The Department of the Interior issued a long-awaited report on Friday ordered by President Biden when he first took office when he paused leases to oil and gas contracts on federal lands citing concerns about climate change.
The report called for raising royalty rates for such leases on public lands, but stopped short of recommending an end to them completely as environmental activists have demanded.
A press release from the Interior said the report found “significant shortcomings in oil and gas leasing program,” and called for “significant reforms that should be made to ensure the programs provide a fair return to taxpayers, discourage speculation, hold operators responsible for remediation, and more fully include communities and Tribal, state, and local governments in decision-making.”
The report itself states that the royalty rates on federal oil and gas leases “have not been raised for 100 years,” noting that “states with leading oil and gas production apply royalty rates on State lands that are significantly higher than those assessed on Federal lands” and adding that the royalty rate charged by Texas, for instance, “can be double the federal rate.”
The Interior also wants to see a hike in bonding rates for companies engaged in the contracts, arguing that the levels have not been raised for 50 years.
But the proposal to raise royalty rates on oil and gas companies comes as Biden already faces enormous political heat over energy prices in the U.S., which have spiked more than 50% over the past year and had a large part in driving soaring inflation in the nation that is hitting Americans in their pocketbooks – and hitting Biden’s poll numbers.
“As expected, Interior’s oil and gas report is a complete climate failure,” tweeted Taylor McKinnon of environmental group Center for Biological Diversity. “Its cowardly reform ideas presume more oil and gas leases that our climate can’t afford. It abandons Biden’s promise to end new fossil fuel leasing and permitting.”
Prior to the report being released on Friday, McKinnon tweeted, “A Friday-after-Thanksgiving news dump would signal skulking shame. Get ready for climate failure in the Interior Department’s five-month-late report on the oil and gas program review.”