The Biden administration is under fire for opening the door to selling new leases on public lands for oil and natural gas drilling but at a higher cost to producers, resulting in opposition from climate groups and the energy industry alike.
The Department of the Interior (DOI) announced Friday it was resuming fossil fuel lease sales for the first time since President Biden took office, a significant move that seeks to increase domestic energy production amid high prices at the pump.
However, it will take years for any new energy to be produced as a result, and federal royalties for drilling companies will be increased for the first time in a century from 12.5% to 18.75%. It will likely create billions in new revenue but infringes on then-candidate Biden‘s promise for no new federal drilling leases.
Advocates for aggressive action on climate change amounted the news to yet another example of the administration failing to achieve its environmental goals amid Mr. Biden’s stalled climate agenda in Congress. Meanwhile, the energy industry said the raise in leasing fees would disincentivize new drilling and was another case of mixed messaging from the administration on its energy policies.
DOI will auction off roughly 173 parcels on about 144,000 acres next week in nine states: Alabama, Colorado, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Utah and Wyoming. That amount represents an 80% reduction from the acreage originally nominated for leasing by energy companies, another point of criticism from the industry.
“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,” DOI Secretary Deb Haaland said in a statement Friday. “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.”
A DOI report from November 2021 noted an estimate that said the federal government lost out on up to $12.4 billion from 2010 through 2019 because royalties were too low and recommended an overhaul of the leasing program. An analysis of leases from 2003-2019 by the U.S. Government Accountability Office found that onshore oil and natural gas leases typically generate about $3 billion per year in revenues.
The announcement came late in the afternoon on Good Friday just two days before Easter Sunday, the timing of which critics suggested as intentional to minimize attention and scrutiny.
The decision is one that defies a key campaign pledge from Mr. Biden to end fossil fuel drilling on public lands to combat climate change, frustrating environmental activists and supporters within his own party that now question whether his promises to combat a warming planet will come to fruition.
“Allowing drilling on public lands won’t solve price gouging by oil companies. So why is @JoeBiden going back on his word?” tweeted Sunrise Movement, a political action group that advocates on climate change issues. “To stop the climate crisis, we need to move towards 100% renewable energy, not deepening our dependence on fossil fuels.”
Build Back Fossil Free, a coalition of over 1,100 advocacy groups that have called on Mr. Biden to declare a climate emergency and end the federal approval of new fossil fuel projects, laid into the president on multiple fronts. In a statement, the coalition said he “violated his promise” with “yet another handout to the fossil fuel industry,” adding that they “are tired of the excuses and inaction from this administration.”
“The reality is simple: they said they would act to curb the climate crisis, yet they fail to do so at every crucial opportunity that is presented to them,” Build Back Fossil Free said. “If Biden truly wants to help families and communities, he can use his executive authority to declare a climate emergency, end the federal approval of new fossil fuel projects, and deploy major investments in delivering 100% renewable energy for all.”
The energy industry, as well as its Republican allies on Capitol Hill, were also none too pleased, despite longtime calls to resume lease sales in an effort to ramp up production.
Jeff Eshelman, the chief operating officer of the Independent Petroleum Association of America, described the announcement as a “mixed message and strangely incoherent.”
“This administration has begged for more oil from foreign nations, blames American energy producers for price gouging and sitting on leases. 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,” Mr. Eshelman said. “To put it simply, America, under this administration, has no coherent energy policy.”
Sen. John Barrasso, Wyoming Republican and ranking member of the Senate Energy Committee, also offered a strong rebuke. He accused the Biden administration of “still doing all it can” to restrict energy production.
“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,” Mr. Barrasso said. “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.”