Oil and gas companies would pay more to drill on public lands under new Biden rule
The Biden administration is proposing new rules for the nation’s oil and gas leasing program to raise costs for energy companies to drill on public lands and strengthen requirements to clean up old wells where drilling is completed or abandoned
WASHINGTON — Oil and gas companies would have to pay more to drill on public lands and satisfy stronger requirements to clean up old or abandoned wells under a new rule announced Thursday by the Biden administration.
A rule proposed by the Interior Department raises royalty rates for oil drilling by more than one-third, to 16.67%, in accordance with the sweeping climate law approved by Congress last year. The previous rate of 12.5% paid by oil and gas companies for federal drilling rights had remained unchanged for a century. The federal rate was significantly lower than what many states and private landowners charge for drilling leases on state or private lands.
The new rule does not go so far as to prohibit new oil and gas leasing on public lands, as many environmental groups have urged and as President Joe Biden promised during the 2020 campaign. But officials said the proposal would lead to a more responsible leasing process that provides a better return to U.S. taxpayers.
The plan codifies provisions in the climate law, known as the Inflation Reduction Act, as well as the 2021 infrastructure law and recommendations from an Interior report on oil and gas leasing issued in November 2021.
The new rule “provides a fair return to taxpayers, adequately accounts for environmental harms and discourages speculation by oil and gas companies,'' said Laura Daniel-Davis, principal deputy assistant Interior secretary for land and minerals management.
Interior «is committed to creating a
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