Interior Wants Higher Fee for Drilling Public Lands, But Quiet About It

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WASHINGTON — The Department of the Interior recommended on Friday that the federal government increase the fees oil and gas companies pay to drill on public land—the first increase in these rents and royalties since 1920.

But the long-awaited report has been virtually silent on the climate impacts from the public drilling program. US Geological Survey predictions Drilling on public lands and federal waters is responsible for nearly a quarter of the planet-warming greenhouse gases the US produces.

This silence has angered environmentalists, who want the federal government to consider the climate impact of drilling when weighing approval of new leases. This would be the first step towards ending the new oil and gas drilling on public lands that Mr. Biden promised when he took office.

Environmentalists said they were concerned that the Biden administration was backing down on a central climate commitment.

We expected the agency to conduct a programmed review of the entire fossil fuel leasing program that takes into account not only the environmental damage of drilling at the local and landscape level, but also the impact on the global climate crisis we are in.” said Brett Hartl, director of government affairs at the Center for Biodiversity. it had never been done before. The agency has never looked at collectively the damage from the burning of fossil fuels that would result from these leases. If you want to deliver on what the president promised, that was the best mechanism to deliver on that promise.”

As a candidate, Mr. Biden has pledged to stop issuing new leases to drill on public lands. “And by the way, no more drilling on federal soil, period. Period, period, period,” Mr. Biden told voters in New Hampshire.

He appeared earlier this month at the global climate summit in Glasgow to encourage other world leaders to take bold steps to reduce emissions from oil, gas and coal. Mr. Biden has pledged to reduce US greenhouse gas emissions 50 to 52 percent below 2005 levels by the end of this decade. Home Secretary Deb Haaland is a former environmental activist and former Congressman, and the campaign website quotes her: “We need to act quickly to counter climate change and keep fossil fuels in the ground.”

But last week, the Biden administration offered up to 80 million acres of land for drilling leases in the Gulf of Mexico – the largest sale since 2017. where the administration is legally obliged to hold rental sales After Republican attorneys general from 13 states successfully overturned the sales suspension that Mr. Shell, BP, Chevron and Exxon Mobil have offered $192 million for drilling rights in the government-issued area.

The Mine Lease Act of 1920 established a system that allowed private companies to lease public lands to extract oil and gas from the ground. In the century since then, royalties paid by companies have not changed. In 1953, Congress passed the 1953 Outer Continental Shelf Lands Act to govern drilling in federal waters. Both laws established a system that required the government to regularly auction lease contracts.

Biden issued an executive order calling for a temporary ban on new oil and gas leasing on public lands, which will remain in effect while the Home Office prepares a comprehensive report on the state of federal oil and gas drilling. programs..

Ms. Haaland sent the report to the White House in June.

Several environmentalists who spoke to Ms. Haaland and her staff said they expected the June report to contain two recommendations: an increase in the wages oil and gas companies charge for drilling on public land, and the creation of an accountable system. for environmental damage resulting from the burning of fossil fuels extracted under leases.

Environmentalists noted that the report was released during a long holiday weekend when many Americans were less likely to pay attention. Some have made comparisons to the Trump administration. tried to bury a major climate change report, also by posting the day after Thanksgiving.

A spokesperson for the Interior Ministry declined to comment on the timing of the report.

The report’s recommendations for increasing drilling fees are largely in line with legislation currently passing Congress. The $2.2 trillion social policy and climate bill that passed the House of Representatives last week includes provisions that will increase federal royalty rates for oil and gas companies.

Numerous studies from government and financial watchdog groups have concluded that the federal government underestimates the value of oil and gas resources on public lands and underpaid companies to extract the fuels. The State Accountability Office has placed the management of the federal government’s oil and gas resources within its jurisdiction. “high risk” listprograms open to waste, fraud, and abuse.

Copyrights are still a major source of revenue: the federal government has so far 9.6 billion dollars From drilling in public lands and federal waters this year, up from $8 billion last year.

As a way to increase revenue for the $2.2 trillion spending bill, Democrats will raise onshore oil and gas drilling concession rates from 12.5 percent to 18.75 percent and provisions in legislation setting offshore rates to “at least 14 percent”. they added. In federal oil and gas lease auctions on public lands, it would raise the minimum bid from $2 per acre to $10 per acre. And it will increase the annual rents companies must pay to the federal government to lease the land. These changes will bring in about $2.5 billion in new revenue by the end of the decade, according to the Congressional Budget Office.

Climate policy advocates said they support raising these fees and royalties, but that it won’t slow drilling or climate change.

“This is what’s going to happen,” said Joel Clement, a former Home Office official who resigned from the agency in protest during the Trump administration and is now a senior fellow at the Harvard Kennedy School. “But it’s a first hit, not a double or a number. And at this point, we need to have a home on public land leases. This is one of the urgent climate levers that can bring real change. The lease program must take climate emissions into account. A permanent moratorium on drilling is not required. way you get there.”

Mr Clement and other climate policy experts said the Department of the Interior should include the potential climate impacts of leasing oil and gas drilling in considerations required by the National Environmental Policy Act of 1970, which said the government must consider ecological damage when deciding whether to allow drilling. and construction projects.

If all assessments of the effects of drilling on public lands were to include in leases the potential warming effect of burning fuels, this would create legal grounds for the government to stop new drilling leases, experts said.

But moving forward with such a policy would create intense political backlash from Republicans, the oil industry, and Democrats from oil and gas nations. This could also create complications for the administration as it tries to steer the broader spending bill through a very thin Democratic majority in Congress.

“The political tension is troubling, but as a result, we need to stop leasing oil and gas on public lands,” Mr. Clement said. “It is no exaggeration to say that doing so will change the global conversation about the energy transition.”

Lisa Friedman contributed to this report.

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