US President Joe Biden has ordered to temporarily suspend oil and gas leasing and permitting on federal lands and waters, in a move aimed at tackling climate change. The 60-day suspension appears to be Biden’s first step before implementing a permanent ban on new drilling on federal acreages. The decision also marks a major policy reversal after Biden’s predecessor Donald Trump focused on maximizing fossil fuel production.
Environmentalists welcomed the move, but the fossil fuel industry derided it. An executive with the American Exploration & Production Council said that the move was aggressive despite just 60 days. Major drilling companies had stockpiled permits anticipating the policy change. Federal permit requests accounted for 36% of total applications in 2020, compared to 18% in 2019.
Following the announcement, shares of companies with high exposure to federal drilling were down. Devon Energy dropped 7.9% on the New York Stock Exchange, Occidental Petroleum lost 6.4%, while Cimarex Energy and EOG Resources fell 8.6% each.
