If you think gas is too expensive right now just wait until you hear what the Democrats are up to.
A new report from the Department of the Interior (DOI) on oil and gas for federal lands and waters instructs the DOI’s Bureau of Land Management (BLM) to raise royalties, rental rates, and other fees on oil and gas companies.
During his 2020 presidential run, President Joe Biden’s campaign website claimed that his climate plan would include “banning new oil and gas permitting on public lands and waters.”
The DOI report (pdf), issued in response to Biden’s Jan. 27 executive order, was quietly published on Black Friday after months of delays. DOI Secretary Deb Haaland claimed in March that the report would be released in “early summer.”
Oil prices and gasoline prices have become a hot-button issue, with many blaming the Biden administration’s freeze on oil and gas leasing, shutdown of the Keystone XL pipeline, and other policies for helping to drive up those costs in recent months.
“So, begging OPEC+ for more supply, raiding our strategic reserve to try to lower prices at the pump, and now increasing leasing fees on U.S. producers. Yep, makes perfect sense—if you’re a Democrat,” wrote Dan K. Eberhardt, CEO of Canary, on Twitter in response to the DOI report.
In the days and weeks since the COP26 summit ended, the Biden administration has held the largest ever U.S. offshore drilling auction and released 50 million barrels of crude oil from the United States’ emergency oil stockpile, the Strategic Petroleum Reserve (SPR).
The offshore auction came months after U.S. District Judge Terry Doughty ruled against the Biden administration’s pause on new oil and gas leases on public lands and waters, finding that such auctions are mandatory under federal law.
Specifically, Doughty determined that the DOI is required to hold quarterly lease sales under both the Mineral Leasing Act (MLA) and the Outer Continental Shelf Lands Act (OCLSA).
Although the Biden administration claimed its 50 million gallon SPR release was motivated by a desire to “lower prices,” some analysts have argued that the release would not significantly impact oil prices.
Oil prices dropped following the late November emergence of the COVID-19 variant B.1.1.529, which the World Health Organization (WHO) dubbed “Omicron” on Nov. 26.
The DOI report claimed the U.S. oil and gas leasing program “fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers.”
In addition to recommending higher onshore and offshore drilling fees, new screening procedures for bidders, and a “Fitness to Operate” standard for prospective offshore operators, the report states that the DOI’s Bureau of Ocean Energy Management (BOEM) and Bureau of Safety and Environmental Enforcement (BSEE) would “study the most appropriate method” to develop and apply pricing for methane, carbon dioxide, and nitrous oxide for offshore operators.
The new report has already met with criticism from the oil and gas industry.
“During one of the busiest travel weeks of the year when rising costs of energy are even more apparent to Americans, the Biden administration is sending mixed signals. Days after a public speech in which the White House said the president ‘is using every tool available to him to work to lower prices and address the lack of supply,’ his Interior Department proposed to increase costs on American energy development with no clear roadmap for the future,” said Frank Macchiarola of the American Petroleum Institute (API), a key oil and gas trade association, in a statement.
The report prompted a mixed response from the Sierra Club, which endorsed Biden during his 2020 presidential campaign.
“We applaud the Biden administration for recognizing the serious flaws in the current oil and gas leasing program and making long-overdue reforms. But to truly tackle the climate crisis, we need to phase out all new leasing for fossil fuels on public lands and offshore—activities that contribute to nearly a quarter of this country’s greenhouse gas emissions,” said Sierra Club Lands Protection Program Director Athan Manuel.
The high price of gasoline is displayed at a Los Angeles gas station on November 24, 2021. - With inflation surging ahead of the Thanksgiving holiday, US President Joe Biden has drawn on the seldom-used Strategic Petroleum Reserve to combat rising oil prices that have fueled the recent spike. (Photo by Chris Delmas / AFP) (Photo by CHRIS DELMAS/AFP via Getty Images)