Drill Less, Pay More: White House Resumes Oil Leases--With A Catch

The Biden administration's latest response to high gas prices can be described as half-hearted at best. After begging OPEC nations to increase production to no avail, then tapping the Strategic Petroleum Reserves not once but twice, the administration is now resuming oil and gas leases on federal lands. But the plan comes with some heavy strings attached. The royalty rate on production will rise from 12.5% to 18.75%, and there will be less acreage available for drilling.

Oil and gas industry leaders have already met the plan's announcement with a massive eye roll. "We just keep seeing half-measures like this, and energy policy by soundbite," says David Holt, president of the Consumer Energy Alliance. "While the administration is not offering any meaningful solutions that could bring down prices."

Holt tells KTRH there are 'meaningful solutions' the administration could implement that would be effective. "There are a lot of (drilling) permits that could be issued right now, they could have a lease sale in the Gulf of Mexico which would immediately send strong market signals...they could approve pipeline permits," he says.

"There's a lot that could happen now, that would really send a signal to oil markets and would drive down global oil prices, but as of yet this administration has chosen not to take those pretty easy steps," Holt continues.

Also not helping the situation is the White House's constant bashing and blaming of the oil and gas industry. The president has accused oil companies of greed and price-gouging, while White House spokeswoman Jen Psaki criticized energy companies for not drilling on existing leases, an accusation the industry had to correct. "Rather than all of this finger pointing, it would be easier if the White House would work together with us on solutions for the American people," says Holt. "But instead, we're looking at $4 a gallon gasoline and $5 a gallon diesel fuel for the foreseeable future."

Photo: Gann, Brian (uploader)

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