Biden administration holding its first onshore oil, gas leases
Online auctions to be held Wednesday and Thursday
BILLINGS, Mont. — The U.S. government this week is holding its first onshore oil and natural gas drilling lease auctions since President Joe Biden took office after a federal court blocked the administration’s attempt to suspend such sales because of climate change concerns.
The online auctions start Wednesday and conclude Thursday. About 200 square miles of federal lands were offered for lease in eight western states, mostly in Wyoming. Parcels also are being offered in Colorado, Utah, New Mexico, Montana, Nevada, North Dakota and Oklahoma.
The sales come as federal officials try to balance efforts to fight climate change against pressure to bring down high gas prices.
Republicans want Biden to expand U.S. crude production, while he faces calls from his own party to curb fossil fuel emissions that are heating the planet.
Oil production in the U.S. has increased recently, but is still well below pre-pandemic levels, with companies hesitant to expand too quickly because of uncertainty over how long the high prices will continue.
A coalition of 10 environmental groups said in a lawsuit filed before the sales began that they were illegal because officials acknowledged the climate change impacts, but proceeded anyway.
Interior Department spokesperson Melissa Schwartz said the agency did not have a comment on the litigation.
Beginning with this week’s sales, the royalty rate for oil produced from new federal leases is increasing to 18.75% from 12.5%. That’s a 50% jump and is the first increase since the 1920s.
Hundreds of parcels of public land that companies nominated for leasing had been dropped previously by the administration because of concerns over harm to wildlife. More parcels covering about 19 square miles were dropped at the last minute in Wyoming because of potential
impacts on the wilderness, officials said. But attorney Melissa Hornbein with the Western Environmental Law Center said the reduced size of the sales was not enough.
“They are hoping that, by choosing to hold sales on a smaller amount of acreage, they are threading the needle. But, the climate science is the one thing that doesn’t lie,” Hornbein said.
Oil industry representative Kathleen Sgamma, president of the Denver-based Western Energy Alliance, which represents oil and gas companies, said the environmentalists’ lawsuit ignores the fact that lease sales from U.S. lands are required under federal law.
“Public lands are managed in a balanced manner. Balance is a word these groups don’t understand,” Sgamma said.
Fossil fuels from public lands account for about 20% of energy-related U.S. greenhouse gas emissions, making them a prime target for climate activists.
Biden suspended new leasing just a week after taking office in January 2021, but a federal judge in Louisiana ordered sales to resume, saying Interior officials had offered no “rational explanation” for cancelation, and only Congress could do so.
A court blocked the government’s offshore lease auction in the Gulf of Mexico in November before leases were issued.