The Biden administration on Friday proposed an overhaul of America’s oil and gas leasing-program to limit areas available for energy development and raise costs for oil and gas companies to drill on public land and water.
A report released by the Department of Interior is seen as a step to an end to oil and gas leasing on public lands, as many environmental groups have urged.
In the statement released by Interior Secretary, Deb Haaland, “Our nation faces a profound climate crisis that is impacting every American.″
President Joe Biden had ordered a review in January, to facilitate a pause in federal oil and gas lease sales in his first days in office, citing worries about climate change.
The moratorium drew sharp criticism from congressional Republicans and the oil industry, even as many environmentalists and Democrats said Biden should make the leasing pause permanent.
The new report seeks a middle ground that would continue the multibillion-dollar leasing program while reforming it to end what many officials consider overly favorable terms for the industry.
The report recommends hiking federal royalty rates for oil and gas drilling, which have remained unchanged for 100 years. The federal rate of 12.5% that developers must pay to drill on public lands is significantly lower than many states and private landowners charge for drilling leases on state or private lands.
Biden on Tuesday ordered a record 50 million barrels of oil released from America’s strategic reserve, aiming to bring down gas prices amid concerns about inflation. Gasoline prices are at about $3.40 a gallon, more than 50% higher than a year ago, according to the American Automobile Association.
Energy companies including Shell, BP, Chevron and ExxonMobil offered a combined $192 million for offshore drilling rights in the Gulf, highlighting the hurdles Biden faces to reach climate goals dependent on deep cuts in fossil fuel emissions.
The leases will take years to develop, meaning oil companies could keep producing crude long past 2030, when Biden has set a goal to lower greenhouse gas emissions by at least 50%, compared with 2005 levels.
Emissions from burning and extracting fossil fuels from public lands and waters account for about a quarter of U.S. carbon dioxide emissions, according to the U.S. Geological Survey.
Environmentalists hailed the report’s recommendation to raise royalty rates, but some groups said the report falls short of action needed to address the climate crisis.
“Today’s report is a complete failure of the climate leadership that our world desperately needs, ″ said Taylor McKinnon of the Center for Biological Diversity, an environmental group.
The report “presumes more fossil fuel leasing that our climate can’t afford” and abandons Biden’s campaign promise to stop new oil and gas leasing on public lands, McKinnon said.
