The Joe Biden administration will resume selling leases to drill for oil and gas on federal lands, only this time there will be a major reduction in the number of acres offered and an increase of royalties to be paid by companies.
The Interior Department announced that it will release a sale notice for leases on 144,000 acres of government land, 80 percent less that the initial evaluations for potential leasing.
New leasing would come with a royalty rate of 18.75%, up from the previous 12.5% rate. That’s a 50% jump and marks the first increase for the federal government since the rate was imposed almost 100 years ago.
President Biden suspended new leasing just a week after taking office in January 2021, however a federal judge in Louisiana ordered the sales to resume earlier this year. A response by environmentalist is expected next.
After calling for an end to drilling on federal lands during his campaign, President Biden now is looking to control high gas prices by increasing U.S. energy production. According to analysis it will take at least six months to increase supply and ultimately bring down the cost of gas.
With energy and commodities prices skyrocketing after Russia’s invasion to Ukraine controlling gas prices has become a priority for several governments who are fighting the highest inflation levels seen in decades.