Energy In Depth
As Fuel Prices Drive Record Inflation Numbers, Interior Secretary Says Department “Doesn’t Consider Cost” In Federal Oil And Gas Program
By Nicole Jacobs
During a recent Senate Appropriations hearing, Interior Sec. Deb Haaland admitted that under her leadership, the Department of Interior does not consider rising energy costs in its decision making concerning the federal oil and natural gas program.
Sen. Cindy Hyde-Smith (R-Miss.) asked Sec. Haaland directly if she was “aware that a no lease sale option could increase the price of all energy” in reference to Interior’s recent announcement that the new five-year Outer Continental Shelf leasing plan may not include any leasing at all. To this, Sec. Haaland – who has been largely absent from Biden administration’s energy price discussions this year – responded:
“When we are talking about our five-year plan and our job at the Interior, we don’t take cost into consideration in that respect, because we’re focusing on managing our natural resources.”
The approach of not considering costs in decisions puts Interior out of touch with the concerns of millions of Americans.
In June, inflation hit a 40-year record high at 9.1 percent year-over-year, and energy prices are the biggest contributor to that.
Yet the one place where the administration can truly impact the oil and natural gas supply – federal lands and waters – to encourage the investment that would help lower costs for consumers is the one place where “cost” isn’t being taken into consideration. And it shows.
The first year and a half of the Biden administration’s tenure was marked by no new oil and natural gas lease sales on federal lands, and the sales that were finally held onshore were a fraction of what was nominated with higher costs to develop the assets. Meanwhile, the only offshore sale that was held was later vacated and the administration chose not to appeal it – although they continue to appeal an injunction requiring Interior to hold sales in the first place.
Earlier this year, after months of consideration, Interior announced it would not move forward with Lease Sale 258 of the Cook Inlet land in southwestern Alaska and also cancelled the remaining sales under the 2017-2022 five-year plan. The Department justified their cancellation of Sale 258 citing “lack of industry interest in leasing in the area.”
During the hearing this week, Sen. Lisa Murkowski (R-Alaska) referred to the Cook Inlet lease sale directly, pointing out that its cancellation had a negative impact on both prices and global carbon emissions:
“In the environmental analysis, the Department’s expert stated that if no lease sale occurred, the price for gas would increase as would emissions due to use of alternative fuels.”
Sen. Murkowski also claimed that from her perspective as a senator from Alaska, there was significant interest from the industry to increase drilling in Alaska and help bring down costs. In parts of Alaska, consumers are paying over $7 a gallon for gasoline.
Sen. Hyde-Smith further reiterated the negative impacts of no lease sales in the United States:
“Importing foreign energy also increases emissions because countries sending us energy have lower standards than we do.”