Energy & Environment — Feds set to hold oil and gas lease sales this week


The Biden administration is gearing up for new oil and gas drilling, while the G-7 is also putting out messaging that’s favorable to natural gas.

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Interior set to hold first oil lease sales under Biden

The Biden administration is set to hold lease sales for new oil and gas drilling on public lands this week will implement new regulations for producers.

  • Why it’s important: The oil auctions will effectively be the administration’s first, since the only other lease sale it has held was tossed in court on environmental grounds.
  • Where it’s happening: The administration is expected to auction off parcels of federally owned land for drilling in seven Western states: Wyoming, Montana, North Dakota, Nevada, Utah, New Mexico and Colorado.

When it announced the sales in April, the Interior Department said it was shrinking the overall land it was making available by 80 percent compared to the total amount of land it originally considered for the sale.

The department also announced that it would raise fees that oil companies pay to the government for the oil they extract, raising royalty rates from the 12.5 percent imposed on previous sales to 18.75 percent for the new sales.

In a statement from the time, the department said that the changes would help with “addressing deficiencies” in the program.

Not expected to impact oil supply: The lease sales are not expected to immediately impact the country’s oil supply, since it takes more than four years on average from the time they acquire their leases for companies to begin producing oil.

  • However, at a time when many Americans are struggling with skyrocketing gasoline prices, the optics of the sale could matter.

No one is too pleased: Neither industry nor green groups are particularly pleased with the sales, as industry wanted more land and fewer stipulations while many climate hawks wanted no lease sales at all.

Frank Macchiarola, the senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute, said he’s glad the administration is holding the sales but didn’t like the smaller size or other stipulations.

“We are concerned about the reduction in available parcels, we’re concerned about royalty rate increases, we’re concerned that the administration’s approach … is limited at a time when we really need something bold,” he said.

Meanwhile, the administration’s decision to hold lease sales at all has irked left-wing environmentalists who note that locking in more oil and gas drilling will worsen climate change.

“Why are they having these lease sales given the climate impacts that the Biden administration itself recognizes?” asked Michael Freeman, a senior attorney at Earthjustice.

Read more about the upcoming sales here

G-7 endorses natural gas investments

The Group of Seven (G-7) countries are endorsing investments in natural gas as many seek to reduce their dependence on Russian fuels.

  • In a communique issued on Tuesday, the group, which is made up of Canada, France, Germany, Italy, Japan, the United Kingdom and the US, also backed increased deliveries of the fuel.
  • “In this context and with a view to accelerating the phase out of our dependency on Russian energy, we stress the important role increased deliveries of [liquified natural gas] can play, and acknowledge that investment in this sector is necessary in response to the current crisis,” their statement said.

The G-7 nations elaborated that in some cases, government investment in the gas sector can be “appropriate as a temporary response.”

The support for the fossil fuel comes as Russia has moved to cut off gas supplies to several countries when they have refused to pay for it in Russian rubles.

Some backlash: The endorsement miffed climate advocates, who argue that the countries should be moving more toward energy sources that don’t contribute to global warming.

  • “Climate title will not sit idly by while our tax dollars lock in another generation of extraction,” said a statement from Kate DeAngelis, international finance program manager for Friends of the Earth US
  • “The G-7 countries are failing as true climate leaders by abandoning their Glasgow commitments and holding up LNG as an energy response,” DeAngelis said.

So what else was in there? The G-7 memo also included the idea of ​​putting a previously discussed price cap on Russian oil, saying that the group may do so by banning services that help Russian oil travel by sea, unless the oil is purchased below a certain price.

“As for oil, we will consider a range of approaches, including options for a possible comprehensive prohibition of all services, which enable transportation of Russian seaborne crude oil and petroleum products globally, unless the oil is purchased at or below a price to be agreed in consultation with international partners,” the statement said.

Additionally, the countries said they hope to create an international “Climate Club” by the end of this year.

Read more about the memo here

WHAT’S IN YOUR HOUSE’S GAS?

Natural gas used for powering household stoves, furnaces and water may contain levels of cancer-linked compounds that are toxic to residents when leaked, a new study has found.

  • The research, published in Environmental Science & Technology on Tuesday, investigated the composition of greater Boston’s “unburned” household gas, or the gas that comes out of kitchen stovetops when switching on the appliance.
  • While sampling natural gas supplies in more than 200 homes, the authors detected varying concentrations of volatile organic compounds (VOCs) — known not only to be carcinogenic, but also to generate secondary air pollutants such as particulate matter and ozone.

Though most related research has focused on methane — the primary component of natural gas — and its impacts on climate change, the degree to which other air pollutants are present in natural gas at household “end use” remains largely unexplored, according to the study.

From December 2019 through May 2021, researchers collected 234 unburned natural gas samples from 69 kitchen stoves and building pipelines across the Boston region, according to the study.

Within these samples, they detected 296 unique compounds — 21 of which are designated chemical by the federal government as hazardous air pollutants.

Read more here from The Hill’s Sharon Udasin

WHITE HOUSE REJECTS USING FEDERAL LANDS FOR ABORTIONS

White House press secretary Karine Jean-Pierre on Tuesday warned that there could be dangerous ramifications to provide abortion services on federal lands in the wake of the Supreme Court that ruling struck down Roe v. Wade.

  • State of play: The Biden administration has come under pressure from progressives to take tougher actions in response to Roe v. Wade’s overturning, including considering the use of federal land in states opposed to abortion to provide the service.
  • However: Jean-Pierre said it doing so could put those providing and getting the service at legal and physical risk.

“With this proposal — we understand the proposal is well intentioned, but here’s the thing: It could actually put women and providers at risk. And importantly, in states where abortion is now illegal, women and providers who are not federal employees, as you look at the federal land, could potentially be prosecuted,” Jean-Pierre told reporters on Air Force One.

“As we understand why they would put forward this proposal, there’s actually dangerous ramifications to doing this,” she added.

Democrats, including Sen. Elizabeth Warren (Mass.) and Rep. Alexandria Ocasio-Cortez (NY), have called on the Biden administration to use federal land to create places where people can receive abortions in states that restrict them.

Read more here from The Hill’s Alex Gangitano

FLINT INDICTMENTS DIDN’T FOLLOW PROPER PROCEDURE, COURT SAYS

Michigan’s Supreme Court ruled Tuesday that the indictment of former Gov. Rick Snyder (R) and several other officials in connection with the contamination of water in Flint was improper because the grand jury consisted of a single judge.

The high court unanimously overturned the indictments against Snyder and eight others, including former health director Nick Lyon. The one-judge Genesee County grand jury overstepped its legal authority by issuing the indictments, the court wrote.

While state statutes “authorize the use of a one-man grand jury to investigate, subpoena witnesses, and issue arrest warrants, those statutes do not authorize that one-man grand jury to issue an indictment initiating a criminal prosecution,” the court wrote in a 6-0 decision.

  • The decision remands the case against the nine officials to the Genesee Circuit Court.
  • Snyder is due to testify separately in a lawsuit against two companies that advised the city during the water crisis. The former governor is expected to invoke his Fifth Amendment rights against self-incrimination.

“The Citizens of Flint should know that these cases are not over. Public commentary to the contrary is presumptive and rash. Our reading is that the Court’s opinion interprets the one-man grand jury process to require charges to be filed at the district court and include a preliminary examination,” Michigan Solicitor General Fadwa Hammoud said in a statement.

So what’s next for the prosecution? “Our team is prepared to move forward through that process. We relied upon settled law and the well-established prosecutorial tool of the one-man grand jury, used for decades, to bring forward charges against the nine defendants in the Flint water crisis. We still believe these charges can and will be proven in court.”

Read more about the development here

QUOTE OF NOTE

An area of ​​dissension between the White House and its external environmental justice advisors has been the administration’s support for carbon capture and nuclear energy projects.

Peggy Shepard, co-chair of the White House Environmental Justice Advisory Council, told The Hill for a profile that these types of projects “shouldn’t be supported by the government.” She added that the administration’s support for them “makes us doubt their understanding of the issues.”

Read more about Shepard’s activism and work with the Biden administration here

ON TAP TOMORROW

The House Appropriations Committee will mark up budget legislation for the Interior Department and Environmental Protection Agency

WHAT WE’RE READING

  • Oil producers usually tame soaring prices by turning on the taps. Here’s why that may not work this time (CNN)
  • California’s drought means less water to go around. Who is winning the pursuit for water — and who is losing? (The San Francisco Chronicle)
  • Private Investors Betting on Clean Energy Room for Market Selloff (The Wall Street Journal)
  • Pa. Waited more than 2 years to test wells after finding nearby contamination. Now this neighborhood wants answers. (Spotlight PA)
  • City rejects $500 million in asphalt bids over pollution concerns (Chicago Sun-Times)

💦 One more thing: John Oliver talks about western water

That’s it for today, thanks for reading. Check out The Hill’s Energy & Environment page for the latest news and coverage. We’ll see you tomorrow.

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