Blog: A Quick and Easy Update on Current Federal Oil and Gas Issues
On January 27, the Biden administration passed an executive order to tackle the climate crisis that included a pause on new oil and gas leasing. The pause was put in place to allow the Department of the Interior the opportunity to assess what lands are leased and why, as well as whether taxpayers are properly benefitting from oil and gas that are extracted from our public lands. The pause did not impact existing operations or leases, and did not apply to private lands.
For decades, the oil and gas industry has exerted far too much influence over the ways in which our public lands are managed. The review was long overdue, especially as the leasing program has not been updated in decades putting our communities, wildlife, water supplies, and air at risk.
Why the pause was necessary
To help address the impacts of climate change, in addition to protecting our communities, waterways, wildlife, and public lands, the pause was a step in the right direction. The current system does not serve these values. For example:
Orphan wells (which happen when oil and gas companies go bankrupt and abandon their projects) are often un-remediated. This is because oil and gas companies aren’t required to put down the funding necessary to clean up after themselves largely because of outdated federal bonding rates. This means that when these projects are abandoned, taxpayers are on the hook to pay for clean up or deal with impacts like contaminated water and polluted air.
Over 75% of lands that are tied up in leases in the West have a low potential for oil and gas, and little to no potential for oil and gas development. In addition to wasting taxpayer dollars, this limits access to lands that could otherwise be used for outdoor recreation and healthy wildlife habitat.
Oil and gas companies are charged less for development on our public lands than private landowners receive. Royalty rates must be updated by Congress so that taxpayers can receive their fair share.
Lands leased for oil and gas development are leased without competition, going for as little as $1.50 per acre, and most of those leases are never developed. Leasing these lands severs the opportunity for other outdoor uses and could also be costing tax payers.
Where are we now?
On June 15, a Louisiana judge struck down the pause, ruling that the Interior was “enjoined and restrained from implementing the pause of new oil and natural gas leases on public lands or in offshore waters.” The judge cited that there are federal laws requiring the Department of the Interior to issue leases. The ruling relied heavily on industry claims that have been discredited. This is concerning as future leasing decisions have the potential to spark new cases.
This is a clear example in the ways in which the multi-use mandate is preferential towards industry, and if this is central to BLM work, more must be done to balance the interests of all parties. You can read more about the details from the ruling here.
The Department of the Interior plans on complying with the ruling, and will continue to work on an interim report to be released later this summer that will include initial findings and recommendations to help improve stewardship of our public lands and waters, job development, and building a just and equitable energy future.
What you can do
Let your U.S. Senators and Representatives know that repairing our broken oil and gas leasing system must remain a priority.