US finalizes higher fees for oil and gas companies on federal lands

Source: Reuters

April 12, 2024 1:49 PM EDT


April 12 (Reuters) - President Joe Biden's administration on Friday finalized a range of reforms designed to boost returns and address environmental harms from drilling on public lands, a move that will increase fees for oil and gas companies that operate there.

The new rules follow years of criticism from green and taxpayer groups that federal oil and gas development was not benefiting the public. Many of the changes by the Interior Department's Bureau of Land Management (BLM) formalize provisions in Biden's landmark climate change law, the 2022 Inflation Reduction Act (IRA).

Under the new policy, oil and gas companies will pay higher bonding rates to cover the cost of plugging abandoned oil and gas wells as well as increased lease rents, minimum auction bids and royalty rates for the fuels they extract. The rules also limit drilling in sensitive wildlife and cultural areas.

"These are the most significant reforms to the federal oil and gas leasing program in decades, and the will cut wasteful speculation, increase returns for the public, and protect taxpayers from being saddled with the costs of environmental cleanups," Interior Secretary Deb Haaland said in a statement. About 10% of the nation's oil and gas comes from drilling on federally owned land. An oil and gas industry trade group warned that higher costs to extract fuels from federal lands could boost U.S. reliance on foreign supplies.

Read more: https://www.reuters.com/business/energy/us-finalizes-big-reforms-federal-oil-gas-drilling-2024-04-12/