Friday, December 09, 2022

Biden to resume oil and gas lease sales on federal land while raising royalties

Billings, Mont. ( Associated Press) — The Biden administration is increasingly raising rates for the royalties companies pay on oil and natural gas extracted from federal lands as it accompanies the sale of public fossil fuel reserves in nine states following a court order. proceeds under, Interior Department officials said Friday.

The announcement comes at a time when Republicans are pressing President Joe Biden to expand US crude production and rein in high gasoline prices, which are contributing to record inflation. Biden is also facing calls from within his own party to do more to curb emissions from fossil fuels fueling climate change.

The royalty rate for new leases will increase to 18.75% from the current 12.5%. This is a 50% percentage increase and marks the first increase in royalties for the government in decades.

Officials said leases of 225 square miles (580 square kilometers) of federal land, mainly to the west, will be offered for sale in notices to be posted Monday. This is about 30% less than the land offered by the authorities for sale earlier in November and less than the land originally designated by the industry.

This February 26, 2021 File Photo Shows An Oil Well East Of Casper, Wyoming.
This February 26, 2021 file photo shows an oil well east of Casper, Wyoming.

The sale notice will cover leasing decisions in nine states — Wyoming, Colorado, Utah, New Mexico, Montana, Alabama, Nevada, North Dakota and Oklahoma.

Interior Department officials declined to specify which states would have parcels up for sale or a breakdown of land amounts by state, saying the information would be included in Monday’s sale notice.

Burning fossil fuels extracted from public lands accounts for about 20% of energy-related US emissions, making them a prime target for climate activists who want to close the lease.

Republicans want more drilling, saying it would increase US energy independence and help lower crude oil costs. But oil companies are hesitant to expand drilling because of uncertainty over how long the high prices will continue.

The onshore lease sale will be the first by the US Bureau of Land Management since Biden suspended him just a week after taking office in January 2021, as part of its plan to address climate change.

The administration was ordered to resume sales last year by a federal judge in Louisiana, who said internal officials offered no “reasonable explanation” for canceling them.

Hundreds of parcels of public land that the companies designated for leasing had previously been removed from upcoming lease sales because of concerns about damage to wildlife by the drilling rig.

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