WASHINGTON — President Joe Biden’s administration is dramatically curtailing U.S. public land available for new oil and gas development as it restarts leasing with new environmental protections.
The shift is part of a Bureau of Land Management plan to resume selling drilling rights on government-managed federal lands concentrated in the western U.S. When the government holds those auctions, expected later this year, roughly 80% less land will be available for oil and gas leasing, the Interior Department said.
Energy companies also will be forced to pay higher royalties for the oil and gas they extract from the newly leased land.
The changes, which would ultimately boost the cost of oil and gas development on federal lands, could clash with Biden’s efforts to tame persistently high gasoline prices by releasing crude from the nation’s emergency stockpile and authorizing wider summertime sales of a cheaper higher-ethanol fuel.
“For too long, the federal oil and gas leasing programs have prioritized the wants of extractive industries above local communities, the natural environment, the impact on our air and water the needs of tribal nations, and, moreover, other uses of our shared public lands,” Interior Secretary Deb Haaland said in a news release.
“Today, we begin to reset how and what we consider to be the highest and best use of Americans’ resources for the benefit of all current and future generations,” she said.
The new leasing plan, which does not apply to U.S. coastal waters, falls far short of some climate activists’ demands that the administration permanently block oil and gas development on public land.
The administration’s plan to sell new leases is “a reckless failure of climate leadership,” said Randi Spivak, public lands director at the Center for Biological Diversity. “These lease sales should be shelved and the climate-destroying federal fossil-fuel programs brought to an end.”
Oil industry advocates argue the U.S. can’t afford to restrict oil and gas development on federal lands and waters that provide nearly a quarter of the nation’s crude production. They’ve argued the U.S. should accelerate domestic oil and gas development amid the war in Ukraine and concerns about Europe’s reliance on Russian energy supplies.
Anne Bradbury, chief executive officer of the American Exploration and Production Council, called the announcement of new onshore lease sales — the first under Biden — “a step in the right direction.”
But “to really unleash American energy, the Biden administration should continue to hold ongoing lease sales,” as well as “issue permits more expeditiously and provide consistent regulatory certainty,” Bradbury said.
The changes flow from a Biden administration assessment last year that concluded the federal government’s oil and gas leasing program should be overhauled to better account for climate change and ensure a higher return to taxpayers.
Under the approach, the Interior Department is narrowing the amount of land available for oil and gas leasing, a shift meant to target the highest-potential territory while avoiding wildlife habitat and sensitive cultural areas. Some 173 parcels spanning roughly 144,000 acres will be available for auction under sale notices the Bureau of Land Management will release Monday.
Royalty rates for competitive leases will increase to 18.75%, a boost from the longstanding typical charge of 12.5% the value of oil and gas extracted from onshore leases.
Conservationists and good-government groups have argued higher royalties are necessary to avoid shortchanging U.S. taxpayers, especially since states and private landowners typically impose much higher rates. For instance, in Texas, royalty rates can be double that charged by the U.S. government.
Biden paused oil and gas lease sales in January 2021 to consider the path forward, after previous campaign promises to ban new oil and gas permitting in the territory. Though a federal judge last June ruled that moratorium was unlawful, the planned Bureau of Land Management auctions would be the first sales of onshore oil and gas leases since the president took office.