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Bureau of Land Management to resume new oil & gas lease sales | Environment

The Department of the Interior announced Friday it will resume the leasing of federal oil and gas reserves in nine states including Colorado. Details will be announced on Monday.

These will be the first leases on public lands since President Joe Biden issued an executive order one week after taking office shutting down new leases and ordering a review of the process.

The new leases will be made available on a drastically reduced scale. It will also begin charging companies royalties of 18.75%, up from the 12.5% rate that has been standard since at least 1920.

The move complies with a June 2021 ruling by the U.S. District Court for the Southern District of Louisiana, in a lawsuit issued by 13 states, not including Colorado, that ordered the Biden administration to resume leasing federal land. It also comes at a time when the administration is under pressure because of soaring prices at the gas pump. 

The new leases will be in Alabama, Colorado, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Utah and Wyoming. The Bureau of Land Management said it will not reveal exactly where the parcels are until the auction opens on Monday.

Biden told voters in February 2020, “And by the way, no more drilling on federal lands, period. Period, period, period.” 

The BLM said it examined 733,000 acres, or about 1,145 square miles of federal land energy companies had previously suggested should be leased.

On Monday BLM said it will offer only about 144,000 acres, some 225 square miles for sale. This is about 20% of the land BLM reviewed.

BLM also said it is increasing the royalty rate paid to the Treasury on extracted resources by 66%.

The Western Energy Alliance, which represents producers operating on federal lands, welcomed the Interior Department’s decision to resume sales “after violating the law for 15 months” but criticized the amended royalty rates and reduced acreage.

Lynn Granger, Executive Director of the American Petroleum Institute of Colorado noted, “Colorado’s energy resources are a long-term strategic asset that strengthens our national security and fuels our economy,”

Granger was less pleased with the change in royalties energy companies will have to pay and the relatively small amount of land opened up compared to what’s available.

“We are pleased to see the Interior Department finally announce a restart to the long-delayed onshore leasing program required under the law, but we are concerned that this action adds new barriers to increasing energy production, including removing some of the most significant parcels,” said Granger.

Environmental groups decried the move, saying even the reductions in acreage offered are insufficient to meet “our climate obligations.”

In a statement to the Denver Gazette, Earthjustice president Abigail Dillen said, “Any new leasing must meaningfully incorporate environmental justice and climate impacts…The best available science already shows that we cannot continue leasing on our public lands and meet President Biden’s stated climate goals.”

And Deborah McNamara, campaigns director at 350 Colorado, said,“It is unconscionable that the BLM will go forward with these oil and gas lease sales as we continue to see the devastating effects of climate change, particularly in the Southwestern United States.” 

Secretary of the Interior Deb Haaland called the new plans a “reset” of the leasing program that was overdue.

“For too long, the federal oil and gas leasing programs have prioritized the wants of extractive industries above local communities, the natural environment, the impact on our air and water, the needs of Tribal Nations, and, moreover, other uses of our shared public lands,” she said.

The only lease auctions during the Biden administration came late last year, when 80 million acres in the Gulf of Mexico went up for auction for drilling leases in compliance with the preliminary injunction issued by U.S. District Judge Terry A. Doughty June 15, 2021.

In asking for the preliminary injunction the 13 plaintiff states claimed that the Biden administration violated the federal Administrative Procedures Act and exceeded their statutory authority.

Judge Doughty agreed and issued the nationwide preliminary injunction saying, “This Court does not favor nationwide injunctions unless absolutely necessary. However, it is necessary here because of the need for uniformity. The Agency Defendants’ lease sales are located on public lands and in offshore waters across the nation. Uniformity is needed despite this Court’s reluctance to issue a nationwide injunction.”

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