The Department of the Interior announced on Friday that it would resume leasing federal oil and gas reserves in nine states, including Colorado. Details will be announced on Monday.
These will be the first leases on public land since President Joe Biden issued an executive order a week after taking office, closing new leases and ordering a review of the process.
The new leases will be made available on a significantly reduced scale. It will also start charging companies royalties of 18.75%, up from the 12.5% rate that has been the norm since at least 1920.
The move is consistent with a June 2021 ruling by the U.S. District Court for the Southern District of Louisiana, in a lawsuit brought by 13 states, not including Colorado, that ordered the Biden administration to resume leasing federal lands. . It also comes at a time when the administration is under pressure due to soaring prices at the gas pump.
The new leases will be in Alabama, Colorado, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Utah and Wyoming. The Bureau of Land Management said it would not reveal the exact whereabouts of the plots until the auction opens on Monday.
Biden told voters in February 2020, “And by the way, no more drilling on federal lands, period. Period, period, period.
The BLM said it reviewed 733,000 acres, or about 1,145 square miles, of federal land that energy companies had previously suggested should be leased.
On Monday, BLM said it would only offer about 144,000 acres, or some 225 square miles, for sale. This represents approximately 20% of the land reviewed by BLM.
BLM also said it was increasing the royalty rate paid to the Treasury on mined resources by 66%.
The Western Energy Alliance, which represents producers operating on federal lands, welcomed the Interior Department’s decision to resume sales “after breaking the law for 15 months” but criticized the changed royalty rates and the reduced area.
Lynn Granger, Executive Director of the American Petroleum Institute of Colorado, said, “Colorado’s energy resources are a long-term strategic asset that strengthens our national security and fuels our economy.
Granger was less pleased with the evolution of royalties that energy companies will have to pay and the relatively small amount of open land compared to what is available.
“We are pleased to see the Home Office finally announce a restart of the long-delayed legally required shore lease program, but we are concerned that this action will add further hurdles to increased energy production, including removing some of the larger plots,” says Granger.
Environmental groups have decried the move, saying even the acreage reductions offered are insufficient to meet “our climate obligations”.
In a statement to the Denver Gazette, Earthjustice President Abigail Dillen said, “Any new lease must meaningfully integrate environmental justice and climate impacts…The best available science already shows that we cannot continue to lease on our public lands and meet the climate goals declared by President Biden. ”
And Deborah McNamara, Director of Campaigns at 350 Colorado, said, “It is unconscionable for the BLM to move forward with these oil and gas lease sales as we continue to see the devastating effects of climate change, especially in the southwestern United States.”
Interior Secretary Deb Haaland called the new plans a “reset” of the leasing program that had been lagging behind.
“For too long, federal oil and gas leasing programs have prioritized the needs of the extractive industries above local communities, the natural environment, the impact on our air and water, the needs tribal nations and additionally other uses of our shared public lands,” she said.
The only lease auctions under the Biden administration took place late last year, when 80 million acres in the Gulf of Mexico were auctioned off for drilling leases in accordance with the preliminary injunction issued by U.S. District Judge Terry A. Doughty on June 15, 2021.
In seeking the preliminary injunction, the 13 state plaintiffs claimed that the Biden administration violated federal administrative procedures law and exceeded their legal authority.
Judge Doughty agreed and issued the nationwide preliminary injunction saying, “This Court does not favor nationwide injunctions unless absolutely necessary. However, it is necessary here due to the need for uniformity. The agency’s defendant lease sales are located on public lands and in offshore waters across the country. Uniformity is necessary despite the reluctance of this Court to issue a national injunction.