As energy prices soar, Biden administration jacks up costs to drill on public lands

The Biden administration on Friday finalized rules that would make it more expensive for oil and gas companies to drill on public lands, even as energy prices and inflation remain on the rise.

The Department of the Interior announced revised Bureau of Land Management (BLM) oil and gas leasing regulations, increasing royalty rates for the first time in 100 years and updating the federal onshore oil and gas leasing framework. Under the new rules, the minimum royalty rate paid to the government will jump from 12.5% ​​of revenue to 16.67%.

The measure also increased the amount of bonds companies must secure before drilling began tenfold, from the minimum bond set in 1960 of $10,000 to $150,000.

Some of the rules’ provisions have already been codified in anti-inflation laws, such as increasing the rents the government charges oil companies for land use and increasing the government’s share of profits from that oil. .

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The Department of the Interior says the rule ensures a balanced approach to land development, provides fair returns to taxpayers, and keeps oil and gas development away from important wildlife habitat and important cultural heritage sites. said it was helpful.

BLM will also prioritize land lease offers that are close to existing infrastructure or have high potential for oil and gas production.

“These are the most significant reforms to the federal oil and gas leasing program in decades, reducing wasteful speculation, increasing returns to the public, and protecting taxpayers from the cost of environmental cleanup,” said Secretary of the Interior Deb Haaland. “It will protect us from the burden,” he said. .

“Along with historic investments to clean up orphaned oil and gas wells through President Biden’s American Investment Agenda, these reforms will ensure the health of our public lands and neighboring communities for generations to come. It will help protect you.”

The move is part of President Biden’s climate plan to wean the United States off its dependence on fossil fuels and move toward a carbon-free, renewable energy future.

Inflation continues to rise in the US (Spencer Pratt/Getty Images/Getty Images)

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Nevertheless, the US oil and gas industry has flourished under President Joe Biden.

Oil producers around the world posted record profits in the wake of Russia’s invasion of Ukraine and subsequent sanctions. Profits for the top five publicly traded oil companies (BO, Shell, Exxon, Chevron, and Total Energy) reached $410 billion in the first three years of the Biden administration, an increase of $100 billion compared to the first three years of President Donald Trump. % increase. According to data compiled by Reuters.

Meanwhile, inflation accelerated for the third month in a row in March, leaving prices painfully high for millions of Americans and likely delaying any rate cuts by the Federal Reserve.

The Labor Department said Wednesday that the consumer price index, which measures the prices of daily necessities including gasoline, food and rent, rose 0.4% in March from the previous month. Prices rose 3.5% year-on-year, exceeding the 3.2% recorded in February.

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President Joe Biden wants to wean the United States off fossil fuels. (SAUL LOEB/AFP via Getty Images/Getty Images)

Former President Trump claims that inflation It is directly tied to energy prices, and he has vowed to expand production if elected president.

“Remember this: Gasoline, fuel, oil and natural gas have risen to impossible levels,” President Trump said at a campaign rally in January.

“That’s what caused the inflation and we’re going to continue to train so we’re going to bring the inflation down.”

Fox Business’ Megan Henney and Reuters contributed to this report.