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Herschel Walker – Did Biden stop domestic oil drilling, as Herschel Walker said? Hardly

Herschel Walker – Did Biden stop domestic oil drilling, as Herschel Walker said? Hardly

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Herschel Walker, the Republican nominee for a hotly contested Georgia Senate seat, took a page from the GOP midterm playbook by accusing President Joe Biden of sabotaging the U.S. ability to produce oil, driving gasoline prices to near record highs.

In a July 13 tweet attacking both his opponent, Democratic Sen. Raphael Warnock, and Biden, Walker wrote, “Gas is more expensive because you and Senator Warnock cancelled the Keystone XL Pipeline and stopped domestic drilling, sending American jobs and energy overseas.”

Biden’s move to stop the Keystone XL pipeline would not have affected the current shortage of supplies, because it would have taken years to build, though it could have an impact on oil supplies further into the future.

In this analysis, we’ll focus on Walker’s other contention — that Democrats, including Biden, “stopped domestic drilling” for oil.

Critics may not approve of Biden’s efforts to turn the United States away from fossil fuels and toward renewable energy. However, the assertion that Biden “stopped domestic drilling” is wrong on multiple levels, according to experts who study the oil industry. 

“The whole idea that Biden has reduced oil drilling or oil production is completely upside-down,” said Clark Williams-Derry, an energy finance analyst with the Institute for Energy Economics and Financial Analysis.

Walker’s campaign did not respond to inquiries for his article.

1. Biden never acted to end domestic drilling; he sought the more limited goal of pausing new leases to drill specifically on federal lands.

In an executive order issued about a week after taking office, Biden said his administration would “pause new oil and natural gas leases on public lands or in offshore waters,” pending a review of current policies, “including potential climate and other impacts.”

This order was far more limited than stopping all domestic drilling. It would not have blocked any drilling on private land, and it would not have stopped any drilling that stemmed from federal leases already in force.

“Stopping drilling on private lands was never on the table,” Williams-Derry said.

In fact, Biden couldn’t have stopped drilling on private lands even if he’d wanted to. 

“The federal government has no ability either to restrict or to mandate oil and gas drilling on private land,” Williams-Derry said. “Those decisions are made by private oil and gas companies, as regulated by states, not by the federal government.”

2. A court blocked Biden’s executive order.

Within six months, a federal judge in Louisiana blocked Biden’s order on federal leases, saying that Congress alone has the authority to pause oil and gas leasing. This put those leases back on track.

On April 15, 2022, the Interior Department announced its first onshore lease sale since Biden’s moratorium, involving about 144,000 acres for drilling. Nearly all of that — 132,000 acres — is in Wyoming, with the remainder in Utah, New Mexico, Colorado, Montana, North Dakota, Nevada and Oklahoma.

The Interior Department applied new standards in picking the sites for its auction. It aimed to cluster new wells close to existing drilling to reduce disruption on new lands and make full use of existing roads and other infrastructure. It estimated the greenhouse gas emissions that would come from the new wells. It also increased the royalty rate from 12.5% to 18.75%.

3. Even if the court had let Biden’s leasing pause stand, oil companies already have a backlog of more than 9,000 approved permits that they are not yet using.

From a federal regulatory standpoint, once a permit is approved, industry can proceed. But companies don’t have to immediately begin drilling, since their leases last 10 years and can be extended beyond that. 

Once a company has a lease in hand, it can take a while to start drilling, since companies have to contract rigs to drill the wells and build a sufficient inventory of permits before rigs are contracted, said Jennifer Pett, a spokesperson for the Independent Petroleum Association of America, a trade group representing oil and natural gas producers.

Because capital investments are involved, companies want to feel confident that their upront outlays will be paid back with sufficient revenues. In a sector with prices as volatile as energy, this sometimes leads them to adopt a wait-and-see attitude rather than jumping right in.

Still, it’s not as if private companies had nothing to work with. They were sitting on a lot of unused leases.

4. Oil production on federal lands has risen on Biden’s watch. 

The bottom line is that oil drilling on federal lands has expanded on Biden’s watch. The number of federal drilling permits granted hit a new high, for instance.

“Even as the administration attempted to pause issuing new leases, it continued to issue permits to drill on already-granted leases,” said Mark Finley, a fellow at Rice University’s Center for Energy Studies.

 

 

Production on federal lands has risen as well.

 

5. Under Biden, overall domestic oil production in 2021 came close to a record high.

Beyond federal lands, domestic oil production has risen overall as well. Production under Biden has exceeded that in two of the four years under President Donald Trump. And the Energy Department’s official projection for 2023 shows domestic oil production hitting a new high.

 

6. The number of oil rigs in use domestically has risen steadily on Biden’s watch, following a low point during the coronavirus pandemic.

Another measure of drilling intensity — the number of oil rigs in use — has risen consistently on Biden’s watch.

 

That said, oil rig counts have not quite caught up to the number in use prior to the pandemic. They are also well below the highs of 2014.

There’s a reason for that, said ​​Hugh Daigle, associate professor at the University of Texas’ Hildebrand Department of Petroleum and Geosystems Engineering.

“Wall Street and other investors are looking for producers to be more disciplined with their capital expenditures to give a better return on investment,” Daigle said. “Unless investors see a long-term case for high commodity prices and robust demand, this situation will probably not change in the near term.”

As with much else involving the private-sector oil industry, Biden’s ability to change this situation is limited.

“Streamlining the permitting process and helping alleviate supply chain bottlenecks could help, but this would only make a small difference” in alleviating high gasoline prices, Daigle said. “Releases from the Strategic Petroleum Reserve similarly help the global market, but only by a little due to the relatively small volumes compared to global demand.”

Our rating

Walker tweeted that Biden “stopped domestic drilling” for oil, driving gasoline prices higher.

This is wrong on many levels. Biden never sought to bar all domestic drilling. He did try to pause future leasing on federal lands, but this was blocked in court. And even if it had been allowed to proceed, Biden’s plan wouldn’t have affected drilling on private lands, nor would it have impacted the use of existing leases on federal lands, of which there are some 9,000 that companies are sitting on without initiating drilling.

In fact, oil production has risen under Biden, both on federal lands and on U.S. lands overall.

We rate the statement False.

Source: PolitiFact.

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