Biden administration holds first onshore oil sales

By MATTHEW BROWN
Associated press

BILLINGS, Mont. (AP) – The U.S. government is holding its first auction of onshore oil and natural gas drilling concessions since President Joe Biden took office this week after a federal court blocked the administration’s attempt to suspend these sales due to climate change concerns.

Online auctions begin Wednesday and end Thursday. About 200 square miles (518 square kilometers) of federal lands have been offered for lease in eight western states. Most packages are in Wyoming.

The sales come as federal officials try to balance climate change efforts against pressure to bring down high gasoline prices.

Republicans want Biden to increase US crude production. But he is facing calls from within his own party to do more to reduce emissions from fossil fuels that are warming the planet.

A coalition of 10 environmental groups said in a lawsuit filed before the sales even began that they were illegal because officials acknowledged the impacts of climate change but proceeded anyway.

An immediate decision was not expected. Interior Department spokeswoman Melissa Schwartz said the agency has not commented on the dispute.

Starting with this week’s sales, the royalty rate for oil produced from new federal leases is rising from 12.5% ​​to 18.75%. That’s a jump of 50% and marks the first increase since the 1920s.

Packages are also offered in Colorado, Utah, New Mexico, Montana, Nevada, North Dakota and Oklahoma.

Hundreds of tracts of public land that companies were nominating for lease had previously been abandoned by the administration due to concerns about wildlife harmed by drilling rigs. Other packages covering about 19 square miles (49 square kilometers) were dropped off at the last minute in Wyoming due to potential wilderness impacts, officials said.

But attorney Melissa Hornbein of the Western Environmental Law Center said reductions in sales size were not enough.

“They hope that by choosing to hold sales in a smaller area, they are threading the needle. But from our perspective, climate science is the one thing that doesn’t lie,” Hornbein said.

Oil industry representative Kathleen Sgamma said the environmentalists’ lawsuit ignored the fact that US land lease sales are required under federal law.

“Public lands are managed in a balanced way. Balance is a word these groups don’t understand,” said Sgamma, president of the Denver-based Western Energy Alliance, which represents oil and gas companies.

Fossil fuels mined from public lands account for about 20% of energy-related greenhouse gas emissions in the United States, making it a prime target for climate activists who want to end leasing.

Biden suspended the new lease just a week after taking office in January 2021. A federal judge in Louisiana ordered sales to resume, saying interior officials had offered no ‘rational explanation’ for canceling them and that only Congress could do that.

The government held an auction of offshore leases in the Gulf of Mexico in November, although a court later blocked the sale before the leases were issued.

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Follow Matthew Brown on Twitter: @matthewbrownAP