Biden administration declares onshore oil and gas lease sales will resume with higher royalty rates

The Department of the Interior stated on Friday that onshore oil and gas lease sales on federal land would resume, with a higher royalty rate for corporations to pay to the government.

On Monday, the Bureau of Land Management will publish notices of upcoming oil and gas projects for sale.

The lease auction had been scheduled by the Biden administration, but it was put on hold after a judge barred the agency from applying a formula to evaluate the economic impact caused by climate change, such as rising sea levels, more catastrophic storms, intense wildfire seasons, and flooding. The Biden administration challenged the verdict, claiming that it required a halt to all of the government’s programmes that used that exact study.

The royalty rate hike comes after the Interior Department released a divisive study in November proposing that charges be raised to give taxpayers a better return. The new royalty rate is 18.75 percent, up from 12.5 percent previously. It’s the first time the federal government has raised the cost of drilling for oil and gas on public lands.

“For too long, the federal oil and gas leasing programmes have prioritised the wants of extractive industries above local communities, the natural environment, the impact on our air and water, the needs of tribal nations, and, moreover, other uses of our shared public lands,” Interior Secretary Deb Haaland said in a statement, adding that the department would “begin to reset how and what we consider to be the highest and best use of Americans’ resources.”

The bureau will offer around 173 parcels on roughly 144,000 acres of federal land, which is an 80 percent drop from the original amount examined for lease, according to the Interior Department. Following a “rigorous environmental evaluation” and consultation with Native tribes and local residents, the Interior Department lowered the amount of land being auctioned.

The agency also stated that it will prioritise new leases near existing oil and gas infrastructure, and that it would continue to publish greenhouse gas emissions associated with oil and gas drilling on federal lands.

Environmentalists blasted the move, claiming it shows the Biden administration isn’t serious about addressing the climate catastrophe.

“The Biden administration’s claim that it must hold these lease sales is pure fiction and a reckless failure of climate leadership,” Randi Spivak, public lands director at the Center for Biological Diversity, said in a statement. “These so-called reforms are 20 years too late and will only continue to fuel the climate emergency. These lease sales should be shelved and the climate-destroying federal fossil fuel programs brought to an end.”

Restarting the lease sales, according to Natasha Léger, executive director of Citizens for a Healthy Community, will only result in more climate disasters.

“The West is drying up and going up in flames. Between extreme drought, the shrinking of the Colorado River, and now urban wildfires in the winter, how much more death, destruction and devastation do we have to see before this administration takes action?” said Léger. “It’s time for climate leadership and to stop leasing our public lands for oil and gas development. We need heroes to break through the political and economic inertia that has us on a collision course to inhabitability.”

“it’s never a good sign when the President announces something at 5pm on a Friday,” Sunrise Movement executive director Varshini Prakash said.

“This is why young people are doubting the political process altogether,” Prakash said in a statement. “If Biden wants to solve for voter turnout in 2022, he should actually deliver on the things he promised, not move farther away from them.”

In a statement, a spokeswoman for the American Petroleum Institute, a prominent oil lobby, praised the move but said it didn’t go far enough to open up federal land to drilling.

“At a time of high energy costs, these changes to long-standing fair and reasonable lease terms may further discourage oil and natural gas investment on federal lands,” Frank Macchiarola, the institute’s senior vice president of policy, economics, and regulatory affairs, said. “We look forward to seeing the additional details of the leasing proposal.”