The administration of U.S. President Joe Biden on Friday proposed a slew of reforms to boost public benefit from the nation’s federal oil and gas leasing program following a months-long review.
The recommendations in the long-awaited report included hiking royalty rates and fees that drillers must pay on oil and gas produced in federal lands and waters, and limiting areas that can be developed to protect wildlife, recreation, and cultural zones.
President Joe Biden’s administration had launched the review earlier this year in what had been widely seen as a first step in delivering on a campaign promise to end new fossil fuel drilling on federal lands to fight climate change.
Under the U.S. federal oil and gas leasing program, the Interior Department is required to hold regular auctions of federal land for the oil and gas drilling industry – an initiative enshrined in law and intended to boost domestic energy self-sufficiency and raise money for public coffers.
The Interior Department report called for new rules to boost royalty rates, bonding rates, and other fees for producers. Current law requires a minimum royalty rate of 12.5% for oil and gas produced on federal lands.
The report also seeks to avoid leasing “that conflicts with recreation, wildlife habitat, conservation, and historical and cultural resources,” it said.
“Our nation faces a profound climate crisis that is impacting every American,” Interior Secretary Deb Haaland said in a statement announcing the recommendations.
“The Interior Department has an obligation to responsibly manage our public lands and waters – providing a fair return to the taxpayer and mitigating worsening climate impacts – while staying steadfast in the pursuit of environmental justice,” she said.
An oil industry group, the American Exploration and Production Council, said it looked forward to working with the administration on the specifics of the proposals, but warned against excessive restrictions.
“Arbitrary leasing or permitting restrictions only serve to cause uncertainty for American businesses and strained budgets for state and federal governments as well as local communities,” it said in a statement.
About a quarter of the nation’s oil and gas comes from federal leases and the program raises billions of dollars for federal and state budgets.
The Interior Department had meant for the leasing report to be released by early summer but repeatedly delayed it without explanation.