Joe Biden will order a suspension of new federal leasing for fossil fuel development and review how permits and leases were handed out under the Trump administration, in a series of executive actions aimed at sparking a clean energy revolution in the US.
In an executive order to be signed on Wednesday, Mr Biden directs the secretary of interior to “pause” new leasing “to the extent possible” and conduct a “rigorous review” of existing fossil fuel leasing and permitting practices.
The move stops well short of ordering an outright ban on drilling or fracking on federal lands.
The White House said Mr Biden was following through on his “promise to take aggressive action to tackle climate change”, with the orders coming on what it had earmarked as “climate day”.
The president will also direct government agencies to procure America-made zero-emissions vehicles for their fleets, in line with Mr Biden’s Buy American order, and inform the director of national intelligence to prepare an estimate on the security implications of climate change.
It also commits to new conservation goals, the establishment of a civilian “climate corps”, and new efforts to revitalise communities reliant on oil, gas and coal.
Mr Biden will also direct federal agencies to “eliminate fossil fuel subsidies as consistent with applicable law” — although legal experts said this would be difficult.
“The president cannot unilaterally alter the statutes on the books or erase those fossil fuel subsidies Congress has written into law,” said Jonathan Adler, a professor of environmental law at Case Western Reserve University, in Ohio. “As with everything else the Biden administration wants to do on climate, truly meaningful change will require action by Congress.”
The suspension of leasing by oil and gas companies on federal lands fulfils a big election pledge by the president and marks his most significant move against the sector after he campaigned on a “transition away from oil”.
It marks a stark departure from the previous administration. While Mr Trump sought to roll back restrictions on oil and gas producers, Mr Biden put tackling climate change at the heart of his White House bid.
On his first day in office, Mr Biden took steps to rejoin the Paris climate agreement and scrapped a permit for the controversial Keystone XL oil pipeline.
Wednesday’s order will apply specifically to federally held lands and waters, which account for about 22 per cent of American oil production, with the bulk coming from offshore wells in the Gulf of Mexico. It does not affect activity on private land, which accounts for most US oil and output.
Some industry analysts played down the significance of the leasing suspension, saying the decision not to include new permits in the ban would damp some of the fallout in states such as New Mexico, where federal lands and waters account for much oil production.
“Biden’s administration now better understands the magnitude of implications for New Mexico,” said Artem Abramov, head of shale research at Rystad Energy.
Rob Black, president of the New Mexico Chamber of Commerce, disagreed, predicting ahead of the order that the economic impact on the state would be “devastating” and that production would simply move elsewhere.
“We don’t believe a ban on federal oil and gas leases will actually help reduce carbon emissions,” said Mr Black. “What it will do is shift what would have been federal and state tax revenues to private landholders in Texas, and to other countries like Saudi Arabia, Russia and Iran.”
Any effect on overall US oil and gas production from the new leasing suspension was likely to be felt only in a couple of years, said analysts, as many operators had stocked up on leases and permits in anticipation of the decision. The move could even fuel a temporary rush to deploy rigs as operators scrambled to make use of existing permits.
“We expect a surge of drilling and completions activity on federal lands in the coming months, as operators attempt to drill as many of their permits as possible before they expire,” said Parker Fawcett, an analyst at S&P Global Platts.
After a two-year period of heightened activity on federal lands, output would begin to slide, added Mr Fawcett.
Wednesday’s executive order follows a 60-day freeze on new activity mandated as a stopgap by the interior department the day after Mr Biden took office.