Business

Washington resumes leases for oil and gas wells on federal land

The U.S. government, under pressure to slash gas prices, announced on Friday that it would resume selling oil and gas well leases on federal land while imposing new conditions, including the first increase in royalties since more than 100 years.

Shortly after taking office in January 2021, President Joe Biden, who has made addressing climate change one of his campaign priorities, declared a moratorium on grants for new drill leases on state-owned land and water pending a review.

The Interior Department said in a statement that it will auction about 173 lots covering 144,000 acres (58,275 hectares) in nine states starting next week after several changes.

That is 80 percent less space than was intended for renting.

The government will also increase the royalties that companies pay heavily for extracted hydrocarbons from 12.5 percent – the rate that has been in effect for at least a century – to 18.75 percent of profits.

Companies interested in drilling must also meet new requirements, such as consulting with Native American tribes and adhering to the “best available science” when analyzing greenhouse gas emissions.

Texas Natural Gas Drill Pipes: The US government will resume selling oil and gas well leases on federal land, albeit on less land than expected and at a much higher royalty to energy companies Texas Natural Gas Drill Pipes: The US government will resume selling oil and gas well leases on federal land, albeit on less land than expected and at a much higher royalty to energy companies Photo: GETTY IMAGES NORTH AMERICA via AFP/SPENCER PLATT

“For too long, federal oil and gas leasing programs have put the needs of the extractive industries ahead of local communities, the natural environment, the impact on our air and water, and the needs of tribal nations,” said Home Secretary Deb Haaland, First Cabinet Secretary for Native Americans.

The move comes as the US President faces record inflation, particularly in gas prices, which is eroding his ratings.

He has taken initiatives to lower the price of crude oil in recent weeks, including an order in late March to release oil from the country’s strategic reserve.

However, the resumption of oil and gas concessions on federal land is unlikely to have an immediate impact, as the process can typically take several years.

The moratorium declared by Biden was put on hold by a judge in June 2021 because the administration had to get congressional approval for such a move.

A few weeks later, the government launched an auction of offshore leases in the Gulf of Mexico, which were then canceled by the Justice Department in January.

The Home Office also approved thousands of state oil and gas permits in 2021.

https://www.ibtimes.com/washington-resumes-oil-gas-drilling-leases-federal-land-3475893?utm_source=Public&utm_medium=Feed&utm_campaign=Distribution Washington resumes leases for oil and gas wells on federal land

Brian Ashcraft

TheHiu.com is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@thehiu.com. The content will be deleted within 24 hours.

Related Articles

Back to top button