The Biden administration has proposed new rules that would make oil and gas leasing on public lands more expensive for developers.
The proposed rules, unveiled by the Department of the Interior and Bureau of Land Management, revise a number of financial requirements for onshore fossil fuel leasing including bonding requirements, royalty rates and minimum bids. The administration explained the changes would increase taxpayer returns, while disincentivizing speculators or "less responsible actors."
Under the proposal, the lease bond oil and gas developers are required to pay will be hiked from $10,000 to $150,000 and statewide from $25,000 to $500,000, the DOI said. The DOI said the current bonding requirements, established in 1960, are outdated and don't cover potential federal costs to reclaim a well if companies don't meet reclamation requirements.
The proposal also includes an annual rental fee of $3 per acre for the first two years, $5 per acre for the following 6 years and $15 per acre for every following year. Finally, the rules would codify a new fee of $5 per acre for expressions of interest.
Republicans and fossil fuel industry groups are blasting it for introducing new barriers to domestic oil and gas production.
"Responsible development of federal lands is critical for meeting the growing demand for affordable, reliable energy while reducing emissions," Holly Hopkins, the vice president of upstream policy at the American Petroleum Institute, said in a statement.