Washington resumes oil and gas drilling leases on federal land

The US government, under pressure to lower gas prices, announced Friday it will resume the sale of leases for oil and gas drilling on federal lands while imposing new conditions, including the first hike in royalties in more than 100 years. 

Shortly after coming to office in January 2021, President Joe Biden, who has made fighting climate change one of his priorities during his campaign, had proclaimed a moratorium on grants for new drilling leases on government-owned land and waters, pending a review. 

The Interior Department said in a statement that starting next week, it will auction some 173 parcels representing 144,000 acres (58,275 hectares) in nine states after making several changes. 

That area is 80 percent less than had been under consideration for leasing. 

The administration will also increase the royalties companies much pay on hydrocarbons extracted 12.5 percent — the rate that had been in place for at least a century —  to 18.75 percent of profits.

Companies interested in drilling will also have to meet new requirements, such as consultation with Native American tribes and compliance with “best available science” for the analysis of greenhouse gas emissions. 

“For too long, the federal oil and gas leasing programs have prioritized the wants of extractive industries above local communities, the natural environment, the impact on our air and water, the needs of Tribal Nations,” said Interior Secretary Deb Haaland, the country’s first ever Native American cabinet minister.

The move comes as the US president faces down record inflation, especially in gas prices, which is eroding his ratings. 

He has been taking initiatives in recent weeks aimed at lowering the price of crude oil, including ordering at the end of March the release of oil from the country’s strategic reserve.

The resumption of concessions for oil and gas exploitation on federal lands, however, is not likely to have an immediate impact, as the process can generally taking several years. 

The moratorium declared by Biden had already been put on hold by a judge in June 2021 on the basis that the administration needed to obtain congressional approval for such a move. 

A few weeks later the government launched an auction of offshore leases in the Gulf of Mexico, which were then canceled by Justice Department in January. 

The Department of the Interior also approved thousands of oil and gas permits on federal lands in 2021.

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