Elections Have Consequences

The White House is looking to raise the royalty rates on fossil fuel extraction on government lands for the first time since the 1920s.

I'd prefer that they be banned, but this is a good start:.

The Biden administration on Thursday proposed a rule that would raise the royalties that fossil fuel companies pay to pull oil, gas and coal from public lands for the first time since 1920, while increasing more than tenfold the cost of the bonds that companies must pay before they start drilling.

The Interior Department estimated that the new rule, which would also raise various other rates and fees for drilling on public lands, would increase costs for fossil fuel companies by about $1.8 billion between now and 2031. After that, rates could increase again.

About half of that money would go to states, approximately a third would be used to fund water projects in the West, and the rest would be split between the Treasury Department and Interior.

………

Some of the changes were mandated by the 2022 Inflation Reduction Act, which directs the Interior Department to increase the royalty rates paid by companies that drill on public lands to 16.67 percent from 12.5 percent, and to increase the minimum bid at auctions for drilling leases to $10 per acre from $2 per acre, among other provisions. The 12.5 percent royalty rates have been in place since 1920.

………

But the Interior Department’s new rule would go even further than Congress required: It would dramatically raise the cost of the bonds that companies must guarantee to pay to the federal government before drilling on public lands, which has not increased since 1960. The department wants to use those funds to remediate damage left by abandoned uncapped oil and gas wells, so that the cost is borne by companies rather than taxpayers.

The Biden administration has been too friendly to resource extraction interests in general, and energy companies in particular, but this is a welcome change.

It also has the advantage of being a big f%$# you to corrupt faux Democrat Joe Manchin.