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Biden to pause oil and gas leases, cut subsidies in climate action

by Reuters
Wednesday, 27 January 2021 18:35 GMT

U.S. President Joe Biden delivers remarks on tackling climate change prior to signing executive actions in the State Dining Room at the White House in Washington, U.S., January 27, 2021. REUTERS/Kevin Lamarque

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By Valerie Volcovici and Jeff Mason

WASHINGTON, Jan 27 (Reuters) - President Joe Biden was set on Wednesday to sign executive actions to combat climate change, including pausing new oil and gas leases on federal land and cutting fossil fuel subsidies as he pursues green policies in stark contrast to those of his predecessor Donald Trump.

The orders map out the direction for the Democratic president's climate change and environmental agenda and mark a reversal from Trump, a Republican businessman-turned-politician who sought to maximize U.S. oil, gas and coal output by removing regulations and easing environmental reviews.

"The stakes on climate change just simply couldn't be any higher than they are right now," U.S. special climate envoy John Kerry told a White House briefing. "It is existential."

Biden's focus on climate change has cheered international partners and environmental advocates, but upset Big Oil, which argues that the moves will cost the United States millions of jobs and billions of dollars in revenue at a time when the U.S. economy has been battered by the COVID-19 pandemic.

Kerry said the United States plans to announce before an international climate summit that Biden will host on Earth Day April 22 a reduction target by percentage for reducing its so-called greenhouse gas emissions by 2030 under the Paris climate accord that Trump had abandoned but Biden rejoined last week.

China leads the world and the United States is second in such emissions, which scientists link to a warming climate. Kerry indicated the United States would work with China but would not trade other pressing concerns to make climate progress.

The White House said Biden will direct the Interior Department to pause new federal oil and gas leases on public lands or offshore waters "to the extent possible" and review the program's climate impacts and taxpayer benefits. The pause will not restrict energy activities on lands that the government holds in trust for Native American tribes, it added.

Biden will call for a "rigorous review" during the pause of all existing leasing and permitting practices related to fossil fuel development on public lands and waters, the White House said. Biden also will set a goal to conserve 30% of federal land and waters to protect wildlife by 2030 and seek to double renewable energy production from offshore wind, also by 2030.

The orders will impact large swathes of land onshore in mostly Western states, as well as offshore drilling acreage located mainly in the U.S. Gulf of Mexico, which combined make up about a quarter of the nation's oil and gas supply. Word of the measure has drawn criticism from some states that depend on drilling revenue.

Biden will also direct federal agencies to "eliminate fossil fuel subsidies as consistent with applicable law," according to a White House fact sheet. It was not clear which subsidies could be stripped away under this order, given many of the industry's tax breaks are congressionally approved.

Another order establishes climate considerations as an essential element of U.S. foreign policy and national security.

'A STRATEGIC ENGINE'

John Hess, CEO of energy company Hess Corp, said the Biden administration must keep in mind the impacts of its climate change agenda on jobs and energy security.

"They have to realize that oil and gas are a strategic engine for the U.S. economy," Hess told Wall Street analysts.

Abraxas Petroleum CEO Bob Watson separately told Reuters, "In my many years in this business, this is the worst downturn I have lived through, and this is not going to help a recovery. There's still going to be demand for oil and gas for my lifetime, anyway, and I'm just worried about the impact it will have on the broader economy."

Kerry rebutted the stance by oil industry groups and some Republican lawmakers that greening the U.S. economy and shifting away from fossil fuels would harm workers.

Biden also faces pressure from liberals in his own party for aggressive action to address climate change. Senate Majority Leader Chuck Schumer on Wednesday called on Biden to declare a national emergency on climate change, calling such a move "a giant step in the right direction" that would let the president tap additional resources to achieve his goals.

Biden's new orders include the creation of new climate change positions and an inter-agency task force within his administration, and measures to boost federal procurement of U.S.-sourced clean energy and vehicles, protect scientists from political interference, and assist communities most affected by industrial pollution.

(Reporting by Valerie Volcovici and Jeff Mason in Washington; Additional reporting by Timothy Gardner, Makini Brice and Lisa Lambert in Washington, Gary McWilliams in Houston and Jessica Resnick-Ault in New York; Writing by Will Dunham; Editing by Richard Valdmanis, Chizu Nomiyama and Lisa Shumaker)

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