The Biden administration is considering raising the royalty rate that drilling companies must pay on oil and gas leases that it plans to sell in the first quarter, according to a draft notice posted but then removed from the U.S. Bureau of Land Management (BLM) website.
The royalty rate for leases offered this quarter would be 18.75%, up from the 12.5% minimum rate required by law, according to the post, which was viewed by Reuters on Jan. 31.
An Interior Department official said the notice had been posted inadvertently. “The BLM accidentally posted some pre-decisional draft language on their website,” the official said.
The post was later removed.
If the higher rate is finalized, the move would be in keeping with President Joe Biden’s pledge to reform oil and gas leasing on federal lands as part of his climate change agenda.
The administration is planning onshore lease sales in several states this quarter. Biden had paused drilling auctions after taking office, but that effort failed after producing states sued.
Last week, a court order invalidated an offshore lease sale in the Gulf of Mexico that the administration held in November, raising questions about the government’s plans to hold the onshore sales.
RELATED:
Chevron CEO ‘Disappointed’ by Recent Blow to US Offshore E&P Sector
Congress has mandated that the U.S. hold regular auctions of public lands for oil and gas development.
The federal drilling program has been a big source of public revenue for decades but has also drawn the ire of activists concerned about its impact on the environment and returns to taxpayers.
In a report on the federal oil and gas leasing program published late last year, Interior said the 12.5% rate had been in place for a century and was “out of step with modern times.”
Recommended Reading
CEO: Coterra ‘Deeply Curious’ on M&A Amid E&P Consolidation Wave
2024-02-26 - Coterra Energy has yet to get in on the large-scale M&A wave sweeping across the Lower 48—but CEO Tom Jorden said Coterra is keeping an eye on acquisition opportunities.
Buffett: ‘No Interest’ in Occidental Takeover, Praises 'Hallelujah!' Shale
2024-02-27 - Berkshire Hathaway’s Warren Buffett added that the U.S. electric power situation is “ominous.”
Aramco Reports Second Highest Net Income for 2023
2024-03-15 - The year-on-year decline was due to lower crude oil prices and volumes sold and lower refining and chemicals margins.
73-year Wildcatter Herbert Hunt, 95, Passes Away
2024-04-12 - Industry leader Herbert Hunt was instrumental in dual-lateral development, opening the North Sea to oil and gas development and discovering Libya’s Sarir Field.
EOG Resources Wildcatting Veteran Billy Helms to Retire
2024-04-02 - Joining an EOG Resources predecessor in 1981, Helms is among the pre-1986-oil-bust generation who later found success in shale.