Biden Administration Suggests Increasing Royalty Rates On Federal Oil, Gas Leases - Report

Biden Administration Suggests Increasing Royalty Rates on Federal Oil, Gas Leases - Report

WASHINGTON (UrduPoint News / Sputnik - 26th November, 2021) The US Department of the Interior on Friday issued a report suggesting that royalty rates for the Federal government's onshore oil and gas leases should be increased.

"The BLM (Bureau of Land Management) should improve the return to taxpayers and create an oil and gas program that is more consistent with BLM's multiple-use and sustained yield mandates," the report said. "Consideration should be given to raising royalty rates and, to the extent allowed by statute, to increasing the current minimum levels for bids, rents, royalties and bonds."

US President Joe Biden issued an executive order in January that directed the Department of Interior to conduct a review of federal oil and gas leasing and permitting practices.

The Interior Department report also suggests increasing safety and and environmental regulations on oil and gas companies by requiring them to meet a new criteria before they are allowed to operate in US offshore drilling sites.

Moreover, the Interior Department said it wants to end the practice of issuing bids for vast swaths of territory on the US continental shelf and instead move to a leasing model where smaller areas are offered. The department claims the federal government loses billions in revenue when vast offshore drilling sites are leased.

In addition, the Interior Department also suggests the BLM should avoid leasing land with low potential and prioritize issuing leases in areas with moderate or high potential for oil and gas resources as well as facilitate more meaningful engagement with Tribal communities when it seeks public input in the leasing and permitting process, the report said.

The report noted that as of September, the oil and gas industry has more than 9,600 approved permits that are available to drill. In fiscal year 2021, BLM approved more than 5,000 drilling permits and more than 4,400 are still being processed.