An associate recently sent me a news release published by the Center for Biological Diversity in January 2022. According to the release, the number of oil and gas drilling permits approved by the Biden administration in its first year “stomps Trump’s by 34%.” My associate wondered how, or if, I had a response to the numbers quoted by the environmental group.
The news release noted that there were “thousands of permits OK’d despite [the] President’s authority to end drilling by 2035.” If accurate, this news release would seem to disprove the many reports claiming President Joe Biden is working to limit oil and gas industry activity across the nation. After all, how could an administration that is “stomping” the Trump administration—and its stated policy of asserting America’s “energy dominance”—possibly be considered anti-energy?
While the numbers cited in the release might be technically correct, they effectively tell a lie by omission. The numbers take on a starkly different meaning when the missing context is provided.
First, the Center for Biological Diversity refers to approved “permits” in its news release. As a recent piece by David Blackmon explains, green groups and the current residents of the White House like to throw out industry and regulatory terms that they don’t appear to fully understand. They report large numbers of unused “permits” and “leases” in an attempt to paint the oil and gas industry as wastefully refusing to make use of regulatory approvals. At the same time, they use these permitting numbers to imply that the nation is somehow dangerously ramping up oil and gas production. A recent example of this trend is the White House’s insistence that American oil and gas producers are sitting on “9,000 unused drilling permits here in the U.S.”
While commenters on social media appear eager to fall for these word games, Blackmon clearly understands the terms, as well as the regulatory regime and economic realities associated with producing oil. He correctly explains that obtaining a lease or even a permit does not necessarily and immediately equate to the production of oil and gas.
“The taking of a lease, whether on federal or private lands, is a speculative act,” Blackmon points out. In this act, the lessee agrees to search for oil and gas within a set timeline. Most times, it is not clear that the lessee will find resources or whether there will be sufficient quantities to justify drilling. Under normal conditions, the lessee then must spend millions doing seismic surveys and other testing before proceeding to drill an even more expensive test well. Often these initial tests show no economic resources, meaning “those leases will remain undrilled.”
But…but…but…sputters the chattering classes, the White House said “permits” not “leases.” Blackmon deals with this bit of equivocation as well. He notes that, if after obtaining a lease, “the preliminary tests do indicate the presence of economic resources, only then will the lessee seek to obtain a permit.” That permit provides approval from the appropriate government agency to move forward with drilling a well. But, even after a permit is approved, if “economic conditions change or the lessee is unable to raise the capital needed to fund the drilling of said well,” again, Blackmon notes, “those permits will remain unused.”
And the part about being “unable to raise the capital needed to fund the drilling” is key, because the Biden administration has unilaterally imposed several policies that negatively impact the ability of oil and gas producers to raise the capital needed to fund exploration and drilling. See for example, number 44 in the American Energy Alliance’s list of 125 ways the Biden administration has made it harder to produce oil and gas in the U.S. In this case, the Biden administration imposed a rule requiring fiduciaries to consider the effects of climate change and other environmental, social, and corporate governance measures when considering investing in retirement funds. That rule has the effect of pulling capital away from domestic oil and gas development.
But that isn’t the only issue with the Center for Biological Diversity’s news release. Another flaw is that they are comparing President Trump’s first year with Biden’s first year. Let’s not forget that, in his first year, Mr. Trump was rebuilding after the damage done to the American oil and gas industry by the Obama administration.
Industry reports show that in Obama’s last year, the federal government approved 2184 permits. In comparison, in Trump’s final year, the federal government approved 4226, a 93% increase. But in Biden’s first year, the Center reports that the number of approved permits shrank to 3,557, which represents a 16% drop in a single year.
While the Center for Biological Diversity roundly criticized the Biden administration for “runaway drilling approvals,” which they characterized as “a spectacular failure of climate leadership,” the rapid drop-off in permitting makes it clear that the Biden administration is no friend of domestic oil and gas production.
Outlandish claims by progressive greens that Biden is “stomping” the energy-dominance focus of President Trump should be viewed with the numbers in context. Doing so demonstrates that claims like those in the Center’s news release are yet another example of an environmental group equivocating on terms and omitting information that might have tended to disprove its hysterical and inaccurate claims.
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