New proposals from the Biden administration and Congress could have a major impact on the mainstay of Louisiana and Houma-Thibodaux’s economies: oil and gas.
Biden and the oil industry have long been at odds as he follows through on a campaign pledge to reduce pollution, rising seas and other harmful effects that greenhouse gases from fossil fuels cause on the planet.
Its latest action came on Friday when the Home Office proposed major changes to the federal government’s oil and gas leasing program. The report includes a recommendation to increase royalty rates, or the price the government charges oil and gas companies to drill on federal lands and waters, including the Gulf of Mexico.
Oil:Biden launches oil and gas leasing reform, but fails to ban
“Our nation is facing a deep climate crisis that affects all Americans. The Home Office has an obligation to responsibly manage our public lands and waters – providing a fair return to the taxpayer and mitigating worsening climate impacts – while remaining steadfast in the pursuit of environmental justice Home Secretary Deb Haaland said when releasing the report. “This review highlights significant gaps in federal oil and gas programs and identifies important and urgent fiscal and program reforms that will benefit the American people.”
Oil groups expressed immediate opposition.
“During one of the busiest travel weeks of the year, when rising energy costs are even more apparent to Americans, the Biden administration is sending mixed signals,” said Frank Macchiarola , senior vice president of the American Petroleum Institute, in a press release. . “Days after a public speech in which the White House said the president was” using every tool at its disposal to work to lower prices and address the lack of supply, “his Home Office proposed to ” raising the costs of US energy development without a clear roadmap for the future of federal leasing.
Oil reserve:President Biden opens oil reserve to ease high gas prices, but it won’t be immediate
Meanwhile, the Biden-backed Build Back Better legislation passed by the House on Nov. 19 includes several provisions that would also limit drilling and make it harder and more expensive to explore and produce oil and gas. Among its provisions:
- A permanent ban on drilling off most of the country’s coasts, including the eastern Gulf of Mexico. Congress has repeatedly enacted bans in this area, the last one due to expire in June. The Trump administration issued an executive order extending the ban until 2032, but that could be overturned by any president without Congressional action.
- A royalty on methane released from wells, pipelines, and oil and gas storage sites.
- About $ 300 in combined tax credits to encourage the use of renewable energy instead of fossil fuels to generate electricity, power vehicles and manufacture goods.
- Tax credits of up to $ 12,500 for the purchase of a new electric vehicle and $ 4,000 for a used vehicle.
The bill, which is now heading to the Senate, has received a lot of praise from environmental groups.
“The Build Back Better Act would help us achieve the emissions reductions and in-kind gains we need to ensure a cleaner, healthier and more secure future,” said Kameran Onley, director of North American policy and government relations at The Nature Conservancy, in a statement. “This includes $ 555 billion in climate investments and tougher policies to deal with the climate crisis than we have ever seen before. “
However, environmentalists had mixed reactions to Friday’s Home Office report.
“We commend the Biden administration for recognizing the serious shortcomings of the current oil and gas leasing program and for carrying out long overdue reforms,” said Athan Manuel, director of the Land Protection Program of the Sierra Club. “But to truly tackle the climate crisis, we need to phase out all new rentals of fossil fuels on public land and at sea, activities that contribute almost a quarter of this country’s greenhouse gas emissions. . “
A trading group whose members include oil and gas service companies in Houma-Thibodaux, Louisiana and across the United States also offered mixed reactions to some of the latest actions.
National Ocean Industries Association chairman Erik Milito said the House measure, or the reconciliation bill, advances smart offshore wind and carbon capture policies. Offshore wind, he said, offers a “generational energy and economic opportunity,” and widespread carbon capture will be key to meeting global climate change goals.
“However, the language of the House also includes provisions on oil and gas which are nothing more than punitive measures,” Milito said. “These include arbitrary new charges that would add millions of dollars in annual operating costs, by pricing US production.”
– Keith Magill, editor of Courier and Daily Comet, can be reached at 857-2201 or [email protected] Follow him on Twitter @CourierEditor.