Interior resumes oil and gas leases on public lands, raises royalty rates
The U.S. Interior Department is reopening oil and gas lease sales on public lands this summer, and hiking the fees lessees have to pay.
The announcement follows President Joe Biden’s efforts to reform the federal oil and gas program. Last year a federal judge blocked Biden's moratorium on new leases. And then a sale scheduled to happen earlier this year was delayed by a legal wrangling over the administration's "social cost of carbon" policy.
The new lease sales include 144,000 acres of public land, mostly in the Mountain West. Interior noted that that's about 80% less acreage than the oil and gas industry initially nominated.
And the agency is increasing royalties for new leases, from 12.5% to 18.75% – a rate that had gone unchanged for more than a century.
Critics are wide-ranging. Some oil and gas industry groups and lawmakers like Wyoming Sen. John Barrasso say the policies are at odds with efforts to lower fuel prices.
“After begging American oil and natural gas companies for months to produce more, the Biden administration is still doing all it can to restrict leasing on federal lands,” Barrasso said in a statement.
Leases can take years, or longer, to produce fuel which could affect gas prices. The Interior Department reported last year that about 14 million acres – more than half of all federal acres leased – sit unused.
Some environmental groups are also critical of the Interior’s announcement, saying any leases contribute to climate change and would disproportionately affect Indigenous groups and people of color.
“It’s as if they’re ignoring the horror of firestorms, floods and megadroughts, and accepting climate catastrophes as business as usual. These so-called reforms are 20 years too late and will only continue to fuel the climate emergency,” Randi Spivak, the public lands director at the Center for Biological Diversity, said in a statement.
The nonprofit Center for Western Priorities is one of the few organizations to praise the plan.
“We think that it’s the best case scenario,” said Aaron Weiss, the deputy director there.
He said that the Interior is caught between dueling court opinions, the oil industry, climate activists and laws.
“They’re working within a framework of a 100-year-old law, the Mineral Leasing Act, that says the Interior Department shall hold quarterly lease sales,” he said.
The Interior also noted that it would ensure “tribal consultation and broad community input” within lease sales.
“That, I think, is a sign of how important it is to finally have an Indigenous Interior secretary, – finally having a secretary who finally takes tribal consultations seriously. And that’s a big deal,” said Weiss.
Weiss added that his group does have a big critique for the Interior, though: They are still waiting, and hoping for, a comprehensive review of the leasing system promised by the Biden administration.
“I have not seen any significant signs that it’s happening, and that is a huge concern for us," he said. "Because in order to do that review correctly, in order for it to hold up in court, in order for it to lead to that long-term policy change, that takes years. And the clock is ticking.”
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUNR in Nevada, the O'Connor Center for the Rocky Mountain West in Montana, KUNC in Colorado, KUNM in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.