The Biden administration last week canceled a large oil and gas lease sale — over 1 million acres — in the Alaska Cook Inlet as well as two sales in the Gulf of Mexico. The Interior Department argued that the Alaska cancellation was “due to lack of industry interest in leasing in the area,” but that is obvious balderdash, as “industry interest” cannot be measured until the extent and value of the actual bids are made clear.
Could that asserted “lack of industry interest” have anything to do with the larger context of official hostility to investment in fossil-fuel discovery, production, and such ancillary infrastructure development as pipeline expansion and modernization? For oil and gas producers to lack interest despite high prices is the opposite of what elementary economics would predict, so it’s reasonable to wonder why.
For the Gulf leases, the Interior Department said it was halting them due to “conflicting court rulings that impacted work on these proposed lease sales.” Those court rulings might have something to do with the administration’s foot dragging on implementation of its legal obligations to conduct such lease sales, along with its not-very-subtle encouragement of litigation by the environmental Left against specific lease sales. A Justice Department lawyer was rather more candid before a panel of the Fifth Circuit Court of Appeals: The interior secretary “may reduce or cancel lease offerings on account of climate change.”
The administration is arguing that the National Environmental Policy Act provides authority for the cancellation of lease sales on grounds of climate change. That premise must be based upon an implicit argument that the lease sales would have some nontrivial impact on anthropogenic climate change, assumed to be both adverse and sufficient in magnitude to exceed the increase in national wealth attendant upon production of fossil-fuel resources. Deep skepticism that the administration actually has conducted any such climate analysis would be wholly justified; after all, had the bureaucrats done so, the administration would have publicized the likely misleading “findings.”
Instead, it would be a vast understatement to observe that “climate change” has become the default excuse for any number of adverse events — no further explanations needed — including many unrelated to climate phenomena. It also is the go-to rationale for the administration’s perverse ideological opposition to fossil fuels generally, and its various policy stances in pursuit of the Biden net-zero greenhouse gas (GHG) emissions goal. That objective is impossible simply as a matter of engineering, even apart from the staggering costs of pursuing it.
But never mind. Let us examine the “climate change” rationale for the cancellation of the Alaska and Gulf lease sales.
In 2019, total (not merely from federal leases) U.S. onshore and offshore oil and gas systems — production, gathering, boosting, transport, processing, distribution, etc. — resulted in GHG emissions of 347 million metric tons (CO2 equivalent). Crude oil and natural gas production from federal leases are, respectively, roughly 25 percent and 13 percent of total U.S. production. For purposes of discussion, let’s assume the higher number: Oil and gas production from federal leases are responsible for 25 percent of total fossil systems GHG emissions. That works out to about 87 million metric tons.
Total U.S. GHG emissions in 2019 were about 6.6 billion metric tons. (Global GHG emissions were about 52.4 billion metric tons.) If we apply the Environmental Protection Agency climate model under a set of assumptions that exaggerate the future temperature effects of reductions in GHG emissions, the Biden administration’s full net-zero policy would reduce global temperatures in 2100 by 0.173 degrees Celsius.
So, as a rough approximation, an end to oil and gas production on all federal leases — not merely the Alaska and Gulf lease sales just canceled — would reduce global temperatures in 2100 by 0.0023 degrees Celsius. The standard deviation of the surface temperature record is nearly 50 times greater than that, at 0.11 degrees Celsius.
Suppose that the Alaska and Gulf lease sales just canceled would have increased oil and gas production from all federal leases by 10 percent, a wildly optimistic assumption. The Alaska and Gulf cancellation will reduce global temperatures in 2100, again roughly, by 23 one-hundred thousandths of a degree Celsius.
One might hope that the Fifth Circuit panel would ask the central cost-benefit question: Does canceling these leases actually make a dent in climate change, and if so, is it worth the cost? But that is unlikely. It’s not just the judges, either. The journalists and the pundits and the politicians and the ideologues and the masses of useful idiots almost never do. Nor does the climate “crisis” argument rescue such proposals, because there is no evidence — none — in support of it.
Here is the same analysis applied to various international policies. The Paris agreement, if it is to be taken seriously (it is not): 0.178 degrees Celsius. A 50 percent cut in GHG emissions by China: 0.184 degrees Celsius. A 50 percent cut by the OECD: 0.27 degrees Celsius. A global cut of 75 percent: 0.54 degrees Celsius.
In a world in which conventional energy has served to lift billions out of grinding poverty, how plausible are the policies that would yield such outcomes? The more central question that the proponents of climate policies should be asked every day: How much economic suffering would justify them?