Biden fast-tracks shift from fossil fuels
Spate of executive orders has Texas lawmakers urging ‘thoughtful’ change
WASHINGTON — President Joe Biden began shifting the United States from fossil fuels through a series of executive orders Wednesday, carrying through on a campaign promise to fight climate change while protecting the economies of states such as Texas that have delivered the nation’s energy supply for more than a century.
In doing so, he is putting to the test a notion championed by Democrats and climate advocates that hundreds of thousands of jobs in U.S. oil fields and coal mines can be replaced by new industries building electric cars, installing solar panels and developing technologies needed to transform the global economy to clean energy.
Biden on Wednesday ordered a one-year moratorium on new leasing for fossil fuel extraction from federal lands and waters — including the Gulf of Mexico — while directing federal agencies to buy Americanmade zero-emissions vehicles and stop purchasing electricity generated from coal, oil and natural gas.
He also ordered federal agencies “to eliminate fossil fuel subsidies as consistent with applicable law.” It’s unclear which subsidies would be affected since many of the industry’s tax breaks were approved by Congress and would require legislation to repeal them.
In the short term, those moves are likely to only shift energy use around the margins. But in the long run, they signal a larger shift that threatens to disrupt businesses and lives in places such as Houston — the so-called “energy capital of the world.”
Testifying before the Senate Energy and Natural Resources Committee Wednesday, Jennifer Granholm, the former Michigan gover
nor who is Biden’s pick to lead the Department of Energy, pledged the new administration would leave no American energy workers behind in shifting the economy to clean energy. She described a “SWAT team inside the federal government focused on communities that have powered America.”
“The president’s plan on building back better would create more jobs in clean energy than the jobs that might be sacrificed,” she said. “The moratorium on public lands, I know, for those states that have those jobs in abundance, is something we’re going to have to work on.”
The executive order regarding federal lands and waters drew immediate backlash from Republicans and the oil and gas industry. They argued that the moratorium would not only result in massive job losses, but also force the United States to import more oil from abroad, going against decades of U.S. policy seeking energy independence from the Middle East.
More than 20 percent of the nation’s oil production comes from federal lands and waters.
For now, the order is unlikely to have much effect on production, as it still allows the Department of Interior to issue permits for drilling and mining and companies have been buying up leases at a heightened pace in expectation of a ban. But as leases expire over the next few years, production will decline and tens of thousands of jobs will be lost in the Gulf of Mexico alone, said Erik Milito, president of the National Ocean Industries Association.
“You can’t replace jobs along the Gulf Coast with jobs in Nevada and Massachusetts installing solar panels,” he said. “(Offshore drilling) is a very niche market, with people working in jobs like roustabouts and tool pushers. They trained and live on the Gulf Coast, in some cases with families working for generations in this business.”
In Texas, which has little federal land, the consequences are likely to be less severe than other oil and gas states, such as New Mexico and Wyoming. Still, the state’s oil and gas companies — many of which drill in the New Mexico portion of the Permian Basin — were irate at the prospect of having drilling opportunities restrained.
“Families’ lives in Texas have been dramatically improved by oil and gas,” said Todd Staples, president of the Texas Oil and Gas Association. “We understand society has concerns about the climate, but our energy choices do not have to be an either/or.”
Even some members of Biden’s own party are pushing back, with a group of four Texas Democrats including Rep. Lizzie Fletcher, of Houston and Rep. Henry Cuellar, of Laredo, calling on Biden to rescind the federal leasing order and work with them to develop a “thoughtful policy that addresses climate change, protects American jobs and moves us forward.”
For Biden, who has pledged to listen to scientists regardless of political consequence, reducing the nation’s emissions to net zero by mid-century is not a choice, but rather a necessity to avoid the worst consequences of climate change.
A longtime champion of American workers — often to the criticism of climate advocates who argued he was not committed to the cause — Biden has won endorsements from unions such as the AFL-CIO on promises to protect American workers through the energy transition.
“In my view, we’ve already waited too long to deal with this climate crisis. We can’t wait any longer,” Biden said at the White House Wednesday. “We’re talking about national security, about America leading the world in a clean energy future. It’s a future of enormous hope and opportunity.”
In Houston, as in many cities in Texas, Oklahoma, Louisiana and Wyoming, the economy has long centered around oil and gas. But even before Biden’s victory in November, efforts were underway in Houston to begin a transition towards clean energy.
Later this year, the Massachusetts firm Greentown Labs is set to open its second clean energy incubator in Houston, with backing from oil majors Chevron and Royal Dutch Shell and the power company NRG Energy. Rice University has launched a climate accelerator out of its new ION building in downtown Houston, with financial backers including Exxon Mobil, BP and the Houston oil field services company Halliburton.
The concept is to transfer the expertise of the oil and gas and power industries and apply it to developing and managing new forms of energy, from low-carbon fuels such as hydrogen to offshore wind farms.
“The energy industry is always changing. It’s been happening since we went from wood to coal and coal to oil,” said Michael Webber, a professor at the University of Texas. “Who knows how to do hydrogen? The oil and gas industry. Who knows how to do offshore wind? The oil and gas industry has critical skills that are going to be needed as the energy sector transition.”
But with companies around the globe vying for a piece of a clean energy sector anticipated to be worth more than $20 trillion a year by 2040, competition will be fierce. So far, China has dominated the clean energy industry, manufacturing most of the world’s solar panels and moving briskly to do the same with electric vehicles and batteries.
While some Texas companies and workers might transition to a new clean energy industry, many likely will not, said Peter Rodriguez, an economist and dean of Rice University’s Jones Graduate School of Business.
“Over the long run its possible you can have more or as many jobs involved with clean energy and environmental mitigation as you do oil and gas. But usually those transitions aren’t clean or easy,” he said. “If you think about what happened to North Carolina and its textile mills when (the United States) opened up global trade you saw a lot of displacement. A lot of people didn’t move over from the textile mills.”
The more immediate question facing the Biden administration as it seeks to cut greenhouse gas emissions is its authority to do so.
Within hours of the executive orders announcement, the trade group Western Energy Alliance filed a lawsuit in a Wyoming federal court claiming Biden does not have the authority to put a moratorium on federal leasing.
While that is a matter of dispute, even some environmental attorneys agree that federal law does not allow a president to permanently ban leasing, as Biden has signaled he plans to do once his government has completed its review of fossil fuel production on federal lands.
In that case, Biden would need to convince Congress to change the law, which, with the Republicans holding 50 seats in the Senate, seems nearly impossible.
Even were Democrats to do away with the rule requiring 60 votes on such legislation, several of their members in the Senate represent states with large fossil fuel industries, including Sen. Joe Manchin, of West Virginia where coal and natural gas dominate, Manchin will soon become chairman of the Senate Energy Committee, giving him power over what legislation moves to the Senate floor for a vote.
With COVID-19 keeping many Americans out of work, those politicians could be hard pressed to do anything that would further deplete jobs in their states.
“Now is not the time to jeopardize American jobs, or the critical tax and royalty revenues that federal leases generate for local, state, and federal government that need funds now,” the Texas Democratic Congress members said in their letter to Biden Wednesday.