The Biden administration proposed a revamp of the nation’s oil and gas leasing program on Friday, limiting the amount of property accessible for energy development and raising the cost of drilling on public land and water for oil and gas corporations. However, the Interior Department’s long-awaited report does not suggest banning oil and gas leasing on general grounds, as many environmental groups have demanded.
On the other hand, officials from the Obama administration argued the report would lead to a more responsible leasing procedure that would deliver a higher return to taxpayers. President Joe Biden requested a review in January after ordering a halt in federal oil and gas lease sales in his first days in office, citing concerns about climate change. Even as many environmentalists and Democrats urged Biden should make the leasing hold permanent, the moratorium prompted harsh condemnation from House Republicans and the oil industry.
The new report seeks a middle path to keep the multibillion-dollar leasing program going while changing it to eliminate what many officials perceive as too generous leasing terms. The paper suggests that federal royalty rates for oil and gas drilling be hiked, as they haven’t been raised in over a century. The 12.5 percent national rate that developers must pay to drill on public lands is much lower than the rates charged by many states and private landowners for drilling leases on state and private properties.
According to the report, the government should also explore boosting the bond payments that energy companies must set aside for future cleanup before drilling new wells. According to the research, bond rates have not been raised in decades. In addition, the Bureau of Land Management, part of the Interior Department, should concentrate leasing proposals on areas with moderate to high oil and gas potential and are close to current oil and gas fields.