DOI Pushes for Higher Fees for Offshore, Onshore Oil and Gas Companies

A new Department of the Interior report on oil and gas leasing in federal lands and waters advises the DOI's Bureau of Land Management to raise royalties, rental rates, and other fees on oil and gas companies but has not moved to halt new leasing entirely.

In the days and weeks since the COP26 summit ended, the Biden administration has held the largest ever U.S. offshore drilling auction and released 50 million barrels of crude oil from the United States' emergency oil stockpile, the Strategic Petroleum Reserve.

The offshore auction came months after U.S. District Judge Terry Doughty ruled against the Biden administration's pause on new oil and gas leases on public lands and waters, finding that such auctions are mandatory under federal law.

The DOI report claimed the U.S. oil and gas leasing program "Fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers."

In addition to recommending higher onshore and offshore drilling fees, new screening procedures for bidders, and a "Fitness to Operate" standard for prospective offshore operators, the report states that the DOI's Bureau of Ocean Energy Management and Bureau of Safety and Environmental Enforcement would "Study the most appropriate method" to develop and apply pricing for methane, carbon dioxide, and nitrous oxide for offshore operators.

"We applaud the Biden administration for recognizing the serious flaws in the current oil and gas leasing program and making long-overdue reforms. But to truly tackle the climate crisis, we need to phase out all new leasing for fossil fuels on public lands and offshore-activities that contribute to nearly a quarter of this country's greenhouse gas emissions," said Sierra Club Lands Protection Program Director Athan Manuel.

"Now we know why the Biden Administration quietly dropped their 'Bleak Friday' Oil and Gas Leasing Report the day after Thanksgiving. It spells higher gas prices for hardworking families-while Biden bows to OPEC instead of producing cleaner, lower-cost American energy right here," wrote House Republican Whip Steve Scalise on Twitter.

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