BILLINGS, Mont. (AP) — The Interior Department on Friday said it’s moving forward with the first onshore sales of public oil and natural gas drilling leases under President Joe Biden, but will sharply increase royalty rates for companies as federal officials weigh efforts to fight climate change against pressure to bring down high gasoline prices.
The royalty rate for new leases will increase to 18.75% from 12.5%. That’s a 50% jump and marks the first increase to royalties for the federal government since they were imposed in the 1920s.
Biden suspended new leasing just a week after taking office in January 2021. A federal judge in Louisiana ordered the sales to resume, saying Interior officials had offered no “rational explanation” for canceling them.
The government held an offshore lease auction in the Gulf of Mexico in November, although a court later blocked that sale before the leases were issued.
Friday’s announcement comes amid pressure for Biden to expand U.S. crude production as the pandemic and war in Ukraine roil the global economy and fuel prices have spiked. The Democrat faces calls from within his own party to do more to curb emissions from fossil fuels that are driving climate change.
Leases for 225 square miles (580 square kilometers) of federal lands primarily in the West will be offered for sale in a notice to be posted on Monday, officials said. The parcels represent about 30 % less land than officials had proposed for sale in November and 80% less than what was originally nominated by the industry.
The sales notices 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 for sale or to give a breakdown of the amount of land by state, saying that information would be included in Monday’s sales notices. They said the reduced area being offered reflects a focus on leasing in locations near existing oil and gas development including pipelines.
Hundreds of parcels of public land that companies nominated for leasing had been previously dropped from the upcoming lease sale because of concerns about wildlife being harmed by drilling rigs.
At the time, officials said burning fuel from the remaining leases could cost billions of dollars in climate change impacts. Fossil fuels extracted from public lands account for about 20% of energy-related U.S. greenhouse gas emissions, making them a prime target for climate activists who want to shut down leasing.
Republicans want more drilling, saying it would increase U.S. energy independence and help bring down the cost of crude. But oil companies have been hesitant to expand drilling because of uncertainty over how long high prices will continue.
Friday’s announcement comes after Interior officials had raised the prospect of higher royalty rates and less land available for drilling in a leasing reform report issued last year.
“For too long, the federal oil and gas leasing programs have prioritized the wants of extractive industries,” said Secretary Deb Haaland. “Today, we begin to reset how and what we consider to be the highest and best use of Americans’ resources.”
But the move brought condemnation from both ends of the political spectrum: Environmentalists derided the decision to hold the long-delayed sales, while oil industry representatives said the higher royalty rates would deter drilling.
Nicole Ghio with the environmental group Friends of the Earth said Biden was putting oil industry profits ahead of future generations that will have to deal with the worsening consequences of climate change.
“If Biden wants to be a climate leader, he must stop auctioning off our public lands to Big Oil,” Ghio said in an emailed statement.
American Petroleum Institute Vice President Frank Macchiarola said officials had removed some of the most significant parcels that companies wanted to drill while adding “new barriers” that would discourage companies from investing in drilling on public lands.
Lease sales and royalties that companies pay on extracted oil and gas brought in more than $83 billion in revenue over the past decade. Half the money from onshore drilling goes to the state where it occurred.
Most states and many private landowners require companies to pay royalty rates higher than 12.5%, with some states charging 20% or more, according to federal officials.
The royalty rate for oil produced from federal reserves in deep waters in the Gulf of Mexico is 18.75%. In the November auction that was later canceled, energy companies including Shell, BP, Chevron and ExxonMobil offered a combined $192 million for offshore drilling rights in the Gulf.
New leases that are developed could keep producing crude long past 2030, when Biden has set a goal to lower greenhouse gas emissions by at least 50%, compared with 2005 levels. Scientists say the world needs to be well on the way to that goal over the next decade to avoid catastrophic climate change.
Economists say a higher royalty rate would have a relatively small effect on global emissions, because any reductions in oil and gas from federal lands would be largely offset by fuel from other sources.
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Too little, too late. Plus, an increase in federal tax on gas. Slo joe’s handlers are apparently no smarter, and no more competent than he is.
“but will sharply increase royalty rates for companies as federal officials weigh efforts to fight climate change.”
“The royalty rate for new leases will increase to 18.75% from 12.5%. That’s a 50% jump”
“oil industry representatives said the higher royalty rates would deter drilling.”
“American Petroleum Institute Vice President Frank Macchiarola said officials had removed some of the most significant parcels that companies wanted to drill while adding “new barriers” that would discourage companies from investing in drilling on public lands.”
More Lies, Cons and Deceptions from the Bozo, corrupt puppet president F… Joe Biden and his treasonous, corrupt, socialist democrat Party masters.
OK, we the Democrats will let the oil companies drill for new oil….. But we are going to increase the royalty tax rates by 50% and only allow the oil companies to drill on undesirable public land. So Gas prices won’t go down.
This is just a Lie, Con, Deception in order to trick the stupid, foolish and uneducated to vote for treasonous Democrats in November 2022.
It is just another Money Grab by the Biden/BHO administration. Increase the fees and make the money disappear.
More like they know full WELL, there will be no change to CO2 emissions or gas pump prices.. BUT ITS JUST a money grab, to fill the coffers.
Increasing the drilling for oil that has no pipelines to transport it cleanly will just pollute the environment even more, and reveal to the American people the Democrats real intentions to control our lives, not enhance their environment where social unity and peace is first to be sacrificed for political power and an environment of social unrest for one of peace and American porsperity. Had the Keystone been allowed to be completed we would be receiving more Canadian oil than we could swim in, putting Putin’s redistribution of $300 billion to Russian out of business and all that wealth staying here in North America to make AMERICAN Great, not the Russians, Chinese, and Iranians. Instead, Joe Biden purposely killed the pipelines forcing Canadians to send their oil to the West Coast for shipping to Joe’s Chinese puppeteers who get cheap oil to better compete against American made products, saving their own capitol to buy arms and military improvements aimed at the head of America’s freedoms. Just how many ways can this President think of to redistribute American wealth to our sworn enemies, no doubt His Crime Family getting richer in the dealing? TRAITOR ! is too kind word to describe his perfidy of another day late and a dollar short for THE PEOPLE but not the BIdens.
AND had they not put up so damn many red tape restrictions on our OWN ALREADY existing oil refineries etc, WE WOULDN”T BE NEEDING To import any!
In essence—a PR stunt. All of the pressure coming down on him in regards to fossil fuels has forced him to admit—at least to himself—that he has been wrong in his crippling of the oil industry. So, in an attempted sign of good faith—he will open up some BUT he is still going to demonize the industry in some way. He is trying to save face on both fronts, but it is necessary that he make a choice.
When we humans exhale, we are releasing carbon dioxide, so we are causing “global warming” according to the environmentalists. So I have a great idea, let’s drive all of the “global warming” people / nut cases to extinction, that way with people like Bill Gates being extinct, the “carbon emissions” will go down and as a result we will save the planet from “global warming”!!!!!! Oh and with Bill Gates “extinct”, we Americans will not have to eat “synthetic meat”!!!!! Boy, what a benefit that will be.
I’ve often said, all these nuts that think the planet is too populated, should REDUCE that population, by eliminating themselves..
Did you notice toward the end of the article where it said, “Scientists say the world needs to be well on the way to that goal over the next decade to avoid catastrophic climate change.”
Another reminder that the world is going to end in xx number of years if we don’t take drastic action, thus crippling our economy, and society as we know it. They’ve been spouting those LIES for decades! It’s all about controlling people through fear, manipulation and lies. That’s the DemonRat party in a nutshell.
Scientists say the world needs to be well on the way to that goal over the next decade to avoid catastrophic climate change.
Scientists have been saying doomsday is 10 years away since the 1960s.
AND EVERY ONE of those predictions have been UTTERLY WRONG.