Federal energy policy changes made in the wake of the Russian invasion of Ukraine likely won’t result in more energy development in Louisiana, even as gasoline prices continue to spike, industry officials say.
The administration decided on March 8 to ratchet up its pressure on Russia for its aggression by banning oil, natural gas and coal imports from Russia. Both the Louisiana Oil and Gas Association (LOGA) and the Louisiana Mid-Continent Oil and Gas Association (LMOGA) expressed support for the ban as a way to help the nation’s European allies.
Earlier this month, the White House announced that the Interior Department would move forward on plans to sell oil and gas leases on federal land, potentially leading to additional domestic energy development. But LOGA President Mike Moncla said Louisiana is not likely to see much in the way of economic gains as a result.
"The only thing that’s even remotely positive that Biden has done is resume sales for federal land leases, which doesn’t really impact Louisiana at all,” Moncla told the Louisiana Record in an email. “And it wasn’t done without a 50% increase in royalty fees, which is just another in a long list of the Biden’s administration’s attack on our industry.”
Louisiana’s attorney general, as well as attorneys general in other states, have sought to block some of the administration’s greenhouse-gas policies, including new rules on calculating the social costs of carbon in the development of federal regulations. The U.S. Supreme Court will decide the fate of that issue.
“The one thing we need from the Biden administration is to renew the five-year plan for leasing in the Gulf (of Mexico),” Moncla said. “Until that happens, we are going nowhere in terms of new drilling. And he’s given no indication that he plans to renew it.”
LMOGA also supports an acceleration of Gulf energy production, saying that Louisiana can help to meet global energy demands and stabilize markets in the wake of the war in Ukraine.
“LMOGA shares the goal of reducing reliance on foreign energy sources, and we’re supportive of U.S. decisions that help support our allies abroad,” LMOGA President Tommy Faucheux said in a prepared statement after the ban on Russian energy imports was announced.
Louisiana energy officials have also pointed out that the price of a gallon of gas had shot up even before the Ukraine invasion, suggesting that the administration needs to give further attention to domestic energy development.
The federal onshore leasing plan will offer 173 parcels on about 144,000 acres, which is 80% less land than was suggested under previous reviews, according to the White House. None of the available acreage is in Louisiana.
“Louisiana has not seen any benefit from Biden’s energy policies, and I don’t expect us to any time soon," Moncla said.