Biden administration announces it will resume onshore oil and gas lease sales with higher royalty rate

By Ella Nilsen, CNN

The Department of Interior announced Friday it planned to resume onshore oil and gas lease sales on federal land, with a higher royalty rate for companies to pay to the federal government.

The Bureau of Land Management will issue sale notices on Monday for upcoming oil and gas projects.

The Biden administration had previously planned to hold the lease sale, but paused it after a judge blocked the administration from using a metric to quantify the economic harm caused by the climate crisis, such as sea level rise, more destructive hurricanes, extreme wildfire seasons and flooding. The Biden administration appealed that ruling and argued it necessitated a pause on all of the many projects in which the government used that particular analysis.

The royalty rate increase comes after the Interior Department issued a controversial report last November recommending that rates be increased for more of a return to taxpayers. The newly increased royalty rate is 18.75%, up from of 12.5%. It’s the first time the federal government has ever increased what companies pay to drill for oil and gas on public land.

“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,” Interior Secretary Deb Haaland said in a statement, adding 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 Interior said is an 80% reduction from the acreage originally being considered for leasing. Interior said it reduced the amount of land being offered after “robust environmental review” and engagement with Native tribes and local communities.

The department also said it would focus on offering new leases near existing oil and gas infrastructure and will continue to disclose greenhouse gas emissions that would result from oil and gas drilling on federal lands.

Environmental groups blasted the move, saying the Biden administration is disregarding its promises on the climate crisis.

“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.”

Natasha Léger, executive director of Citizens for a Healthy Community, said restarting the lease sales will only lead to 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.”

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

“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.”

A representative for the American Petroleum Institute, a powerful oil lobby, welcomed the action in a statement but said it didn’t go far enough toward opening the country’s 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,” said Frank Macchiarola, the institute’s senior vice president of policy, economics and regulatory affairs. “We look forward to seeing the additional details of the leasing proposal.”

This story has been updated with additional information.

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