The Interior Department has signed an order into place to bar any new leasing or drilling permits on public lands over the next 60 days, including major mining activities. Once Rep. Deb Haaland is confirmed to lead the department, she will be able to establish a permanent moratorium for oil drilling on public lands.
The current freeze does not impact the 5,600 unused permits that companies have reserved over the last two years, which should allow for minimal near-term interruptions to operations. Federal lands hold approx. 22% of domestic oil production, or 2.7 MMbbl/d.
President Biden's new administration has now officially revoked the Presidential Permit issued to TC Energy's Keystone XL Pipeline. This marks the second time in the last decade that the project has been scuttled.
TC Energy issued an official statement on the decision, citing that they will now review the decision and assess their options moving forward. They have also opted to "cease capitalizing costs, including interest during construction, effective January 20, 2021, being the date of the decision, and will evaluate the carrying value of its investment in the pipeline, net of project recoveries."
TC expects the decision to result in a large non-cash after-tax charge for the first quarter of 2021.