WASHINGTON — The Biden administration said it will resume selling leases to drill for oil and gas on federal lands starting next week, but with a major reduction in the number of acres offered and an increase in the royalties companies must pay to drill.
The Interior Department announced that on Monday it will release a sale notice for leases to drill on 144,000 acres of government land — 80 percent less than what was initially being evaluated for potential leasing.
President Joe Biden, who on the campaign trail called for an end to drilling on federal lands, has been looking for ways to temporarily increase U.S. energy production to help drive down the price of gas. His administration has been under growing pressure to do more to lower gas prices, with Republicans in particular saying it should allow more drilling.
Industry experts say it would take at least six months to a year before new drilling on federal land would produce additional supply and ultimately bring down the cost of gas, which has emerged as a major midterm election issue.
The national average for a gallon of regular gasoline was $4.07 on Friday, down from $4.31 a gallon a month ago, according to the American Automobile Association.
Environmentalists immediately blasted the leasing announcement.
“Not only does it devastate our planet, it’s a handout to Big Oil at the expense of average Americans, who will bear the brunt of its societal, health and financial ramifications,” said Dan Ritzman, Lands Water Wildlife director at the Sierra Club, in a statement. “We urge the Biden administration to take advantage of this historic opportunity to make good on campaign promises, fulfill a global commitment to acting on climate, and serve American communities by phasing out oil and gas production on public lands and oceans.”
During the 2020 presidential campaign, Biden had urged a complete end to drilling for oil and gas on federal lands, but courts disagreed with his initial moratorium that he signed when he took office.
In late February, the administration said it was delaying decisions on new oil and gas drilling on federal land after a federal court blocked federal agencies from using an estimate known as the “social cost of carbon” to evaluate the damage done by carbon emissions stemming from energy production.
The Interior Department's announcement Friday drew criticism from the energy industry.
Jeffrey Eshelman, chief operating officer at the Independent Petroleum Association of America, accused Biden of putting out a “mixed message” on energy policy.
“This administration has begged for more oil from foreign nations, blames American energy producers for price gouging and sitting on leases,” Eshelman said in a statement. “Now, on a late holiday announcement, under pressure, it announces a lease sale with major royalty increases that will add uncertainty to drilling plans for years.”
Biden has taken steps in recent weeks designed to lower the price at the pump. In late March, he announced plans to release about 1 million barrels of oil a day from the Strategic Petroleum Reserve for six months to stem price hikes in what he called a “wartime bridge.” Last week, Biden unveiled plans aimed at boosting the production and sale of ethanol-blended gasoline.
On Friday, the Interior Department said the new leasing would come with a royalty rate of 18.75 percent, up from the previous 12.5 rate that critics complained was far lower than what energy companies pay to drill on most state lands.
“Today, we begin to reset how and what we consider to be the highest and best use of Americans’ resources for the benefit of all current and future generations,” Interior Secretary Deb Haaland said in a statement.
