below $2/kg thus making the fuel source competitive with fossil fuels in power generation. The companies hope to drive 25GW of green hydrogen production by 2026, a scale that could significantly drive down hydrogen costs to below $2/kg thus making the fuel source competitive with fossil fuels in power generation.
If successful, natural gas' days as the most dominant fuel source in the U.S. electricity generation mix could be numbered.
By Alex Kimani for Oilprice.com
More Top Reads From Oilprice.com:
BILLINGS, Mont. (AP) — The Biden administration announced Thursday a 60-day suspension of new oil and gas leasing and drilling permits for U.S. lands and waters, as officials moved quickly to reverse Trump administration policies on energy and the environment.
The suspension, part of a broad review of programs at the Department of Interior, went into effect immediately under an order signed Wednesday by Acting Interior Secretary Scott de la Vega. It follows Democratic President Joe Biden’s campaign pledge to halt new drilling on federal lands and end the leasing of publicly owned energy reserves as part of his plan to address climate change.
The order did not ban new drilling outright. It includes an exception giving a small number of senior Interior officials — the secretary, deputy secretary, solicitor and several assistant secretaries — authority to approve actions that otherwise would be suspended.
The order also applies to coal leases and permits, and blocks the approval of new mining plans. Land sales and exchanges and the hiring of senior-level staff at the agency also were suspended.
Under former President Donald Trump, federal agencies prioritized energy development and eased environmental rules to speed up drilling permits as part of the Republican's goal to boost fossil fuel production. Trump consistently downplayed the dangers of climate change, which Biden has made a top priority.
On his first day in office Wednesday, Biden signed a series of executive orders that underscored his different approach — rejoining the Paris Climate Accord, revoking approval of the Keystone XL oil pipeline from Canada and telling agencies to immediately review dozens of Trump-era rules on science, the environment and public health.
The Interior Department order did not limit existing oil and gas operations under valid leases, meaning activity won't come to a sudden halt on the millions of acres of lands in the West and offshore in the Gulf of Mexico where much drilling is concentrated. Its effect could be further blunted by companies that stockpiled enough drilling permits in Trump's final months to allow them to keep pumping oil and gas for years.
Erik Milito with the National Ocean Industries Association, which represents offshore energy firms, said he was optimistic companies still will be able to get new permits approved through the senior-level officials specified in the order.
But Biden’s move could be the first step in an eventual goal to ban all leases and permits to drill on federal land. Mineral leasing laws state that federal lands are for many uses, including extracting oil and gas, but the Democrat could set out to rewrite those laws, said Kevin Book, managing director at Clearview Energy Partners.
The administration's announcement drew outrage from Republicans and some industry trade groups. They said limiting access to publicly owned energy resources would mean more foreign oil imports, lost jobs and fewer tax revenues.
Republican Sen. John Barrasso of Wyoming said the administration was “off to a divisive and disastrous start." He added that the government is legally obliged to act on all drilling permit applications it receives and that “staff memos” can't override the law.
“Impeding American energy will only serve to hurt local communities and hamper America’s economic recovery,” American Petroleum Institute President Mike Sommers said in a statement.
National Wildlife Federation Vice President Tracy Stone-Manning said she expected Biden to make good on his campaign promise to end leasing altogether, or at least impose a long-term moratorium on any new issuances.
“The Biden administration has made a commitment to driving down carbon emissions. It makes sense starting with the land that we all own,” she said. “We have 24 million acres already under lease. That should get us through."
Oil and gas extracted from public lands and waters account for about a quarter of annual U.S. production. Extracting and burning those fuels generates the equivalent of almost 550 million tons (500 metric tons) of greenhouse gases annually, the U.S. Geological Survey said in a 2018 study.
Under Trump, Interior officials approved almost 1,400 permits on federal lands, primarily in Wyoming and New Mexico, over a three-month period that included the election, according to an Associated Press analysis of government data. Those permits, which remain valid, will allow companies to continue drilling for years, potentially undercutting Biden’s climate agenda.
But there are other ways an ambitious Biden administration could make it harder for permit holders to extract oil and gas. “The ability to get your resources out, to get right of way, to get roads, to get supporting infrastructure, not all of that is signed and sealed right now,” Clearview Energy's Book said.
Under President Barack Obama, the Interior Department imposed a 2016 moratorium on federal coal leases while it investigated the coal program's climate effects and whether companies were paying a fair share for coal from public lands. Trump lifted the moratorium soon after taking office.
__
AP writer Cathy Bussewitz contributed from New York.
___
Follow Matthew Brown on Twitter: @MatthewBrownAP
02
Biden halts oil and gas leases on U.S. land, water for 60 days
BILLINGS, Mont. — The Biden administration announced Thursday the suspension of new oil and gas leasing and drilling permits for U.S. lands and waters for 60 days as part a broad review of programs at the Department of Interior.
The move follows President Joe Biden’s campaign pledge to halt new drilling on federal lands and end the leasing of publicly owned energy reserves as part of his plan to address climate change.
The suspension went into effect immediately under an order signed Wednesday by Acting Interior Secretary Scott de la Vega. The order did not limit existing oil and gas operations under valid leases, meaning oil and gas activity won’t come to a sudden halt on the millions of acres of lands in the West and offshore in the Gulf of Mexico where much drilling is concentrated.
The order also blocks the approval of new mining plans, land sales or exchanges and the hiring of senior-level staff at the agency.
The administration’s announcement drew a quick backlash from the oil industry’s main trade group, the American Petroleum Institute, which said limiting access to publicly owned energy resources would mean more foreign oil imports, lost jobs and fewer tax revenues.
“Impeding American energy will only serve to hurt local communities and hamper America’s economic recovery,” petroleum institute President Mike Sommers said in a statement.
National Wildlife Federation Vice President Tracy Stone-Manning welcomed the move and said she expected Biden to make good on his campaign promises and end leasing altogether or at the least impose a long-term moratorium on any new issuances.
“The Biden administration has made a commitment to driving down carbon emissions. It makes sense starting with the land that we all own,” she said.
But the impact could be blunted by companies that stockpiled drilling permits in the closing months of the Trump administration.
Officials approved almost 1,400 permits on federal lands, primarily in Wyoming and New Mexico, over a three-month period that included the election. Those permits, which remain valid, will allow companies to continue drilling for years, potentially undercutting Biden’s climate agenda.
Oil and gas extracted from public lands and waters account for about a quarter of annual U.S. production. Extracting and burning those fuels generates the equivalent of almost 550 million tons (500 metric tons) of greenhouse gases annually, the U.S. Geological Survey said in a 2018 study.
03
Why Natural Gas Producers Are Betting Big On Hydrogen
With president-elect Joe Biden having vowed to return the United States to the 2015 Paris Climate Accord as a matter of urgency, the clean energy sector is about to gain a big ally in Washington.
But not so much the fossil fuel sector, by far the biggest contributor to greenhouse gas (GHG) emissions. In fact, the EIA released a damning report that in 2018, carbon dioxide (CO2) emissions from burning fossil fuels were equal to ~75% of total U.S. anthropogenic GHG emissions and ~93% of total U.S. anthropogenic CO2 emissions (based on 100-year global warming potential).
But make no mistake about it, the sector has no plans to go out with a whimper and has for years been packaging natural gas as a suitable and credible fuel bridge that will remain dominant for decades as dirtier fossil fuels gradually make way for renewable energy.
Unfortunately, whereas that narrative might have been valid a few years ago, it is increasingly becoming a hard sell as solar and wind costs continue to fall at an unprecedented clip.
Although cleaner than coal and oil, natural gas is still orders of magnitude dirtier than the dirtiest renewable energy sources when accounting for lifecycle emissions.
The natural gas industry fully understands this and is now courting yet another renewable ally: Hydrogen.
Lifecycle GHG Emissions Intensity of Electricity Generation Methods
Comparison of LCA Results Between Sources
Source: World Nuclear Association
False narrative
Hydrogen as a fuel source has been on the market for decades. Still, it has never really been able to break the glass ceiling of mass-market appeal, mainly due to a host of technical and cost issues.
Indeed, battery power has mostly been winning the race to replace the internal combustion engine (ICE) more than any other alternative fuel type. EV companies like Tesla Inc. (NASDAQ:TSLA) have already hit the fast lane while hydrogen-powered fuel cell electric vehicles (FCEVs) appear to have stalled on the start line.
A case in point is California, one of the greenest states in the United States. The golden state boasts a grand total of 20,992 EV charging stations compared to just 40 public hydrogen fueling stations.
But now, Wall Street believes that the hydrogen fuel economy has finally reached a tipping point, and hydrogen could soon develop into a globally-traded energy source, just like oil and gas. Related: Biden Plans To Kill Keystone XL Oil Pipeline
London–based global information provider IHS Markit has reported that a growing number of oil, automotive, and other companies have been proactively investing in hydrogen technologies.
The analyst says that countries across the globe are investing in hydrogen either as a tool to meet ambitious decarbonization goals or an opportunity for export.
For instance, hydrocarbon exporting countries in the Middle East well endowed with high solar insolation; coal-rich countries like Australia, gas-rich countries like Russia as well as highly industrialized energy-importing countries in Asia and Europe are all showing a keen interest in hydrogen.
More importantly, zero-carbon hydrogen has recently been injected into a UK gas network for the first time in a groundbreaking trial that could help to reduce carbon dioxide emissions. The 20% hydrogen and natural gas blend is being used to heat 100 homes and 30 faculty buildings at Keele University in Staffordshire. If successful, the project could be expanded to cover wider parts of the country and possibly be adopted by other countries.
Natural gas remains the most dominant fuel source in the U.S. electricity generation mix, but maybe not for much longer.
Source: EIA
Cheap renewables
Renewable energy has lately become more affordable, accessible, and more prevalent than ever before thanks to technology improvements, competitive procurement and a large base of experienced, internationally active project developers.
In fact, according to the International Renewable Energy Agency (IRENA), solar and wind power generation are now fully competitive with fossil fuel power plants, with the global weighted average levelized cost of electricity (LCOE) for utility-scale solar PV cells having declined 75% to below USD 0.10/kWh since 2010. Related: Canada Is Cleaning Up Its Oil Sands
But solar costs are still declining.
At an LCOE of $0.085/kWh for photovoltaic cells and $0.185/kWh for concentrating solar projects, solar power(utility-scale + residential rooftop) remains more expensive than other renewable sources, including hydro, onshore wind, geothermal, and bioenergy. However, this IEA prediction says solar power is about to become one of the cheapest, if not the cheapest, ways to generate electricity by 2025.
The capacity-weighted average is the average levelized cost per technology, weighted by the new capacity coming online in each region. The capacity additions for each region are based on additions from 2023 to 2025. Technologies for which capacity additions are not expected do not have a capacity-weighted average and are marked as NB, or not built.
2O&M = operations and maintenance.
Source: EIA
Favorable hydrogen economics
On the other hand, cheap green hydrogen could quickly make natural gas irrelevant.
Green hydrogen is hydrogen produced by the electrolysis of water using 100% renewable energy, thus making it a zero-carbon source.
Unfortunately, less than one percent of the world's hydrogen production is of the green type, with the vast majority being derived from natural gas reforming. Indeed, 95% of the hydrogen produced in the United States is currently made by natural gas reforming i.e., gray hydrogen.
The big problem here is that producing large amounts of green hydrogen requires massive amounts of renewable energy; For instance, the UK government's independent Climate Change Committee estimates that the country would need 30x its current offshore wind capacity in order to produce enough green hydrogen to replace all gas boilers in the UK.
But that might be about to change.
Last year, the world's green hydrogen leaders joined hands with an ambitious goal to drive a 50-fold scale-up in green hydrogen production over the next six years that could lead to a major fall in green hydrogen prices.
The Green Hydrogen Catapult Initiative is a brainchild of founding partners Saudi clean energy group ACWA Power, Australian project developer CWP Renewables, European energy giants Iberdrola and Ørsted, Chinese wind turbine manufacturer Envision, Italian gas group Snam, and Yara, a Norwegian fertilizer producer.
The companies hope to drive 25GW of green hydrogen production by 2026, a scale that could significantly drive down hydrogen costs to below $2/kg thus making the fuel source competitive with fossil fuels in power generation. The companies hope to drive 25GW of green hydrogen production by 2026, a scale that could significantly drive down hydrogen costs to below $2/kg thus making the fuel source competitive with fossil fuels in power generation.
If successful, natural gas' days as the most dominant fuel source in the U.S. electricity generation mix could be numbered.
By Alex Kimani for Oilprice.com
More Top Reads From Oilprice.com:
