On Friday, the Biden government recommended an overhaul of the country’s oil and gas leasing program to restrict areas available for energy development and increase prices for oil and gas companies to drill on public water and land. But, as several environmental groups urged, the Interior Department released the long-awaited report, which stops short of recommending an end to oil and gas leading on country’s public lands.
However, officials said the recent report would lead to a more responsible leasing procedure that offers a better return to American taxpayers. Interior Secretary Deb Haaland stated that the U.S. is facing an extreme climate crisis impacting every national. Further, she added that the new recommendations of the latest report would lessen the worsening impacts of climate change while staying persistent in the search for environmental justice.
In addition, the report finalizes a review ordered in this year’s first month by Biden, who called a halt in federal oil and gas lease sales in the initial days in office, mentioning worries about the climate crisis. The pause drew sharp criticism from Congressional Republican leaders and the oil industry, even as several Democrats and environmentalists said the president should make the leasing moratorium permanent.
Developers Must Pay 12.5% to Drill on Public Lands
Furthermore, the new report recommends rising federal royalty for oil and gas drilling, which has not been raised for hundred years. The national rate of 12.5 percent that developer companies must pay to drill on public lands is significantly less than in several states. Private property owners charge for drilling leases on private lands or on the state.
Moreover, the report said that the government should consider mounting bond payments that energy firms must set apart for future cleanup before drilling new wells. It adds, bond rates have not increased in decades. An interior Department agency, the Bureau of Land Management, should focus on leasing offers on moderate to high regions possible for oil and gas resources. And are also close to previous oil and gas infrastructure.
On Tuesday, the president ordered a record fifty million barrels of oil released from the strategic reserve of the United States, intending to drop-down gas prices amid deep concerns about inflation. According to the American Automobile Association, gasoline prices are around $3.40 per gallon, over fifty percent higher than one year ago. Oil prices plummeted around thirteen percent Friday as a new COVID-19 variant first detected in South Africa appeared to be spreading worldwide.