Biden Administration Policy Review

Federal Oil and Gas under the Biden Administration

During the four years of the Biden administration, major changes were made to the federal oil and gas leasing program, in a concerted effort to diminish that program by making federal leasing both more difficult and more expensive:

Executive Order 14008. First and foremost was the “Executive Order on Tackling the Climate Crisis at Home and Abroad” that was issued by President Biden on January 27, 2021. Most importantly, among the numerous actions directed by that order, the Secretary of the Interior, to the extent consistent with applicable law, was to “pause new oil and natural gas leases on public lands or in offshore waters pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices,” and to “consider whether to adjust royalties associated with coal, oil, and gas resources extracted from public lands and offshore waters, or take other appropriate action, to account for corresponding climate costs.” (Note: Executive Order 14008 has now been revoked by Executive Order 14148, issued by President Trump on January 20, 2025.)

Instruction Memorandum No. 2021-027 was issued by BLM on April 20, 2021. This IM updated BLM’s policies for the review of parcels for inclusion in competitive oil and gas lease sales. The Trump administration, in 2018, had issued IM No. 2018-034 to streamline the parcel review process, which set a target for parcels to be offered for competitive bidding within six months from when the lands were nominated. That target (a worthy goal, though seldom if ever met) was a response to the extensive delays in parcel reviews that had developed in the preceding years. IM No. 2018-034 was superseded by the new Biden administration IM, which established 30-day public review and comment periods for either a Determination of NEPA Adequacy or an environmental assessment during the parcel review, as well as a 30-day protest period from the posting of a lease sale notice. The new IM found a middle ground between the Trump administration process and the more-burdensome process that had been developed under the Obama administration, expressly declining to reinstate the use of Master Leasing Plans as an added layer of the process. IM No. 2021-027 also directed that BLM’s lease parcel reviews are to be conducted simultaneously with environmental reviews, rather than having one await the completion of the other; it affirmed that BLM will not routinely defer leasing while awaiting an amendment to a resource management plan; and it disfavored site visits as an extra step in the review process.

Report on the Federal Oil and Gas Leasing Program. On November 26, 2021, the Interior Department issued its report in response to Executive Order 14008 of January 27. The report’s introduction summarized its findings, which — as repeatedly telegraphed by the Department’s press releases in the meantime — were a litany of predetermined conclusions: “The review found a Federal oil and gas program that fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers; inadequately accounts for environmental harms to lands, waters, and other resources; fosters speculation by oil and gas companies to the detriment of competition and American consumers; extends leasing into low potential lands that may have competing higher value uses; and leaves communities out of important conversations about how they want their public lands and waters managed.” To address these asserted shortcomings, the report recommended a number of actions that the Department could take, as well as encouraging Congress to take some further actions. Specific recommendations in the report included:

Royalties — “The BLM should begin to adjust royalties for competitive leases offered in individual lease sales and initiate a rulemaking to establish a higher minimum royalty for onshore oil and gas leases. The BLM also should consider limiting discretionary royalty relief . . . while it updates its current royalty relief guidance and reassesses the economic assumptions used during royalty relief application evaluations.”
Bonus Bids — “The BLM should initiate rulemaking to increase the minimum bid to discourage speculators and to provide a better return to the taxpayer.”
Rental Rates — “The BLM should initiate a rulemaking in order to increase rental rates for future lease sales.”
Bonding — “The BLM should increase minimum bond amounts and set appropriate levels taking into consideration changes in technology, the complexity and depth of modern wells, inflation, and the risk of abandonment. While such regulations are being developed, BLM should adjust bonds for individual, high risk leases through adequacy reviews and when leases are reinstated or applications for permits to drill are extended.”
Planning — “As an overarching policy, BLM should ensure that oil and gas is not prioritized over other land uses, consistent with BLM’s mandate of multiple-use and sustained yield. The BLM should carefully consider what lands make the most sense to lease in terms of expected yields of oil and gas, prospects of earning a fair return for U.S. taxpayers, and conflicts with other uses, such as outdoor recreation and wildlife habitat.”
Low-Potential Lands — “The BLM should evaluate operational adjustments to its leasing program that will avoid nomination or leasing of low potential lands and instead focus on areas that have moderate or high potential for oil and gas resources and which are in proximity to existing oil and gas infrastructure.”
Bidding Requirements — “The BLM should consider reforms that ensure that bidders — and any subsequent proposed leaseholders or operators — are publicly identified and technically qualified to develop leases.”

Litigation was filed in response to the leasing “pause” that was imposed by Executive Order 14008, including cases in the U.S. District Courts for the District of Wyoming, the Western District of Louisiana, and the District of North Dakota. On June 15, 2021, the Louisiana court, in State of Louisiana v. Biden, granted a nationwide preliminary injunction against implementation of the leasing pause. The Interior Department appealed the preliminary injunction to the U.S. Court of Appeals for the 5th Circuit; but the Department stated that it would comply with the court’s directive and resume leasing while the appeal was pending.

Compliance with the preliminary injunction took ten months, with BLM finally issuing notices of competitive lease sales (to be held by BLM’s Colorado, Montana-Dakotas, Nevada, New Mexico, Utah, and Wyoming offices) in April 2022. And by that time, BLM’s review process — under new policy guidance to avoid offering lands with “potential conflicts with other resources,” “low potential lands,” and lands that are not “near areas with existing development” — had led to a drastic reduction in the number of parcels being considered, with a BLM press release of April 15 being able to boast of “an 80 percent reduction from the acreage originally nominated.”

On August 17, 2022, the preliminary injunction that the District Court had issued in the State of Louisiana case was vacated by the U.S. Court of Appeals for the 5th Circuit. The Court of Appeals’ decision did not address the merits of the injunction, but instead remanded the case to the District Court based on a finding that the preliminary injunction had failed to sufficiently specify the conduct that was being enjoined. The following day, however, the U.S. District Court in Louisiana issued a permanent injunction against the federal government’s implementation of “a Stop, referred to in Executive Order 14008 as a Pause, on new oil and gas leases on public lands and in offshore waters, as set forth in Section 208 of Executive Order 14008, as to all ‘eligible’ lands both onshore and offshore.” The court found the pause to be a violation of the requirement to conduct lease sales under the Mineral Leasing Act and the Outer Continental Shelf Lands Act. (Addressing the Court of Appeals’ objection to the District Court’s previous ruling, the District Court specified that the Stop, or Pause, that was being enjoined was “the cessation of the leasing process of eligible federal lands” pursuant to the Executive Order.) The applicability of the permanent injunction was limited, however, to federal actions in those states that were parties to the case: Louisiana, Alabama, Alaska, Arkansas, Georgia, Mississippi, Missouri, Montana, Nebraska, Oklahoma, Texas, Utah, and West Virginia; and the court’s order also was only applicable to federal actions taken on or before the date of filing of the case (March 24, 2021).

In the Wyoming litigation, meanwhile, the court on June 30, 2021, dismissed, without prejudice, the motion in Western Energy Alliance v. Biden for a preliminary injunction, as being mooted by issuance of the nationwide preliminary injunction in the Louisiana litigation. The Wyoming court stated that the motion could be renewed if the preliminary injunction in Louisiana “is vacated, withdrawn, or otherwise altered in a material manner.” On September 2, 2022, however, that court issued a decision on the merits of the case, ruling in the government’s favor on the leasing pause. The decision was narrow in scope, though. The court, first of all, threw out all challenges to agency actions that took place after the lawsuits were filed — i.e., anything other than BLM’s failure to hold first-quarter 2021 sales. The court then rejected the challenge to those sales based on evidence that, irrespective of the leasing pause, BLM’s failure to hold those sales could be justified by a need for further environmental review of greenhouse gas impacts from the sales. Until that review was completed, the court concluded, BLM could properly find that the lands were not “available” to be offered in a lease sale. On December 1, 2022, the state of Wyoming filed an amended petition with the court, addressing the Interior Department’s failure to hold lease sales in Wyoming for the second and third quarters of 2021, and the third quarter of 2022, as well as “the Secretary’s adoption of an unwritten policy that stopped quarterly oil and gas leasing.” And on December 31, 2024, the court issued its decision in State of Wyoming v. U.S. Department of the Interior, concluding that the challenge to BLM’s failure to hold lease sales in the second and third quarters of 2021 must also be rejected, due to the continuing need to complete an updated environmental review; but that BLM’s failure to hold a Wyoming lease sale in the third quarter of 2022 (particularly after holding a sale in the preceding quarter) was “arbitrary and capricious and an abuse of discretion.” (Notably, in reference to the Mineral Leasing Act provision directing quarterly lease sales to be held “where eligible lands are available,” the court independently interpreted the terms “eligible” and “available,” in accordance with the Supreme Court’s recent Loper Bright decision, and concluded that “‘eligible’ lands are those that are not precluded from leasing by law and ‘available’ lands are those that have met all statutory requirements and reviews necessary to be leased.”)

The District Court in North Dakota, on March 27, 2023, issued a preliminary injunction in State of North Dakota v. U.S. Department of the Interior against the federal defendants’ implementation of the “Stop” — their “unlawful policy to disregard their statutory duty to appropriately plan for and complete their determination of whether nominated land was ‘available’ and ‘eligible’ on a timely, quarterly basis” — as to lands in North Dakota. The court — addressing the government’s varying asserted justifications for each quarter in which no lease sale of North Dakota lands was held (all four quarters of 2021; the first, third, and fourth quarter of 2022; and the first quarter of 2023) — distinguished “the Secretary’s discretionary decision to pick which Federal lands to lease” from “(1) the Federal Defendants’ requirement to timely complete the statutory analyses for determining which lands are ‘eligible’ and ‘available’ for leasing; and (2) the statutory mandate to hold a quarterly lease sale ‘for each State where eligible lands are available at least quarterly'” (emphasis added). (The court cited definitions that previously had been accepted by BLM for “eligible” and “available:” lands are “eligible” when they have not been “excluded from leasing by a statutory or regulatory prohibition;” and lands are “available” when they are “open to leasing in the applicable [RMP], and when all statutory requirements and reviews have been met, including compliance with [NEPA].”) Accordingly, the court determined, BLM had an obligation to plan ahead for the timely completion of NEPA reviews in order to maintain a quarterly lease sale schedule. The District Court’s decision was appealed to the U.S. Court of Appeals for the 8th Circuit; but on August 22 the court of appeals granted a motion by the appellants to dismiss the appeal, leaving the district court’s ruling in effect.

Further BLM leasing action. Following its second-quarter 2022 lease sales, BLM failed to hold any further lease sales until the second quarter of 2023, when limited numbers of parcels were offered by BLM’s New Mexico, Montana-Dakotas, and Eastern States offices, with somewhat more parcels offered in Wyoming. Third-quarter 2023 BLM lease sales were held by the Montana-Dakotas, Nevada, Wyoming, and Utah offices; and fourth-quarter sales for Montana-Dakotas, Nevada, New Mexico, Utah, and Wyoming — although very limited acreage was offered in most of these sales. For 2024, first-quarter lease sales were held by BLM’s Montana-Dakotas, Wyoming, and Eastern States offices; second-quarter sales by the Montana-Dakotas, Wyoming, Nevada, and New Mexico offices; third-quarter sales for Montana-Dakotas, New Mexico, Wyoming, and Colorado; and fourth-quarter sales for Montana-Dakotas, New Mexico, and Wyoming. Sales were held in the first quarter of 2025 by the Montana-Dakotas, New Mexico, Wyoming, and Nevada offices.

(One offshore lease sale was conducted by the Department following imposition of the leasing “pause,” on November 17, 2021, covering lands in the western Gulf of Mexico; but that sale then was invalidated by a January 27, 2022, decision of the U.S. District Court for the District of Columbia, in Friends of the Earth v. Haaland, requiring further analysis of the sale’s potential impact on greenhouse gas emissions. The Department then announced, on May 11, 2022, that the three remaining offshore lease sales that were to be held under the then-current five-year leasing plan would not take place at all. The status of those offshore sales, however, was altered by provisions of the Inflation Reduction Act of 2022 (see below), which directed the Secretary to issue leases for the tracts that were won in the November 2021 sale, and to conduct the other sales that had been scheduled.)

Inflation Reduction Act of 2022. The Biden administration, through the Inflation Reduction Act of August 16, 2022, was able to get Congress to write into law a number of the substantial changes to federal oil and gas leasing that the administration desired. For detailed information on the applicable provisions of the Act — as well as the series of Instruction Memoranda that were issued by BLM to provide revised leasing program guidance in the wake of the Act — click this link: Inflation Reduction Act.

Comprehensive revision of BLM’s oil and gas leasing regulations. A comprehensive revision of the leasing regulations was published by BLM, effective June 22, 2024, to more fully implement its agenda. See the Regulations page of this website, including the link on that page with a detailed analysis of the regulatory changes.