Learn more about Hart Energy Conferences
Get our latest conference schedules, updates and insights straight to your inbox.
The U.S. Interior Department this week will hold its first onshore oil and gas auctions since President Joe Biden took office, a setback to his administration's early efforts to end federal drilling to fight climate change.
The lease sales will run June 29-30 and will cover more than 140,000 acres (570 sq km) across eight Western states, posing a test of the drilling industry's demand for new prospects at a time of soaring global energy prices.
Over 90% of the acreage will be in big oil producing state Wyoming, with the rest sprinkled across Colorado, Montana, Nevada, New Mexico, North Dakota, Oklahoma and Utah.
A federal judge last year effectively compelled the auctions by blocking the Biden administration’s decision to suspend the federal oil and gas leasing program over its climate impacts.
Biden had campaigned on a promise to end federal drilling to fight global warming, but has since urged oil producers to rapidly ramp up output to help consumers suffering from record prices at the pumps.
The Interior Department had held an offshore drilling auction late last year, but a different federal judge annulled that sale saying the administration failed to properly factor climate change into its analysis—a clashing legal signal that underscores how contentious the program has become.
Biden’s Interior Department initially proposed 340,000 acres for this week's auctions, but gradually removed parcels it said were too environmentally sensitive.
The Department will also require companies to pay royalties of 18.75% on production from the acreage, up from the 12.5% in place for decades.
This week’s auctions are a fraction of the size of those held under former President Donald Trump, a major supporter of the fossil fuel industry. Trump’s Interior Department offered 26 million acres to drillers over four years.
In 2021, federal lands accounted for nearly 10% of U.S. oil and gas production.
Recommended Reading
Phillips 66 Explores Sale of Pipeline Stake Worth Over $1B, Sources Say
2024-03-26 - The Rockies Express Pipeline is a 2730-km interstate natural gas pipeline stretching from Wyoming and Colorado in the West to Ohio.
Matador Completes NatGas Connections in Delaware Basin
2024-03-25 - Matador Resources completed natural gas pipeline connections between Pronto Midstream to San Mateo Midstream and to Matador’s acreage in the Delaware Basin.
Summit Midstream Sells Utica Interests to MPLX for $625MM
2024-03-22 - Summit Midstream is selling Utica assets to MPLX, which include a natural gas and condensate pipeline network and storage.
Enbridge Fortifies Dominant Role in Corpus Christi Crude Transport
2024-03-20 - Colin Gruending, Enbridge executive vice president and president for liquids pipelines told Hart Energy the company’s holdings in South Texas are akin to a “catcher’s mitt” for Permian and Haynesville production.