Biden Admin Proposes New Rule To Jack Up Prices For Oil And Gas Leases

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Nick Pope Contributor
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The Biden administration unveiled a new oil and gas leasing rule proposal Thursday that would jack up prices at nearly every stage of the public land leasing process.

The Bureau of Land Management (BLM), a subagency of the Department of the Interior (DOI), issued the rule proposal Thursday in an effort to adopt a “more transparent, inclusive and just approach” to federal oil and gas leasing on public lands and “[provide] a fair return to taxpayers,” Principal Deputy Assistant Secretary for Land and Minerals Management Laura Daniel-Davis said, according to a Thursday DOI press release. The rule nominally aims to boost land conservation efforts, but it would do so by massively increasing minimum bid thresholds and required per-acre fees for energy interests and developers to pay.

The American Petroleum Institute slammed the rule proposal, calling it “yet another attempt to add even more barriers to future energy production” and “a concerning approach from an administration that has repeatedly acted to restrict essential energy development,” according to a Thursday press release.

Though the national average per-gallon gas price at the pump is down from its June 2022 high of about $5.15, the June 2023 price of nearly $3.82 is still substantially higher than the average price of $2.39 in January 2021, when the Biden administration came transitioned into power, according to data from the Bureau of Labor Statistics. (RELATED: ‘Catastrophic Consequences’: Top US Grid Official Sounds The Alarm On Coal And Gas Power Plant Closures)

The minimum required lease bond that developers must pay would jump from $10,000 to $150,000, and the required statewide bond would spike from $25,000 to $500,000, according to the rule proposal. The rule would also raise the minimum royalty fees that developers have to pay from 12.5% to 16.67%.

Additionally, the rule will boost the minimum per-acre leasing bid thresholds from $2 to $10 if finalized, with the minimum rising to match future inflation after 10 years. The rule proposal also seeks to impose yearly per-acre rental fees of $3 for two years, then $5 for the next 6 years and then $15 for every subsequent year after that.

To top it off, the rule will also charge prospective buyers or sellers a $5 per-acre fee for expressions of interest if finalized. “This proposal to update BLM’s oil and gas program aims to ensure fairness to the taxpayer,” BLM Director Tracy Stone-Manning said, according to the Thursday DOI press release.

“President Biden’s assault on affordable, available and reliable American energy knows no bounds,” Republican Wyoming Sen John Barrasso said of the proposal, according to a Thursday press release. “With the stroke of a pen, the Biden administration will put Wyoming oil and gas workers on the unemployment line.”

“This destructive and punitive rule will end up costing the taxpayers far more than it helps them,” he added.

As a candidate for the presidency in 2019, President Joe Biden delivered a personal “guarantee” that his administration would “end fossil fuels.” While BLM and DOI seek to make leasing more expensive for fossil fuel-related interests, the agencies have introduced other policies to cheapen and facilitate green energy development and conservation-related leasing under Biden.

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