WASHINGTON — Few people seem happy with Interior Secretary Deb Haaland and her department’s management of energy resources on federal lands and waters. To this day, a particular focus of indignation is her handling of a December lease auction for oil extraction rights in Alaska’s Cook Inlet.
Progressives denounced the auction from the outset, saying it would damage a fragile watershed with vulnerable wildlife and violate President Joe Biden’s campaign promise to halt offshore leasing. Three environmental groups sued the federal government over the sale, and the litigation is still pending.
Then Republicans publicly accused Haaland this month of trying to sabotage the auction by charging the highest possible royalty rates to advance a “radical climate change agenda,” as Sen. Josh Hawley of Missouri put it at a May 2 hearing. The December auction drew a single bid amounting to $63,983.
The criticism from both sides highlights the tightrope that Haaland has been walking since she was appointed Interior secretary two years ago. The first Native American to be named to the post, she has increasingly become a lightning rod for the contradictions inherent in the Biden administration’s approach to energy projects on federal lands. Yet to some extent, much of that record is beyond her control.
To win passage of the Inflation Reduction Act, for example, with its groundbreaking embrace of clean energy targets, the administration agreed to a series of compromises benefiting fossil fuel interests. Among them was a requirement that the Cook Inlet lease auction be held by the end of 2022.
Critics on the left have since accused Haaland, who championed environmental justice as a congresswoman, of selling out to the oil and gas industry. Opponents on the right meanwhile insist that she is sneakily plotting to block oil and gas production on federal lands altogether.
“Cynicism links those criticisms, whether you’re doing it from the left or the right,” said Athan Manuel of the Sierra Club, who oversees the organization’s Lands Protection Program. “That’s the challenge. That’s the hard part about government.”
Allegations that the Interior Department is subverting the oil and gas industry were front and center at the May 2 hearing of the Senate Committee on Energy and Natural Resources. Citing the Cook Inlet lease terms, Hawley admonished the department for setting the highest possible royalty rates, which determine how much revenue from oil projects go to the federal government.
He appeared most upset with the department’s rationale for doing so.
In a November 2022 memo that it accidentally posted online, the department justified the rates as a surcharge to address the “serious challenges facing the nation from climate change and the impact of GHGs [greenhouse gases] from fossil fuels.”
Some climate advocates, meanwhile, were none too impressed with the calculus suggested by the memo.
“I think the administration wants pats on the back for doing very small things instead of doing the big sweeping changes that we need,” said Nicole Ghio, an anti-fossil fuel campaigner for Friends of the Earth.
Haaland Faces Down Her Critics
Haaland appeared before the Senate committee to discuss her agency’s $18.9 billion budget request for fiscal year 2024. The request, still awaiting approval, lists climate change action and strengthening tribal nations as top priorities.
The panel’s chairman, Sen. Joe Manchin of West Virginia, a conservative Democrat who has repeatedly bucked his party to defend the fossil fuel industry, questioned why the agency was requesting $2 billion more than it received last year. “I really look forward to hearing the justification for such a large increase on top of historic funding,” he said.
Haaland highlighted some of the reasons the department is seeking more money: to manage wildfires, adapt to climate change, staff national parks and improve the federal government’s relationship with Indian tribes.
Lawmakers asked very few questions about the budget after that. Instead, the hearing featured two hours of tense questioning about Haaland’s management of the Interior Department and its pace of approving new energy projects.
Manchin said the department was focusing too narrowly on renewable energy to meet U.S. energy goals. “I don’t know why we can’t agree that we need a balanced approach,” he said. “I will be watching extremely closely to ensure you faithfully execute the law as required.”
The committee chairman was referring to several oil and gas provisions of the Inflation Reduction Act. Last year Manchin was instrumental in negotiating fossil-fuel-friendly provisions in the law, like a requirement that auctions be held for onshore oil and gas leases on at least two million acres of federal land before any wind or solar leases are issued.
He and many congressional Republicans have described their national energy strategy as an “all of the above” mix that expands both fossil fuel and renewable energy production. Noting that the United States has fallen behind on its climate change targets, however, policy experts say that mandating the use of fossil fuels is incompatible with reducing greenhouse gas emissions to make the planet safer.
Like Hawley, Manchin has accused Haaland of adhering to a “radical climate agenda” in the handling of the Cook Inlet auction and has blasted the royalty rate decision as an attempt to deter bidders.
The Biden administration canceled a previous iteration of that auction in May 2022, citing a lack of industry interest. Hilcorp Alaska was the sole bidder in the revived auction in December, which resulted in a lease sale on one block of the 193 available.
Haaland defended her department’s actions on the Cook Inlet auction and on climate change in general. “What I can tell you is the royalty rate was the most reasonable value and was consistent with the IRA requirements,” she said, referring to the Inflation Reduction Act. “We are in the middle of a terrible climate crisis, and it is our job to balance those things, to create a balance on our public lands.”
Republicans repeatedly voiced concern about the department prioritizing renewable energy projects, and Haaland struggled to specify timelines. Answering a question from Sen. Martin Heinrich, a Democrat from New Mexico, about the Biden administration’s goal of installing 30 gigawatts of offshore wind energy by 2030, Haaland expressed optimism but demurred on specifics. She could not say when the first of those projects would reach the permitting stage.
A Mixed Record on Oil and Gas
Under Haaland’s leadership, the Interior Department’s record on approving oil and gas projects is mixed.
The number of permits approved during the Biden administration’s first two years outpaced those issued by the Trump administration during its first two years, according to an analysis by the Center for Biological Diversity. However, the average time it takes to complete those approvals has doubled since Haaland took office in March 2021.
The Inflation Reduction Act required three offshore auctions, including the Alaskan Cook Inlet lease sale. But the Interior Department has not sold new onshore rights for oil and gas extraction in over a year. A district court judge in North Dakota recently ordered the department to resume halted lease sales.
Sen. John Barrasso of Wyoming, the ranking Republican on the committee, faulted Haaland for spikes in energy prices. “Her assault on American energy has contributed to soaring energy prices across the country,” he said. While energy costs have risen in the U.S. over the past two years, Haaland testified that federal land management policies were not to blame.
“Oil production is at an all-time high on federal public lands here in our country,” she said. “There’s a lot that goes into determining the price of gas. If it were just supply, then prices would be low right now, because we’re doing our jobs.”
Commentary from the International Energy Agency mostly accords with that assessment. The organization attributes global energy price increases to a combination of longstanding declines in coal and natural gas investment, insufficient government investment in clean energy, delays in infrastructure maintenance due to the Covid-19 pandemic and a rebound in energy demand as countries recovered from the health crisis. Later analysis from the organization cites the fallout from Russia’s war in Ukraine, like cutoffs in the flow of Russian natural gas, as a driver of higher prices, too.
Barrasso focused on the onshore lease issue. “Instead of holding quarterly oil and gas lease sales, the secretary has held only one lease sale in two years,” he said. (The department has in fact approved five sales under Haaland, but none since the beginning of 2022.)
“Instead of approving oil and gas permits on a timely basis, the secretary has doubled the length of the permitting process,” Barrasso said. “Instead of setting royalty rates at a level to boost oil and gas productions, the secretary has raised rates to discourage production.”
Haaland denied that she was slow-walking fossil fuel permits. She said that she and agency personnel would “follow the law to the best of our ability,” adding that lease sales are planned across the western U.S. in June, September and December.
Assailing Mammoth Wind Turbines
The Interior secretary drew some praise from Democrats on the energy committee, like Sen. Maria Cantwell of Washington and Sen. John Hickenlooper of Colorado, for her work on issues such as missing Indigenous women and drought management. But criticism was the order of the day.
Sen. James Risch, an Idaho Republican, heatedly pressed Haaland about a proposed 146,000-acre wind project in the southern part of his state, urging her to reject it to preserve the natural landscape. He cited Idaho’s existing renewable energy output, the cultural importance of the land and local opposition.
“They’re talking about 378 turbines,” Risch said, adding that the smallest ones were “just slightly bigger than the Statue of Liberty” and the largest were taller than Seattle’s Space Needle.
The senator presented a rendering of the project. “Is that your vision for what public lands should look like?” he asked, and then cut off Haaland when she attempted to answer his question. “Don’t do it,” Risch repeated several times.
Hawley grew visibly angry when Haaland testified that competition to hire workers in the U.S. labor market had made it difficult to line up enough staff members to keep pace with oil and gas leases, permits for energy projects, and national park maintenance.
He paraphrased her explanation as a suggestion that there were “too many jobs” in the U.S. economy. “I take the strongest possible exception to that comment,” Hawley said, describing it as the “most unbelievable statement I have heard from a member of this administration.”
‘If Both Sides Are Unhappy…’
For the time being, it appears likely that Haaland will remain a logical target amid the nation’s political divide on energy policy.
Josh Axelrod, a lawyer with the Natural Resources Defense Council, expressed frustration with her management of energy resources on federal lands—particularly in view of the Biden administration’s stated position on climate change.
“We see better analysis of climate impacts, but no obvious impact on decisions,” he said. “Look at fossil production from federal lands and waters. The burning of those resources is responsible for 25 percent of U.S. emissions. They have no plan for lowering that.”
At the same time, he gave the Interior Department some credit for shrinking the oil and gas lease auctions that have taken place and proposing new rules to improve management of public lands. “If both sides are unhappy,” he said, referring to the criticism of Haaland’s tenure, “then maybe they’re doing things right.”
Ghio, the fossil fuels program manager with Friends of the Earth, was more critical. “This is an administration that has wholesale caved to the fossil fuel industry,” she said. Ghio added that she was not sympathetic to unexpected challenges like the disruption in global energy markets resulting from the war in Ukraine.
Yet some environmentalists, like Manuel of the Sierra Club, view Haaland more positively. He commended the Interior Department for trying to limit new leases for oil and gas drilling while still adhering to the Inflation Reduction Act’s requirements. And he praised small actions like opting for maximum royalty rates on the required lease auctions as proof that Haaland’s department is doing what it can.
“I still think when you look at the big picture, they’re doing a really good job of slowly but surely winding down the oil and gas leasing program on federal lands,” Manuel said.
“It’s been taking longer than we wanted it to,” he added, “but we still give her and the president the benefit of the doubt.”