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Washington Watch: Biden to resume federal oil and gas development under stricter rules as ‘social cost of carbon’ is battled in court

The Biden administration late Friday said it would resume plans for oil and gas development on federal lands after another court maneuver — this one in its favor. It’s the latest in a series of stops and starts for this portion of the president’s cleaner energy and climate-change agenda.

Biden had campaigned on no new federal-land drilling, then at times softened that stance, in part because Republican-led states vowed court challenges. More recently, the administration looked to toughen how it measures the potential damage from greenhouse gas emissions when creating rules for drillers and other polluting industries, which would give it more control over such development on federal lands.

Drilling on public lands represents 7% of domestically produced oil

and 8% of domestically produced natural gas. In 2019, fossil fuels were the source of about 74% of total U.S. human-caused greenhouse gas emissions. 

The Interior Department had said it would delay upcoming federal oil and gas lease sales because a Louisiana federal judge blocked the administration from using its higher “social cost of carbon” to factor the risks of climate change into decisions on permitting, investment and regulation. Then last week, a federal appeals court revived the administration’s effort for tougher hurdles for the industry.

Interior, at least temporarily, will place the social value at around $51 per ton of greenhouse gases emitted, the Obama-era value that Biden had matched. It is far higher than the roughly $10 a ton imposed by the Trump administration, early last year.

The Louisiana federal judge had ruled this price would bring costly regulatory burdens and drive up energy prices
Energy prices are already trading at multi-year highs as the Russian-Ukraine crisis stretches beyond its first month.

A panel of 5th U.S. Circuit Court of Appeals judges in New Orleans unanimously stayed the lower court, meaning the administration can continue using the policy while the case goes on.

Biden has turned to regulation and a whole-of-government approach, including through executive orders, to push the nation toward halving its emissions by the end of the decade. For instance, the SEC on Monday took a closer step toward enforcing tougher disclosure in the stock market to climate-change contributions and risk. Infrastructure spending passed last year has focused on some climate-change fixes, but broader legislative efforts, like incentivizing electric vehicles and home solar, have met with roadblocks.

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