Biden administration announces new oil, gas lease sales, royalty hike

The Interior Department on Friday announced new oil and gas lease sales on public lands as well as an increase in royalty rates, a pair of moves likely to be unpopular among both environmental groups and the fossil fuel industry. 

The Biden administration initially froze new leasing on public lands shortly after President Biden took office, but a federal district court that summer issued an injunction against the order. The department cited that injunction in announcing the lease sales. 

In the announcement, the department said the Interior Department will issue final sales notices for the upcoming sales Monday. The Interior Department also announced a royalty hike, increasing rates from 12.5 to 18.75 percent. 

Environmental groups like the Center for Biological Diversity excoriated the decision, calling it a capitulation to the energy industry at a crucial juncture in efforts to combat climate change. 

“The Biden administration’s claim that it must hold these lease sales is pure fiction and a reckless failure of climate leadership,” Randi Spivak, public lands director at the Center for Biological Diversity, said in a statement. “It’s as if they’re ignoring the horror of firestorms, floods and megadroughts, and accepting climate catastrophes as business as usual.”

“The latest report from the IPCC concluded that globally we must drastically reduce emissions immediately, or risk surpassing 3 degrees Celsius of warming — double the 1.5 degree threshold for permanent climate catastrophe,” said Jamie Williams, president of the Wilderness Society. “New leasing locks us into decades of more climate pollution.”

Meanwhile, Sen. John Barrasso (R-Wyo.), the top Republican on the Senate Energy Committee, sharply criticized the royalty increase.

“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,” said Barrasso. “First it was an illegal moratorium imposed at the start of his presidency. Now it’s this proposal to dramatically increase the cost of onshore leases while cutting the acres offered for lease by 80 percent. The president claims he’s doing nothing to limit domestic production, but once again his administration is making American energy more expensive and harder to produce.”

In October, the Bureau of Land Management said that it will incorporate national greenhouse gas emissions in oil and gas leasing decisions. Separately, the federal government also said it would incorporate the so-called social cost of carbon into leasing decisions and other regulations.

Judge James Cain, a Trump appointee, blocked the use of the metric in February, but an appeals court overturned the ruling in March. The same week, the department announced new lease sales would proceed following the ruling. 

The Interior Department had previously announced an offshore lease sale in the Gulf of Mexico, but after a court ruled those sales invalid, the government said it would not appeal. 

 A spokesperson for the Center for Western Priorities, however, called the Friday annoucement “good news” that “shows that Secretary Haaland and her team at Interior are listening to Westerners and working in the best interest of taxpayers.” 

“By limiting the upcoming sale to areas with existing oil and gas infrastructure, Interior will prevent speculators from locking up public lands with little or no potential for future production,” he added. “Raising the royalty rate ensures taxpayers will get a fair share from oil produced on these parcels.” 

The announcement comes as critics of the administration have blamed Biden’s policies on oil exploration for domestic gas prices. However, the administration has countered by pointing to the numerous unused leases currently held by oil companies, and the disparity between declines in oil prices and lack of comparable drops in consumer gas prices.

— Updated at 6:47 p.m.