The Energy 202: Trump administration pauses some oil and gas leasing amid coronavirus

with Paulina Firozi

The Trump administration appears to be pumping the brakes on auctioning off the rights to drill for oil and gas on some public lands out West as the coronavirus pandemic continues to slam the energy economy.

The Bureau of Land Management abruptly postponed a scheduled auction of 45,000 acres in New Mexico scheduled for Wednesday and Thursday of last week.

And the agency, which oversees oil and gas leasing on public lands, also has yet to announce periods during which the public can comment on three other proposed sales — a legally necessary step for proceeding with the auctions — in Utah and Nevada over the next four months.

The BLM provided little explanation for its actions, but they come as the price of oil has plummeted.

The agency said it has been following health guidelines from federal and state officials in all its auctioning decisions, but did not explain why it stopped the auction in New Mexico.

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“All of our actions, including comment periods and lease sales, are being evaluated on a case-by-case basis, and adjustments are being made to ensure we are allowing for proper public input, while protecting the health and safety of the public and our employees,” said BLM spokeswoman Megan Crandall.

The state of Utah, meanwhile, made what it called a “conscious decision” to halt its own oil and gas auctions on state-owned lands until July because of “current market factors” tied to the pandemic, according to the state’s website.

The price of West Texas Intermediate oil, a U.S. benchmark, has rebounded a bit since its lowest point during the pandemic. But the price oil is fetching on the open market has still been slashed nearly in half since the start of the year as fewer Americans drive, fly or work in factories to help halt the virus’s reach.

Also weighing on the Trump administration is a series of court rulings vacating past lease sales. Earlier this month, U.S. District Judge Brian Morris ruled the BLM improperly issued 287 oil and gas leases on nearly 150,000 acres in Montana after not adequately accounting for drilling’s impact on both local water supplies and on global climate change.

And just on Friday, Morris canceled energy leases on more than 470 square miles of public land in Montana and Wyoming, saying the Interior Department did not do a good enough job protecting the habitat for greater sage grouse, a declining bird species.

The lack of information from the BLM has even Trump’s industry allies scratching their heads.

“We don’t know what happened with the New Mexico and Utah lease sales,” said Kathleen Sgamma, head of the Western Energy Alliance, which represents oil and gas companies. “We have calls into BLM, but haven’t gotten a response.”

Aaron Weiss, deputy director of the Center for Western Priorities, was checking the BLM’s website on the evening of May 19 and was surprised to see the lease sale scheduled for the next day was suddenly canceled.

It’s “really bizarre,” said Weiss, whose group opposes the Trump administration’s aggressive oil and gas leasing plans. “We’ve been watching that since we were keeping tabs on the lease sale.”

Another government web page initially said that a comment period for a lease sale of potentially more than 150,000 acres in southern Utah would end on Aug. 24. Now it just says the comment period is “TBD.”

“It’s been really hard from our end to figure out what is going on,” said Landon Newell, a staff attorney with the Southern Utah Wilderness Alliance, which opposes the auction that could bring oil drilling closer to Arches and Canyonlands national parks.

The delays come as the Trump administration offers existing wells near proposed lease sites an economic lifeline.

In Utah alone, 76 wells operated by six companies have been given relief on royalty payments since late April. Other state-level BLM offices have yet to release information on who is getting royalty relief outside Utah.

Many of those leases are located in the same red rock landscape in Utah with parcels set for auction in September.

New drilling activity could bring diminished air quality and bright flames from the burning off of excess gas to a region known for its clear night skies and stunning canyon vistas. The area’s two national parks draw in millions of visitors annually.

“This handout to the oil and gas industry highlights the absurdity of the Trump administration BLM’s ‘energy dominance’ agenda,” Newell said. “The world is awash in unneeded oil and gas but nonetheless the BLM insists on opening up more public lands.”

But the BLM said it’s difficult to predict the price of oil once wells on the auction block later this year start producing.

“While oil and gas production on federal lands is a market-driven activity, we cannot know what the oil and gas market will look like when the sale is held or when production begins,” Crandall said. “These sales help propel America’s economy and support good-paying energy sector jobs.”

Power plays

The Trump campaign says Joe Biden’s offshore energy ban would “kill jobs.”

In an email to supporters, the campaign linked to a Reuters story on a new report from the National Ocean Industries Association, which represents the offshore oil industry, that said a U.S. ban on new offshore drilling in the Gulf of Mexico would lead to thousands of job losses and billions in government revenue lost over two decades.

The NOIA report does not mention Biden by name, but the presumptive Democratic nominee has vowed to ban new permitting for offshore drilling.

“The global pandemic has already put severe strain on America’s energy manufacturers,” the Trump campaign wrote in an email. “ … While President Trump is working around the clock to support these workers, Joe Biden is campaigning on bankrupting them, pledging to ban fracking and most recently announcing he would ‘proudly’ stop construction of the Keystone XL Pipeline and the tens of thousands of jobs that come with it.”

Coronavirus latest

Reopening beaches and lakes remains a point of contention across the country.

After viral images of waterfront parties over the weekend at the Lake of the Ozarks in Missouri, St. Louis County officials issued a travel advisory and called the scenes an “international example of bad judgment.”

St. Louis County’s public health department called on “any person who has traveled and engaged in this behavior should self-quarantine for 14 days or until they receive a negative test result for COVID-19.” St. Louis County Executive Sam Page called on people to take personal responsibility since such an advisory is difficult to enforce, per ABC News affiliate KVUE. “And if, at any point, crowded events lead to an increase in cases and hospital admissions, Page said we could move backwards in the reopening timeline,” per the report.

“This is a time when we’re starting to ease some of our restrictions and get more movement in our community and try and do it in a thoughtful, measured way. And what we saw this weekend was not thoughtful,” Page said.

In other news

There’s one type of coal that could help the post-pandemic recovery.

Steelmakers can use coking coal to reduce iron ore into liquid metal, and as China begins to rebuild its economy amid the ongoing pandemic, it’s using the coal to produce steel, E&E News reports.

Environmental advocates seem to have done little to target this type of coal. “At high temperatures, steelmakers can use coking coal to reduce iron ore into liquid metal. But that process, which has been around since the 19th century, is a major source of the carbon dioxide emissions heating up the globe,” per the report. “ … Experts doubt that Wall Street will cut off funding to coking coal until environmentalists or regulators force them to.”

In the United States, meanwhile, another coal plant will shutter.

Wisconsin electric utility, Alliant Energy Corp., announced it will shutter its Edgewater coal-fired power plant on Lake Michigan by the end of 2022, Wisconsin Public Radio reports. The closure of the plant is the latest in a series of shutdowns in the Midwest.

Biologists have trapped the 1,000th California Condor.

Scientists from The Peregrine Fund captured and tagged the 1,000th California condor, North America’s largest flying bird.

As Reis Thebault reported last summer, a consortium of government agencies and nonprofit groups announced then that 1,000 of the birds had hatched since an official rescue program began — a milestone that follows almost four decades after just 22 California condors were left worldwide.

The newly trapped bird — now being called Condor 1K — hatched last May, the first condor in recorded history to fledge from Zion National Park. The transmitter attached to the bird will help biologists further understand the bird’s movements and behaviors.

Weather watch

A heat wave is coming to Southern California.

The high temperatures, 10 to 18 degrees above normal in inland areas and hitting triple digits in some places, could continue through Thursday. The weather could dry out vegetation that could fuel brush fires, the Los Angeles Times reports.

HOT weather will affect #SoCal today-Thu, with an Excessive Heat Warning for the Antelope Valley starting Tue. Use caution working or recreating outdoors during this time! #CAwx #LAheat pic.twitter.com/58OxHorinL

— NWS Los Angeles (@NWSLosAngeles) May 25, 2020

“The National Weather Service has issued an excessive heat warning for the region, indicating that conditions will significantly increase the potential for heat-related illnesses — particularly among vulnerable populations such as children and seniors, according to Kristen Stewart, a meteorologist at the agency’s Oxnard office,” per the report. Stewart said the temperatures will be “unseasonably warm” but not record-breaking.

There’s a major downpour drenching parts of the Southeast.

Over the holiday weekend, 8 to 10 inches of water poured over a swath from Fort Lauderale to the upper Keys. In some places, the rain was the “most impressive since Hurricane Irma struck in September 2017,” Matthew Cappucci reports. “This time around, the instigating system isn’t a tropical storm or hurricane — though it did catch the eye of the National Hurricane Center, which issued a special bulletin noting that it could trigger tropical downpours and flash flooding.”

The system is set to arrive early Wednesday near the North Carolina-South Carolina state line, “bringing eight- to 10-hours period of heavy rain and downpours. A widespread two to three inches is possible, with localized four-inch-plus amounts.”

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