January 28, 2021 01:17 PM UTC

Oil and Gas Industry Blames Biden, Ignores Reality

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• by: Colorado Pols

On Wednesday, President Joe Biden ordered a moratorium on new leases for oil and gas drilling on public lands. As Judith Kohler reports for The Denver Post, this decision led to a lot of angry shaking fists from O&G industry backers:

The order makes tackling climate change a priority and will be in place for public lands and waters while leasing and permitting practices for fossil fuel development undergo a “rigorous review.” It follows a directive issued Jan. 22 that halted new leases and permits for 60 days but allowed high-ranking Interior Department officials to approve activities on federally managed lands…

…But the Denver-based Western Energy Alliance, an industry organization, said a recent study by a Wyoming trade group shows a prolonged leasing moratorium could cost eight Western states as much as $33.5 billion over Biden’s first term and 58,676 jobs annually. The president doesn’t have the authority to ban leasing on public lands, said Kathleen Sgamma, the group’s president, and the group filed a lawsuit Wednesday to stop the executive order.

The O&G industry went with a predictable “sky is falling” response to Biden’s moves, but as Kohler continues for the Post, the reality is much different:

Brad Handler, senior fellow for public policy at the Payne Institute at the Colorado School of Mines, said he believes the near-term impact of the leasing moratorium will be much less than the industry says. Several companies anticipated a pause in leasing, which was a pledge that Biden made during the campaign, and they “filed applications aggressively and received permits,” particularly on public lands in the Permian Basin in southeastern New Mexico.

“A few of them say they have as much as four years of running room to proceed as normal,” Handler said. “So, I think the net impact on the industry will be very small.”

For as much as Republicans and industry shills would like to blame Biden and Democrats for their troubles, their real enemy is something far more immovable: Time.

[mantra-pullquote align=”center” textalign=”left” width=”95%”]“If you can sell a vehicle that doesn’t use any gas at all for the same price of a vehicle that does burn gas, you don’t have to do that math of, is it worth the payback or not?”

 — Ken Morris, vice president for electric and autonomous vehicles at General Motors[/mantra-pullquote]

As The Washington Post reports today, the market (and the world) is changing:

General Motors said Thursday that it will end the sale of all gasoline and diesel powered passenger cars and light sports utility vehicles by 2035, marking an historic turning point for the big U.S.-based carmaker and a future full of new electric vehicles for American motorists… [Pols emphasis]

…Fred Krupp, president of the Environmental Defense Fund, which had worked with GM on its plan, called it a “breakthrough moment.”

“And it’s part of a wave of industry action that reinforces what the Biden Administration is doing,” Krupp said.

This is not dissimilar to an argument that played out over the last decade about the coal industry. Right wing critics and politicians loved to blame Democrats and environmentalists for the death of coal, when the true cause was much less sinister: Coal reached a point where it could no longer compete with cheaper and more efficient energy sources such as natural gas.

That same shift is now happening here. General Motors isn’t phasing out gasoline-powered vehicles because President Biden yelled at them; they’re doing it because market changes compel a new direction. As Ken Morris, GM vice president for electric and autonomous vehicles, told “Automobile” magazine in April 2020:

The beauty of electric vehicles is, it’s not completely independent of the fuel prices, but I think it’s largely independent of the fuel prices, because there are a couple of things that are important. One, we feel so strongly about electric vehicles because [GM’s] mission statement is zero crashes, zero emissions, and zero congestion. Electric vehicles are zero-emissions right out of the box. That’s a key element.

Two, you also talk about the driving experience and the ownership experience. You don’t have to go to the gas station at all. You can charge at home, you can charge at work, you can charge at the rapidly growing infrastructure that has charge stations around the country.

For as much as right wing politicos love to talk about the importance of preserving a free market economy, they sure get bent out of shape when that same market veers off in another direction.

Things change. The demand for oil and gas is no exception.