Biden admin restarts oil leases on federal land

By Scott Streater | 04/15/2022 06:00 PM EDT

A pumpjack on public lands in California.

A pumpjack on California public land. John Ciccarelli /BLM/Flickr

The Biden administration announced today it will resume oil and gas leasing on federal lands under a revised program that includes a royalty rate hike to 18.75 percent.

On Monday, the Bureau of Land Management will issue final environmental assessments and lease sale notices on 173 parcels covering 144,000 acres.

The sales will incorporate many of the recommended reforms outlined in a November 2021 federal report, including analyzing the estimated greenhouse gas emissions that contribute to climate change and an increased royalty rate “to ensure fair return for the American taxpayer,” the Interior Department said.

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Interior said the reformed review process included “tribal consultation and broad community input” and resulted in whittling down the leasing area by 80 percent.

“How we manage our public lands and waters says everything about what we value as a nation. For too long, the federal oil and gas leasing programs have prioritized 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,” said Secretary Deb Haaland in a statement. “Today, we begin to reset how and what we consider to be the highest and best use of Americans’ resources for the benefit of all current and future generations.”

President Joe Biden froze new oil and gas leasing shortly after taking office in January 2021. A federal judge overturned that moratorium last year, and Interior in 2021 conducted the first sale of the Biden era in the Gulf of Mexico (Energywire, June 16, 2021).

The November report on the federal oil program called for an update to a royalty minimum set in 1920, as well as potentially new fees and tougher bonds. The minimum royalty rate is currently set at 12.5 percent (Energywire, Feb. 1).

The White House has proposed a rulemaking for the federal leasing program, including a look at royalties, fees and bonding.

The planned oil and gas lease sales announcement angered environmentalists, who blasted the Biden administration for not taking adequate action to address climate change.

“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.

The leasing plan did not impress the oil and gas industry.

“While we’re glad to see BLM is finally going to announce a sale, the extreme reduction of acreage by 80 percent, after a year and a quarter without a single sale, is unwarranted and does nothing to show that the administration takes high energy prices seriously,” said Kathleen Sgamma, president of the Denver-based Western Energy Alliance.

Interior said in its announcement that the proposed lease sales reflect a “pragmatic approach” to the issue.

Interior added that the approach “focuses leasing on parcels near existing development and infrastructure, such as gathering lines that can help reduce venting and flaring, and will help conserve the resilience of intact public lands and functioning ecosystems.”

BLM also “prioritized avoiding important wildlife habitat and migration corridors and sensitive cultural areas,” it said.

As part of its environmental analysis of lease parcels, BLM will disclose the greenhouse gas emissions and the “social cost” of these emissions, the announcement said.

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