After taking office as the 46th president of the United States, Biden immediately signed a number of executive orders and administrative actions, including an order to suspend crude oil extraction, which caused a rebound in the US oil industry and the stock price of US energy companies fell.
During his campaign, Biden promised to permanently ban new drilling on federal land. Because the land lease provided by the federal government accounts for 25% of the country’s crude oil production, the government itself is one of the main sources of greenhouse gas emissions in the United States. When President Trump was in office, he tried to play down the problems caused by global warming and maximize the production of oil, natural gas and coal on federal land.
According to the memorandum of the United States Department of the Interior, when the government reviews the impact of laws and policies related to the federal mineral leasing program, the agencies and bureaus of the Department of the Interior are not authorized to issue new drilling leases or permits for a period of 60 days. However, the existing business is not restricted.
After the news, the share prices of all US oil producers that lease federal land fell sharply on Thursday. EOG Resources (EOG-US) and Cimarex Energy (XEC-US) both closed down 8.6%. Devon Energy (DVN-US) ) Fell 7.9%, Occidental Petroleum (OXY-US) fell 6.4%, and Exxon Mobil (XOM-US) fell 2.9%.
Biden’s executive order was welcomed by environmentalists, but it was widely opposed by the oil industry. Anne Bradbury, chief executive of the US Exploration and Production Commission, said in an interview that the ban is targeted, even if it is only 60 days, it is a very radical move. Mike Sommers, president of the American Petroleum Institute (API), said that this move is the government’s leading the United States to rely more on foreign energy.
Biden’s latest administrative order has also severely impacted the major western oil-producing states such as New Mexico and Wyoming, because part of the expenditure depends on the royalties paid by oil companies. The New Mexico Oil and Gas Association said in a statement that the new restrictions could cause the state to lose more than 60,000 jobs and $800 million in support of state public schools, emergency personnel and medical services.