US Oil Drilling Review Offers Higher Fees, Development Restrictions, Energy News, ET EnergyWorld

New Delhi: The Biden administration on Friday proposed a series of changes to the country’s federal oil and gas rental program, including increasing fees on drilling companies and limiting their access to wildlife and areas culturally sensitive.

The recommendations followed a months-long review to ensure that drilling on federal lands and waters benefits the public. But a sign of the extreme controversy surrounding the issue, environmental groups called the proposals too weak and the industry criticized them as too harsh.

President Joe Biden’s administration kicked off the review earlier this year in what had been widely seen as a step towards fulfilling its election promise to end new fossil fuel drilling on federal land to combat the climate change.

As part of the US federal oil and gas rental program, the Home Office is to hold regular auctions for the drilling industry to boost national energy self-sufficiency and raise money for public coffers.

The Home Office report, however, said the current program “is not in the public interest” and called for new rules to increase royalty rates, bond rates and other fees for the producers. Current law requires a minimum royalty rate of 12.5% ​​for oil and gas produced on federal land, a level that has not changed for about a century.

The report also proposed new rules to avoid leasing “which conflicts with recreation, wildlife habitat, conservation, and historical and cultural resources,” he said.

“Our nation is facing a deep climate crisis that affects all Americans,” Home Secretary Deb Haaland said in a statement announcing the recommendations.

“The Home Office has an obligation to responsibly manage our public lands and waters – providing a fair return to the taxpayer and mitigating worsening climate impacts.”

The American Petroleum Institute, which represents the US oil and gas industry, criticized the proposals, saying they would increase costs for domestic energy producers at a time when retail gasoline prices are already high. .

Environmental groups, including the Center for Biological Diversity and Food & Water Watch, have opposed the proposals because they are too weak.

“These insignificant changes make almost no sense in the midst of this climate emergency, and they break Biden’s campaign pledge to stop new oil and gas rentals on public lands,” said Randi Spivak, director of public lands. CBD public lands.

“Giving the green light to more fossil fuel extraction and then pretending all is well by raising the royalty rates is like rearranging the lounge chairs on the Titanic,” she said.

About a quarter of the country’s oil and gas comes from federal leases, and the program raises billions of dollars for federal and state budgets.


The Home Office had scheduled the rental report to be released in early summer, but repeatedly delayed it without explanation.

The ministry had also attempted to suspend oil and gas leasing during the program review, but was forced to move forward with the auction after several oil and gas-producing states sued before a federal court.

A federal auction of millions of acres in the Gulf of Mexico in the United States this month, for example, generated more than $ 190 million in high bids, the highest since 2019, with major buyers. including Exxon Mobil Corp, Chevron Corp, BP Plc and Shell.

Haaland said she wanted to reduce the carbon footprint of the country’s federal lands and waters by encouraging the rental of renewable energy sources such as wind, solar and geothermal power instead of fossil fuels.

Biden, meanwhile, has set himself a goal of decarbonizing the U.S. economy – the world’s second-largest emitter of greenhouse gases – by 2050, in part by encouraging a shift from fossil fuels to renewables.

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