Why Biden’s Court-Ordered Resumption Of Oil And Gas Leases Won’t Bring Down Prices
By: Tristan Justice
April 21, 2022
The White House begrudgingly approved the resumption of oil and gas leases on federal lands in the early hours of Easter weekend Friday after a 15-month suspension was implemented on President Joe Biden’s first day in office.
The suspension of federal lease sales immediately suppressed oil and gas production and chilled investment in the capital- and labor-intensive industry. Production dropped from more than 11,000 barrels of crude per day the month Biden took office to nearly 9,800 in February 2021, according to the Energy Department.
Operators require new drilling prospects long before committing billions in capital to explore a particular area without fear of interruption. The resumption of leasing only comes after a federal judge overturned the president’s order last summer.
Friday’s announcement also comes with a catch. Only about 144,000 acres will be auctioned off for drilling, an 80 percent drop from what was under evaluation, according to a press release from the Department of Interior. The federal government will also spike royalty rates 50 percent, from 12.5 percent to 18.75 percent of the extracted product’s value, again increasing prices for domestic production at a time Americans face the record bills at the pump.
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https://thefederalist.com/2022/04/21/why-bidens-court-ordered-resumption-of-oil-and-gas-leases-wont-bring-down-prices/
