US will resume selling leases to drill for oil and gas
The US Bureau of Land Management (BLM) announced on Friday that it will resume selling oil and gas leases on federal lands, despite US President Joe Biden’s campaign-trail promise to end the practice. The move is a belated response to a 2021 court ruling, as well as an apparent effort to increase domestic fuel supply at a time when energy prices are near record highs across the US.
The BLM will only offer about 144,000 acres of government land for lease, 80% less than what the agency initially evaluated. It will also increase drilling royalties from 12.5% to 18.75%, the first such increase in decades.
The move complies with a ruling issued by the US District Court for the Southern District of Louisiana in June 2021 that required the government to resume granting leases on federal land. While the exact location of the new leases will not be revealed until they are auctioned by the BLM on Monday, they will be located in nine states: Alabama, Colorado, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Utah, and Wyoming.
The timing of the move appears to be aimed at bringing down the price of gasoline, which shot up to record high levels in response to the US and Europe’s heavy-handed sanctioning of Russia over the conflict in Ukraine. However, experts have suggested it would take as much as a year before any new drilling could produce enough additional supply to lower the cost of fuel, making any hope of leveraging lower gas prices for the midterm elections somewhat hopeless.
The announcement brought criticism from the oil industry, which accused Biden of sending mixed messages regarding energy policy. “This administration has begged for more oil from foreign nations, blames American energy producers for price gouging and sitting on leases,” Independent Petroleum Association of America COO Jeffrey Eshelman said in a statement on Friday. “Now, on a late holiday announcement, under pressure, it announces a lease sale with major royalty increases that will add uncertainty to drilling plans for years.”
The executive director of the American Petroleum Institute of Colorado, Lynn Granger, agreed, accusing the Biden administration of “add[ing] new barriers to increasing energy production, including removing some of the most significant parcels.”
Not only has the president outraged the energy lobby, he has also upset progressives within his own party, who have called him out for breaking a campaign promise to end drilling for oil and gas on federal lands. “No more drilling on federal lands, period. Period, period, period,” was his pledge to voters in February 2020, which quickly gave way to the approval of more drilling permits in 2021 than his predecessor, Donald Trump did in his entire first year in office, according to the Center for Biological Diversity.
With the official reopening of federal lands for drilling, green campaigners are despairing of the administration prioritizing the planet. Collin Rees, US program manager at Oil Change International, called the decision “an ugly betrayal of Joe Biden’s campaign promises and his administration’s rhetoric on environmental justice and climate action” in a statement issued by climate groups on Friday, while climate and energy program director for WildEarth Guardians Jeremy Nichols accused the administration of “talk[ing] a good talk on climate action” while being “in bed with the oil and gas industry.”
Oil giants Shell, Chevron, BP, and Exxon have cashed in handsomely under the Biden administration, raking in over $75.5 billion in profits in 2021, according to Accountable.US, and the companies have been making record profits as Western sanctions against Russia drive up prices at the pump.
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