Jhe Interior Department begins to implement new restrictions on the federal government oil and gas leasing, a longtime priority of the president Joe Biden‘s, as it moves forward with rental sales under the new Democratic Climate Act.
The Bureau of Land Management, an interior sub-agency responsible for overseeing resource development on federal lands, released a series of instructional documents Monday confirming the end of non-competitive leasing on federal lands and clarifying that all new tenants have to pay higher rents. and royalties than before.
The guidelines reflect the intention of Biden and the entire Democratic caucus to reform the oil and gas leasing program and limit its expansion, which many in the party see as contrary to prudent climate and environmental policy. .
BLM’s new “instruction notes” also established a clear policy that offices may not favor oil and gas development over other federal land uses when performing certain tasks, taking the recommendation directly from the Biden administration’s review of the oil and gas leasing program. released a year ago this friday.
Several of the new provisions, including higher royalties and rental rates, a minimum bid requirement, and the non-competitive rental component, were changes to the law codified in the Inflation Reduction Act, the green energy and health care spending bill that Democrats narrowly passed in August.
All lease sales now require a minimum bid of $10 per acre, up from the $2 per acre minimum in place since 1987. The minimum royalty rate, the amount paid on what is produced on the lease, goes from 12.5% to 16.67%.
Many environmental groups and Democratic lawmakers, as well as the Interior Department review, viewed the previous rates as unfair to taxpayers.
The same view prompted the inclusion in the Inflation Reduction Act of a provision ending non-competitive leasing, which BLM was previously allowed to do if no party bids on federal land. during the bidding process.
Some non-competitive leases have sold for as little as $1.50 per acre, and a 2020 Government Accountability Office report found that between 2013 and 2019, average competitive lease revenues were nearly three times higher than income from non-competitive leases.
Other changes include an amendment to BLM’s process to extend Approved Application Permits to Drilling, or AAPDs. Administration officials and Democrats in Congress have frequently pointed the finger at the thousands of active but undeveloped AAPDs to deflect calls from the oil and gas industry to be more sympathetic to traditional power sources in its energy policy. .
Speaker Nancy Pelosi and others threatens to withdraw these drilling authorizations from companies if they did not drill new wells on them.
According to analysts at ClearView Energy Partners, extensions to AAPDs “have previously been a routine matter”, but the new BLM memo provides that extensions “are discretionary clearances and should only be approved when the permit extension serves the ‘public interest’.
Biden has campaigned to restrict or end parts of the federal oil and gas leasing program to reduce greenhouse gas pollution. He ordered a pause on new leases during his first week in office, but the administration then proceeded with new lease sales after a judge ordered Biden’s order.
Although the Inflation Reduction Act instituted reforms to increase oil and gas rental costs, it also included provisions bring back sales of canceled offshore oil and gas concessions. Other provisions tied renewable energy development on federal lands, a Democratic priority, to the continued and regular leasing of land for oil and gas developments.
The oil and gas provisions were included at the insistence of Sen. Joe Manchin (D-WV), a centrist who opposes more aggressive Democratic policies that would restrict fossil fuels.
The department has also begun the process of scoping land lease sales to be completed in several states next year, including Wyoming, New Mexico, Utah and Nevada.