The Biden administration on Friday finalized a rule that will make it more expensive for oil and gas companies to drill on public lands, despite soaring energy prices and inflation still trending upwards.
Under the new rule, the minimum royalty rate the government is paid will jump from 12.5% of revenue to 16.67%.
BLM will also preference land lease offers that are close to existing infrastructure or have a high potential for oil and gas production.
HOW IT STARTED… HOW IT’S GOING: ENERGY PRICES SOAR AS BIDEN PURSUES GREEN AGENDA Nevertheless, the U.S. oil and gas industry has flourished under President Joe Biden.
Prices climbed 3.5% from the same time last year, above the 3.2% figure recorded in February.
GET FOX BUSINESS ON THE GO BY CLICKING HERE Former President Trump has argued that inflation is directly linked to energy prices and has vowed to ramp up production if he gets elected to office.
“Remember this: Gasoline, fuel, oil, natural gas went up to a level that it was impossible,” Trump said at a campaign rally in January.
“That’s what caused inflation, and we’re going to bring it down because we’re going to go drill, baby, drill.”
In spite of skyrocketing energy costs and continuing inflation, the Biden administration on Friday finalized a rule that will increase the cost of drilling for oil and gas companies on public lands.
The Bureau of Land Management (BLM) has revised its oil and gas leasing regulations, bringing the federal onshore oil and gas leasing framework up to date and raising royalty rates for the first time in a century, according to a Department of the Interior announcement. The minimum royalty rate that the government receives under the new rule will increase from 12.5 percent of revenue to 16.67 percent.
Additionally, the action doubled the amount of bonds that companies needed to obtain before beginning drilling, from the $10,000 minimum bond required in 1960 to $150,000.
The Inflation Reduction Act already codified some of the provisions in the rule, including increasing the amount of rent the government charges oil companies to use its land and raising its share of the profits from that oil.
JAMIIE DIMON ADVISES OF INFLATION, SAYING RATES MAY REMAIN HIGH.
The rule, according to the Department of the Interior, will guarantee a fair and balanced approach to the development of the lands, give taxpayers a fair return, and assist in directing oil and gas development away from significant cultural sites and wildlife habitat.
Additionally, offers for land leases with a high potential for producing oil and gas or near existing infrastructure will be given priority by BLM.
Interior Secretary Deb Haaland declared, “These are the most significant reforms to the federal oil and gas leasing program in decades, and they will cut wasteful speculation, increase returns for the public, and protect taxpayers from being saddled with the costs of environmental cleanups.”.
“These reforms will help protect the health of our public lands and surrounding communities for future generations, in addition to the historic investments we are making through President Biden’s Investing in America Agenda to clean up orphaned oil and gas wells. “.”.
This action is a component of President Biden’s climate agenda, which aims to advance the U. s. move away from its dependency on fossil fuels and toward a future of renewable energy that emits no carbon.
HOW IT ORIGINATED. HOW IT’S GOING: AS BIDEN PURSUES GREEN AGENDA, ENERGY PRICES SOAR.
However, the U.S. S. Joe Biden has led to a boom in the oil and gas industry.
Oil producers around the world saw record profits after Russia invaded Ukraine and the sanctions that followed. The first three years of the Biden administration saw $410 billion in profits for the top five publicly traded oil companies, which are BO, Shell, Exxon, Chevron, and TotalEnergies. This is a 100% increase over the first three years of the Trump administration, according to Reuters data.
Meanwhile, for the third consecutive month, inflation picked up speed in March, keeping prices excruciatingly high for millions of Americans and probably postponing any Federal Reserve interest rate reductions.
A broad indicator of the cost of necessities like groceries, gas, and rent, the consumer price index increased by 0.4 percent in March over February, according to data released by the Labor Department on Wednesday. Prices increased by 3.5 percent from the same period last year, surpassing the 3.2 percent increase seen in February.
Assuming office, the former president Trump has pledged to increase production and has contended that energy prices directly affect inflation.
“Keep in mind that the price of gasoline, fuel, oil, and natural gas increased to an unachievable level,” Trump declared during a January campaign rally.
Drill, baby, drill is what’s going to bring inflation down, and that’s what caused it in the first place. “.”.
