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Onshore Oil and Gas Lease Sales to Resume

By NAM News Room

The Biden administration will restart some of the onshore oil and gas lease sales it had stopped. However, it will put less land up for auction and increase the amount producers must pay in federal royalties, according to POLITICO Pro (subscription) and the AP

What’s happening: “The lease sales … will include 173 parcels on about 144,000 acres, or about 20 percent of the area that had been nominated for energy-related lease sales and the overall acreage Interior analyzed for inclusion in potential sales, the department said in its announcement,” according to POLITICO Pro.

  • President Biden paused onshore sales shortly after taking office in 2021.
  • The move is part of the administration’s new push to expand domestic energy production amid still-high gas prices, according to the AP.

By the numbers: “The royalty rate for new leases will increase to 18.75% from 12.5%. That’s a 50% jump,” according to the AP.

  • “Interior will include the social cost of greenhouse gas emissions in its environmental analysis of the parcels up for auction, it said. … Environmental groups have pushed the Biden administration to rewrite the guidelines for lease sales to factor in the effect on climate change and to reduce the amount of federal land open to oil and gas drilling,” according to POLITICO Pro.
  • While all this will potentially raise prices for consumers even further, economists say that “a higher royalty rate would have a relatively small effect on global emissions, because any reductions in oil and gas from federal lands would be largely offset by fuel from other sources,” according to the AP.  

The NAM says: “Resuming oil and gas auctions is a no-brainer, but the hand that ‘gives’ is also taking away,” said NAM Vice President of Energy and Resources Policy Rachel Jones. “By reducing the areas available for leasing by 80% and increasing royalty costs by 50%, this move might actually raise energy costs. We can all agree that this is not the right time to make moves that increase inflation.”

  • “Continuing to limit access and increasing the cost to responsibly produce domestic energy resources will not address rising prices and sends harmful mixed messages to our recovering economy,” she continued.
  • “The NAM continues to ask the administration to partner with us to address current and future energy challenges. We must remove roadblocks to domestic energy production and build the energy infrastructure that safely delivers it to manufacturers and our allies around the world.”
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