An Oil Leasing Fig Leaf

The Biden Interior Department does the bare minimum to comply with a court order to allow lease sales on federal land

WSJ editorial. 

"In case you missed the Good Friday news dump, the Biden Administration plans to restart oil and gas leasing on federal lands this week. Or so its press release claims. The Administration as usual is restricting oil and gas development while pretending that’s not what it’s doing.

During his first week in office, President Biden ordered the Interior Department to halt oil and gas lease sales on federal lands. Federal judge Terry Doughty last June ruled the ban violated the Mineral Leasing Act, which requires the government to hold quarterly lease sales “for each State where eligible lands are available.” The judge ordered Interior to resume leasing.

Interior appealed while dragging its feet. Finally in November it held an offshore sale in the Gulf of Mexico. But months later another judge vacated the leases, quibbling that Interior didn’t calculate the potential greenhouse-gas emissions from oil produced from the leases that is consumed abroad. Interior didn’t appeal that ruling.

Energy companies threatened to seek another judicial order to compel Interior to hold an onshore lease sale this spring. Interior’s Friday announcement is an attempt to head off that effort. It says it will hold a sale for 173 parcels on roughly 144,000 acres of land. This is doing the least possible to comply with Judge Doughty’s ruling last summer.

This is two-thirds less land than the average during the Trump Presidency. Interior says it is “prioritizing the American people’s broad interests in public lands,” but the sale amounts to a mere 0.00589% of federal land. Americans have a significant interest in more domestic energy production. They don’t want to keep paying more than $4 a gallon for gasoline.

Interior also plans to increase the federal royalty rate for the first time to 18.75% from 12.5%, which it says will “ensure fair return for the American taxpayer and on par with rates charged by states and private landowners.” But the federal rate has long been lower in order to compensate for the more onerous federal permitting process.

The Administration took 182 days to issue a drilling permit last year compared with a few days for the state of Texas. Time carries a monetary value, and the leasing suspension has increased the cost of new investment. It’s hard to avoid the conclusion that Mr. Biden doesn’t want to increase U.S. oil and gas production. He wants to duck political responsibility for high energy prices."