Biden resumes lease sales of oil and gas on federal land while increasing royalties

BILLS, Mon. (AP) — The Biden administration is sharply increasing the rates of royalties that companies pay for oil and natural gas produced from federal states while it is continuing the sale of public reserves of fossil fuels in nine states under court orders progressing, Home Office officials said on Friday.

The announcement comes as Republicans are pressuring President Joe Biden to expand US crude oil production and curb higher gasoline prices, which are contributing to record inflation. Biden is also facing calls from within his own party to do more to curb emissions from fossil fuels that are driving climate change.

The royalty rate for new leases will increase to 18.75% from the current 12.5%. That’s a 50 percent increase and marks the first increase in government royalties in decades.

Leases for 225 square miles (580 square kilometers) of state land mostly in the west are put up for sale in a notice to be released Monday, officials said. That’s about 30% less land than officials had previously put up for sale in November and less than the industry originally nominated.

The sales announcements cover leasing decisions in nine states – Wyoming, Colorado, Utah, New Mexico, Montana, Alabama, Nevada, North Dakota and Oklahoma.

Interior Department officials declined to specify which states would have packages for sale or to give a breakdown of the amount of land by state, saying information would be included in Monday’s sales announcement.

Burning fossil fuels from public lands accounts for about 20% of energy-related U.S. emissions, making it a prime target for climate activists looking to end leasing.

Republicans want more drilling, saying it would increase US energy independence and help lower the cost of crude oil. However, oil companies have been reluctant to expand drilling as they are unsure how long high prices will last.

The land lease sales will be the first by the US Bureau of Land Management since Biden suspended them just a week after taking office in January 2021 as part of his plan to combat climate change.

The administration was ordered to resume sales last year by a federal judge in Louisiana, who said interior officials had not offered a “rational explanation” for the cancellation.

Hundreds of parcels of public land that companies had nominated for lease had previously been withdrawn from the upcoming lease sale due to concerns about oil rigs harming wildlife.