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Daily on Energy: Navajo Nation displeased with Biden oil and gas lease ban on native land

WashingtonExaminer
WashingtonExaminer
 2021-11-24

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NAVAJO DISPLEASED: Leaders of the Navajo Nation are voicing their displeasure with the Biden administration for moving to ban new oil and gas leasing around the Chaco Culture National Historical Park in New Mexico, arguing that administration officials failed to consult the tribe before moving forward with a proposal that will prevent its members from capitalizing on their allotted lands near the park.

President Joe Biden announced the proposal during a Tribal Nations Summit at the White House last week, pitching the move among five initiatives aimed at serving Native American interests and engaging tribes in "meaningful consultation" on nature conservancy and adjacent issues, but members of the Navajo Nation's governing council maintain that the administration accomplished the opposite on Chaco Canyon.

"The Department of Interior did not consult at all the Navajo Nation or the allottees on this announcement," Council Delegate Mark Freeland told the Washington Examiner in an interview. "There was no consultation whatsoever."

Chaco Canyon lies within Navajo lands but resource extraction is restricted because it’s a historical park. While individual Navajos have been allotted parcels surrounding the park, the deeds to those lands are owned by the federal government, allowing the Biden administration to move forward with its proposal to establish a 10-mile buffer between the park and surrounding federal lands on which to ban new drilling leases for 20 years.

The Bureau of Land Management has approved oil and gas drilling on some of the surrounding lands with the consent of allottees, who benefit from income from such extraction, but the Biden administration is now seeking to limit fossil fuel exploration nearby as a means of protecting the site and the environment.

“Chaco Canyon is a sacred place that holds deep meaning for the Indigenous peoples whose ancestors lived, worked, and thrived in that high desert community,” Interior Secretary Deb Haaland said in a statement.

Navajo officials, however, said their constituents maintain significant mineral interests within the proposed buffer zone and don't want the lands withdrawn from consideration of new leases, arguing that environmental and other native groups with less direct connection to Chaco Canyon are commanding a greater influence on matters affecting the park than the Navajo themselves.

"We're tied to Chaco Canyon. We have stories, our tradition, our culture ... our people are descended from that area," said Speaker Seth Damon , who leads the Navajo Council. "There's other tribes and environmental groups in New Mexico who are banding together and working together and trying to identify themselves to say that, 'We have more interest in Chaco than the Navajo nation does. We have more interest in Chaco than the Navajo Nation will ever have.' They're forgetting though that we are part of this history."

At least 54 allotments will be affected by the proposal, according to Damon, who said the administration's decision will cut additional allottees off from seeing the economic benefits others have been able to access.

"They don't — they cannot sell this land. They cannot get a loan off this land,” Damon said. “For the very first time, the [Bureau of Indian Affairs] allowed them to have economic development by having a leasing pad for oil and gas on there, so that's an economic opportunity that's gonna get taken away from them."

Damon and his colleagues have proposed instead that the government pursue a five-mile buffer, a compromise they also offered in 2019 as Democratic members of the New Mexico's congressional delegation, including then-Rep. Haaland, helped marshal through Congress restrictions on new drilling around Chaco Canyon pending an ethnographic study of the area.

"Half of ten is five. That's a compromise," Freeland said, adding that most of allottees' mineral interests fall outside the five-mile buffer.

An Interior Department spokesperson pointed the Washington Examiner to its press release on the Chaco Canyon decision, noting specifically that it said BLM "will initiate formal Tribal consultation" as part of the proposal process, which will involve a two-year segregation period for the affected lands as the bureau conducts an environmental analysis and takes public comment on a proposed 20-year ban.

BLM also said in a fact sheet that the "proposed withdrawal would not affect existing rights of allottees or lease holders." That may not restrict energy companies on paper, but not being able to access additional leases will discourage companies from investing more on existing leases or on private lands, Freeland said.

"These energy companies are not going to want to go out there just for one site," he said. "They'd like to hit multiple sites at once. So it's not going to be worth it to them."

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writer Jeremy Beaman ( @jeremywbeaman ). Email jbeaman@washingtonexaminer.com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here . If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

OPEC+ CONSIDERING PAUSE ON PLANNED INCREASES: The global oil cartel is weighing whether to pause the 400,000 barrel per day production increase it resolved to undertake each month through next year following yesterday’s announcement of a coordinated release of crude by the United States, China, South Korea, India, Japan, and the United Kingdom, the Wall Street Journal reported this morning.

Saudi Arabia worries that additional output from the reserves threatens to reduce prices, as does Russia, although the United Arab Emirates and Kuwait are reportedly not supportive of the pause.

Several bodies, including the Energy Information Administration, International Energy Agency, and OPEC+ itself have projected the global market will loosen up next year, and a decision by the cartel to pause its planned increases would simply hasten a pull-back that was already likely in light of those projections, Ben Cahill , senior fellow for the Energy Security and Climate Change Program at the Center for Strategic and International Studies, told Jeremy.

“The idea that they were going to keep adding 400,000 barrels a day every month — it just doesn't hold up to scrutiny. It just never seemed possible that they will do that,” he said.

A new cartel? The United States opened its Strategic Petroleum Reserve under similar circumstances to these near the end of former President Bill Clinton ’s tenure, but Cahill noted the novelty of this six-nation coordinated stockpile release, saying that it introduces a new kind of dynamic into the global market.

That is definitely something that will have OPEC+ concerned, that these consumers are joining forces in a new way and kind of exercising their power as consumers,” he said.

“They're not panicking about this move, certainly,” he added. “But they're definitely watching and will be very curious to see what the market impact is and how many barrels actually go on the market.”

BIDEN IN SALES MODE: Biden took the stage yesterday afternoon to plug the SPR release ahead of the Thanksgiving travel rush and to cast blame on oil companies, which he accused of engaging in “anti-competitive behavior,” for high gasoline prices.

"If the gap between wholesale and retail gas prices was in line with past averages, Americans would be paying at least 25 cents less per gallon right now," Biden said. "Instead, companies are pocketing the difference as profit. That's unacceptable."

It’s an argument a number of analysts have treated with skepticism but one Biden and other Democrats continue to put forward, coupling it with a pitch of their policies to move the economy away from fossil fuels.

“It will take time but before long, you should see the price of gas drop where you fill up your tank. And in the longer term, we will reduce our reliance on oil as we shift to clean energy,” Biden said yesterday.

GRANHOLM SPEAKS: The White House brought in Energy Secretary Jennifer Granholm to help carry the ball on the SPR announcement yesterday, where she assessed the oil release as “a bridge to a longer-term issue” and boasted the action on oil prices while trying to manage expectations, the Washington Examiner’s Katherine Doyle reports .

“We’re not saying that we’re going to be supplying all oil for the country. We’re just kind of trying to do what we can temporarily,” she said during the White House press briefing.

Granholm also noted, “We are not saying that there is going to be some dramatic difference” on prices in light of the SPR move.

The comments reflect Biden’s earlier resistance to tapping the SPR to blunt the prices, which he said last month would fall but that gas is “still going to be above $3” per gallon even after opening the stockpile.

Analysts with ClearView Energy Partners offered this assessment yesterday as to why a few more weeks of pressure finally moved the needle on the SPR: “We would suggest that, taken together, [Biden’s speech yesterday] point towards two innately political motives underlying today’s SPR announcement: demonstrating responsiveness to voter concerns, and pushing back against blame for inflation.”

Prices remain just under $3.40 on average, per EIA’s most recent numbers , and the agency has projected per-gallon prices for December to fall to $3.19, Granholm said.

Oil consumption flub: Granholm had to apologize for being unable to tell reporters how much oil the U.S. consumes each day.

“I don’t have that number in front of me,” she said when asked for a figure. “Sorry.”

IEA ON SPR RELEASE: IT WASN’T US: The International Energy Agency distanced itself from the Biden administration’s coordinated SPR release announcement yesterday, writing that it recognizes a rise oil prices “is placing a burden on consumers and has added to inflationary pressures” during the economic recovery from COVID-19.

But the statement remained brief and lacked a clear endorsement of the policy.

“In this context, we respect the assessments and decisions made by individual IEA member and partner countries on how best to respond to the specific challenges and circumstances they each face,” the agency concluded .

This is notable because it’s IEA who helped coordinate major stockpile releases in the past, including both the 2011 release in response to Libya-related supply disruptions and the one undertaken after Hurricane Katrina. It suggests the agency remains on the side of those who opposed this SPR release on the grounds that there is no underlying emergency or major existing supply disruption keeping prices high.

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