January 26, 2021

Biden Resurrects Failed Obama Energy Strategy


  • Revoking the permit for the Keystone XL pipeline will affect thousands of American jobs and strain relations with Canada.
  • Reentering the Paris climate agreement is a bad deal for the United States because it puts America at a competitive disadvantage to other countries.
  • The Biden administration is reviewing dozens of energy-related rules, setting the stage for future failures.

On January 20, hours after swearing his oath of office, President Biden took unilateral action to rescind a presidential permit for the Keystone XL pipeline and rejoin the Paris climate agreement. He also directed his administration to review dozens of rules, including many aimed at harnessing American energy and reducing onerous regulations.

A week later, the president issued a sweeping executive order that will increase regulation and stifle American energy production. Leader McConnell has said President Biden’s action represents a “piecemeal Green New Deal.”

The president’s actions will raise energy prices, destroy American jobs, and hurt our country’s competitiveness. These actions come at a time when the United States is facing a global pandemic and subsequent economic squeeze. They also signal the Biden administration will reboot the failed energy policies of the Obama administration.

Keystone XL Pipeline

The Keystone XL pipeline project seeks to transport an estimated 830,000 barrels per day of crude oil from Alberta Canada to Nebraska. From there, the oil would be transported on to the Gulf Coast through other pipelines. Moving this volume of crude oil by rail would require 4.3 million train cars annually.

For years, the Keystone XL pipeline project was held up by the Obama administration, aided by Democrats in Congress. In January 2014, the Obama State Department issued a final environmental impact statement for the project, finding the pipeline would have no significant impact. In early 2015, Congress supported the project on a bipartisan basis through legislation, which President Obama then vetoed. Ultimately, President Obama denied a permit for the project in November 2015. President Trump approved a permit in July 2020.

On President Biden’s first day in office, he took executive action to revoke the presidential permit required for the pipeline. The move was decried by unions and apparently was done without consulting our Canadian allies, who have supported the project. As a result of President Biden’s action, the pipeline’s owner, TC Energy, said it would cease construction and lay off more than a thousand workers. In October, the company had awarded six contracts to facilitate the hiring of an estimated 7,000 union workers for construction in 2021, and it estimated the project would require 11,000 American workers this year. The company had pledged $1.7 billion in investments along the pipeline, including in renewable energy to achieve net zero emissions from the operation of the pipeline itself.

Paris Climate Agreement

In 2015, President Obama joined the Paris climate agreement, skirting the Senate’s advice and consent required for treaties by claiming its goals are not legally binding. Commitments stemming from the Paris agreement will have a broad effect across our economy, particularly on the industrial sector. Previous analysis had found that the Obama administration’s Paris emissions pledge would cost trillions of dollars and cause the loss of millions of jobs. The agreement also obligates the U.S. to send billions of dollars to developing countries for climate mitigation assistance – which the Biden administration’s climate envoy, John Kerry, has promised to deliver.

For these and other reasons, the United States formally withdrew from the agreement in November 2020. President Biden unilaterally recommitted the United States to this flawed agreement within hours of taking office.

The lopsided commitments by countries under the agreement hurt America’s competitiveness by allowing our adversaries to increase emissions while we place extensive restrictions on ourselves. The Obama administration had originally pledged to reduce greenhouse gas emissions by as much as 28% by 2025. Meanwhile, other large emitters were getting away with business as usual.

Under Russia’s pledge, for instance, it is allowed to increase emissions through 2030. China did not commit to reducing its emissions before 2030, and it is expected to remain the world’s leading emitter of energy-related carbon dioxide through 2050. China reportedly plans to build coal-burning power plants accounting for more than 200 gigawatts – virtually equal to the current capacity of all coal-based plants operating in the U.S. Coal will play a central role in China’s economic response to the COVID-19 pandemic.

While Russia and China plan to increase emissions until 2030, our emissions continue to fall. In 2019, CO2 emissions were about 14% below where they were in 2005, and the Energy Information Administration has forecast further declines until 2030. Since we are already reducing emissions responsibly, it makes no sense to reenter an agreement that puts unreasonable limits on the United States.

The Obama administration hampered America’s recovery from recession by saddling the economy with regulations and restrictions while our competitors did nothing. When some of those restrictions were lifted, the economy thrived before the pandemic. Now President Biden is stubbornly repeating the mistakes of the past. His resurrection of failed energy policies will hold back America’s economic recovery and will not end climate change.

Banning New Oil and Gas Leases on Public Lands and Federal Waters

A third executive order, signed on January 27, requires the Department of the Interior to pause new leases for oil and gas production on public lands and offshore waters. According to the American Petroleum Institute, 22% of oil and 12% of natural gas production occurred on federal lands in 2019. API estimates that, of all production on federal lands and waters, 71.5% of oil and 24.3% of natural gas production occurred offshore.

President Biden spoke on Wednesday about how his administration’s new approach would create millions of good-paying union jobs. But one analysis found that a ban on energy production on federal lands and waters could result in an estimated one million jobs lost by 2022 and that by 2030 U.S. GDP could be slashed by a cumulative $700 billion.

The same analysis suggested a ban could mean the U.S. would need to import an additional 2 million barrels of foreign oil per day. Energy independence is imperative from security and economic perspectives. According to the Energy Information Administration, the U.S. became a net total energy exporter in 2019, a feat last achieved in 1952, and our crude oil net imports were at the lowest level since the mid-1980s. President Biden’s action will not negate our need for traditional energy sources. On the contrary, it will likely mean we need to import these sources from often hostile regimes where labor and environmental laws are lax compared to the U.S. We are simply exporting these jobs to places like China, Russia, Venezuela, the Middle East and Africa. We are not decreasing greenhouse gas emissions, we are simply shipping them overseas. 

Revenues generated by offshore drilling leases account for the majority of funding for the Land and Water Conservation Fund, which helps preserve outdoor spaces and bolster recreation opportunities. The National Parks and Public Land Legacy Restoration Fund – which will help address the nearly $20 billion maintenance backlog on our federal lands – also receives funding from energy development on public lands. A ban on new leases could affect revenues for these programs in the future. About half of oil and gas revenues are paid to the states, which use the funding for K-12 education and other basic services. In New Mexico for example, almost 40% of the state budget comes from oil and gas revenues. 

Issue Tag: Energy