Interior may make make oil, gas companies pay more to drill on federal lands; wouldn't affect home energy costs much

The Interior Department announced plans Friday to make oil and gas companies pay more to drill public lands and waters. The federal leasing program is outdated, fails to serve taxpayers, and worsens climate change, said an18-page report from the department.

"The document calls for increasing the government’s royalty rate — the 12.5 percent of profits fossil-fuel developers must pay to the federal government in exchange for drilling on public lands — to be more in line with the higher rates charged by most private landowners and major oil- and gas-producing states," Sarah Kaplan reports for The Washington Post. "It also makes the case for raising the bond companies must set aside for cleanup before they begin new development." Raising the royalty rate could generate between $1 billion and $2 billion a year annually, and wouldn't significantly impact energy prices for American households.

The report focuses on fiscal rather than environmental benefits of updating the law, but "Interior officials say they will also consider how to incorporate the real-world toll of climate change into the price of permits for new fossil fuel extraction," Kaplan reports. "Economic analyses suggest the changes to royalty and bonding rates will increase revenue, but they will not significantly curb carbon emissions." That's because "Less than 10 percent of oil and gas produced in the United States comes from Interior-controlled land, and cuts to U.S. production will be partly offset by increases in other countries."

Interested parties on both sides of the issue expressed dissatisfaction with the proposal. A representative of the American Petroleum Institute said it would increase the cost of production, Kaplan reports. Meanwhile, a spokesperson for the Center for Biological Diversity noted that one-third of Americans experienced a disaster driven by climate change this summer, and called for the Biden administration to end drilling on public lands rather than reform it.

The administration is under pressure to deliver on President Biden's campaign promises to protect the environment, especially after the recent United Nations climate agreement. "Even as he has come under criticism for not moving quickly or boldly enough to reduce the country’s greenhouse gas emissions, create jobs in a greener economy and alleviate pollution impacting poor and minority communities, Biden has continued to pursue swaths of his climate agenda," Juliet Eilperin, Brady Dennis and John Muyskens note for the Post. "Less than a year after taking the oath of office, Biden has now targeted half of Donald Trump’s energy and environmental policies." Click here for the Post's frequently updated list of the Biden administration's environmental actions.