An oil well operates at sunrise on August 25, 2021, in Watford, ND, part of McKenzie County. The Biden administration on Friday, November 26, called for an overhaul of the nation’s oil and gas rental program.
Matthew Brown / AP
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Matthew Brown / AP
An oil well operates at sunrise on August 25, 2021, in Watford, ND, part of McKenzie County. The Biden administration on Friday, November 26, called for an overhaul of the nation’s oil and gas rental program.
Matthew Brown / AP
The Biden administration on Friday recommended an overhaul of the nation’s oil and gas leasing program to limit the areas available for energy development and increase costs for oil and gas companies to exploit on public land and water. .
The Home Office’s long-awaited report doesn’t stop at recommending an end to oil and gas leasing on public lands, as many environmental groups have called for. But officials said the report would lead to a more responsible leasing process that would provide better returns for US taxpayers.
“Our nation faces a profound climate crisis that is affecting every American,” Interior Minister Deb Haaland said in a statement, adding that the new report’s recommendations would mitigate the increasingly severe impacts of climate change “while remaining steadfast in the pursuit of environmental justice”.
The report completed a review in January by President Joe Biden, who directed a halt to federal oil and gas sales during his first days in office, citing concerns about climate change.
The ban drew fierce criticism from Republicans in Congress and the oil industry, even as many environmentalists and Democrats say Biden should halt the rentals permanently.
The new report looks for an intermediary that could continue a multibillion-dollar rental program while reforming it to end what many officials see as overly favorable terms for the industry.
U.S. Secretary of the Interior Deb Haaland addresses a crowd during a celebration at Chaco Cultural National Historical Park in northwestern New Mexico on Monday, November 22, 2021. Haaland talks in action recently by the Biden administration to begin the process of acquiring federal land from oil and gas development within a 10-mile radius of the park’s boundaries for 20 years.
Susan Montoya Bryan / AP
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Susan Montoya Bryan / AP
U.S. Secretary of the Interior Deb Haaland addresses a crowd during a celebration at Chaco Cultural National Historical Park in northwestern New Mexico on Monday, November 22, 2021. Haaland talks in action recently by the Biden administration to begin the process of acquiring federal land from oil and gas development within a 10-mile radius of the park’s boundaries for 20 years.
Susan Montoya Bryan / AP
The report recommends raising the federal tax rate on oil and gas drilling, which hasn’t been raised in 100 years. The 12.5% federal rate that developers pay to drill on public land is significantly lower than many states and private landowners charge to drill on public or private land.
The report also said the government should consider increasing the bond payments that energy companies must set aside for future cleanups before they drill new wells. The report said bond yields have not been raised in decades.
According to the report, the Bureau of Land Management, an agency of the Ministry of the Interior, should focus on leasing in areas with medium to high potential for oil and gas resources and close to existing oil and gas infrastructure. Yes.
The White House declined to comment on Friday, referring to questions for the Interior Department.
The federal leasing program has gained renewed attention in recent weeks as gas prices skyrocket and Republicans complain that Biden’s policies, including the rental ban, deny pipelines Keystone XL and an oil rental ban at the Arctic National Wildlife Refuge in Alaska, have contributed to the spike in prices.
Biden on Tuesday placed a record order 50 million barrels of oil released from US Strategic Reserve, aimed at reducing gasoline prices amid concerns about inflation. According to the American Automobile Association, gasoline prices are at $3.40 per gallon, 50% higher than a year ago. Oil prices fell about 13% on Friday as a new coronavirus variant first detected in South Africa appears to be spreading globally.
The Biden administration conducted a sale and lease of federal oil and gas reserves in the Gulf of Mexico last week, after attorneys general from the Republican-led states sued successfully in federal court lift the suspension of federal oil and gas sales that Biden had imposed when he took office.
Energy companies including Shell, BP, Chevron and ExxonMobil have offered a total of $192 million for offshore drilling rights in the Gulf, highlighting the obstacles Biden faces in achieving sub-climate climate goals dependent on deep cuts in fossil fuel emissions.
The leases would take years to develop, meaning oil companies could continue to produce crude as long as 2030, when Biden aims to reduce greenhouse gas emissions by at least 50%, compared with 2005. Scientists say the world needs to hit that target within the next decade to avoid catastrophic climate change.
Still, even as Biden has tried to call on other world leaders to step up efforts to combat global warming, including at this month’s United Nations climate talks. in Scotland, he is still struggling to deal with climate problems in his home country.
The administration has proposed another oil and gas sale early next year in Wyoming, Colorado, Montana and other states. Interior Department officials proceeded despite concluding that burning the fuel could lead to potential future climate damage of billions of dollars.
Emissions from the burning and extraction of fossil fuels from public lands and waters account for about a quarter of U.S. carbon dioxide emissions, according to the U.S. Geological Survey, according to the U.S. Geological Survey. US Geology.
Environmentalists praised the report’s recommendation to raise the tax rate, but some groups argued that the report did not do enough to tackle the climate crisis.
Taylor McKinnon of the Center for Biodiversity, an environmental group, said: “Today’s report is a complete failure of the climate leadership our world so desperately needs.
Report “consides more fossil fuel rentals that our climate can’t afford” and reneges on Biden’s campaign promise to stop new oil and gas leases on properties public, McKinnon said.
The American Petroleum Institute, the leading lobbying group for the oil industry, said the Interior is proposing to “increase the cost of American energy development without a clear roadmap for the future of inter-leaving leasing.” bang.”
Other groups are more optimistic.
“This report is an incredibly compelling case, both economically and ecologically, to bring the oil rental program to life,” said Collin O’Mara, president and CEO of the National Wildlife Federation. federal gas in the 21st century. “Implementing these long-overdue reforms will ensure taxpayers, communities and wildlife are no longer harmed by below-market rates, inadequate measures poor protection and planning.”
The Wildlife Federation and other groups have urged the Senate to include reforms to the oil and gas program in Biden’s sweeping environmental and social policy bill. Multiple reforms, including increasing tax rates and banning drilling in the Arctic refuge and along the Atlantic and Pacific straits, were included in the version of the House bill passed last week. .
Jennifer Rokala, executive director of the Center for Western Priorities, said the report “provides an important roadmap for ensuring drilling decisions on public land take into account (climate) impacts on our land, water and wildlife, while ensuring a fair return for taxpayers.”
Republicans said the report was a continuation of what they called Biden’s fight over domestic energy production.
Although the report hides behind language about “necessary reforms” and royalty rate adjustments, “we know the real story,” said Arkansas Representative Bruce Westerman, top Republican on the House Natural Resources Committee, said.
The Biden administration “will be bogged down by small energy companies for years of regulatory deadlock, placing millions of acres of resource-rich land on lockdown and locking down (and) ignoring local input,” Westerman said. . “Ultimately, the American consumer will pay the price. Look no further than the skyrocketing prices you’re paying at the gas pump.”
Experts say economic factors, including a slow recovery from the pandemic, are hampering US oil and gas production. As the economy recovered, manufacturing lagged and prices surged to a seven-year high in October.
