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Biden administration to resume leasing for oil and gas drilling on federal lands


U.S. president Joe Biden spoke as he visited North Carolina Agricultural and Technical State University (Greensboro, North Carolina), U.S.A. on April 14, 2022.

Reuters| Reuters

It 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.

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President Joe BidenOn the campaign trail, he called for the end of drilling on federal lands. He has since been exploring ways to increase U.S. energy production temporarily to drive down gas prices.

It comes as the Biden administration is under increasing pressure to lower gas prices. Republicans are particularly vocal about their desire to allow drilling to continue.

Experts in the industry estimate that it could take between six and a whole year to get new drilling permits on federal land. The goal is to increase supply, lower gas prices, which have become a key issue during midterm elections.

However, Friday’s announcement is sure to upset environmentalists. Biden, during his 2020 campaign for the presidency, had called for an end to oil and gas drilling on federal lands. However, courts disagreed with Biden’s initial moratorium he signed in January when he was elected.

Late February saw the administration delay decisions about new oil and natural gas drilling on federal lands. Federal court had stopped federal agencies using the estimate of the “social costs of carbon” (to assess the carbon emission damage from energy production) in late February.

Friday’s Interior Department statement stated that new leasing will come with an 18.75 percent royalty rate. This is up from 12.5, which critics said was lower than what oil companies paid to drill in most states.