Oil & gas leasing resumes -- with reforms
Mixed reactions to Biden's pursuit of balance
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THE NEWS: The Interior Department announced Friday that it will resume oil and gas leasing on public lands, but will also reform the program by raising royalty rates, increasing public input and tribal consultation in advance of the sales, and incorporate the best available science regarding climate change and greenhouse gas emissions. Of the original 733,000 acres nominated for leasing in the upcoming sale, the Bureau of Land Management will put only 144,000 on the auction block.
THE CONTEXT: A great deal can be gleaned from the competing headlines for this news as well as from the radically mixed reactions from the environmental community.
The Interior news release was headlined: “Interior Department Announces Significantly Reformed Onshore Oil and Gas Lease Sales Lease sales to focus on highest and best use of America’s public lands, reflecting an 80 percent reduction from nominated acreage.”
Compare that to the New York Times’ headline: “Biden Plans to Open More Public Land to Drilling The president is under pressure to bring down gas prices, but any new drilling would be years away. The fees that companies pay would rise sharply.”
Both headlines are for the same news, and both are also accurate (though the Times’ use of “more” is a bit confusing: More than what?). Which is just to say, the news, itself, is a bit mixed and, some might say, contradictory.
On the one hand, the Biden administration is lifting its oil and gas leasing pause, which will allow oil companies to amass more acreage, which in theory will allow them to drill more wells, produce more oil and gas, and push us further towards a climate catastrophe. That news was not exactly welcomed by the “keep-it-in-the-ground” community, as is exemplified by this tweet from Erik Schlenker-Goodrich, executive director of the Western Environmental Law Center:
On the other, it’s resuming the program under different terms than before. The royalty rate, gone unchanged since the General Mineral Leasing Act went into effect more than a century ago, will increase significantly, from the current 12.5 percent to 18.75 percent (on new leases, not existing ones). While this is unlikely to affect the pace of drilling, it will ensure that the American public gets a better return on its resources.
The administration also says it will better incorporate public input, tribal consultation, and science into decisions regarding which parcels to lease and which ones to keep off-limits. It was this “pragmatic approach” that led the BLM to hold back more than 80 percent of the nominated parcels from the auction block for the upcoming sales. These reforms elicited a much more favorable response from Jade Begay, Climate Justice Director at NDN Collective:
The resumption of leasing is certainly disappointing. Oil and gas companies already hold leases on some 26 million acres of public land and minerals, about half of which have not been developed. They certainly don’t need more. But to be fair, when the Biden administration paused the program, it was intended to be a temporary measure to give them time to review and reform the program. Which they’ve done. Also, it’s not clear that the administration had the legal authority to make the ban permanent. Last year a federal judge ruled that even the temporary pause was illegal. That ruling is under appeal.
Biden clearly was hoping that Congress would take care of leasing reform in its Build Back Better Bill, that has been stalled indefinitely thanks to Republican opposition. That’s left the job to Interior Secretary Deb Haaland. And, given what she has to work with and the current political climate, she’s probably done as well as can be expected.
Read more about the leasing program and its history:
Data Snapshot:
And then there is this: Peer's newsletters are really depressing!
https://peer.org/more-toxic-runoff-from-santa-susana-field-lab/?eType=EmailBlastContent&eId=24079c03-f21a-4dcf-b433-2cef14b05bae
I find it interesting that the royalty rate paid to the federal government is slated to increase from 12.5% to 18.75%. Jonathan states that "American People will get a better return on resources." The interesting part of this change, for me, is that the current Federal gasoline tax is 18.4% - almost identical to the new royalty rate of 18.75%.
With gas prices hovering around $6.00 per gallon in California I wonder if "a better return on resources" will result in lower gasoline/heating/cooling expenses? Somehow my gut tells me that the Federal Government has no plans to lower the federal tax rate. It's more fun for the feds to use the increased revenue to expand the bureaucracy and/or waste it on some new programs or the expansion of existing ones.