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Biden Raises Cost Of Domestic Oil Production With New Order On Federal Leases

Image CreditElMelindo / Flickr

‘This administration has decided to make leasing and production a political football, and Americans are paying the price at the pump.’


The Department of Interior announced in the early hours of Easter weekend the administration will be resuming oil and gas leases on federal lands after a federal judge ordered their resumption last summer. President Joe Biden suspended new federal oil and gas leases on public lands on his first day in office, actively suppressing production since his inauguration.

Roughly 144,000 acres will be auctioned off for drilling, an 80 percent drop from what was under evaluation, according to a department press release. The agency will also spike royalty rates 50 percent, from 12.5 percent to 18.75 percent of the extracted product’s value, rising prices for domestic production at a time Americans face the record bills at the pump.

Kathleen Sgamma, the president of the Denver-based industry trade group Western Energy Alliance, called the department’s changes to the federal oil and gas program a political play unlikely to reduce prices.

“While we’re glad to see [Bureau of Land Management] is finally going to announce a sale, the extreme reduction of acreage by 80 percent, after a year and a quarter without a single sale, is unwarranted and does nothing to show that the administration takes high energy prices seriously,” Sgamma said in a statement, adding the sales considered were already analyzed and approved under the Trump administration. “This administration has decided to make leasing and production a political football, and Americans are paying the price at the pump.”

Higher energy costs quickly ripple across the entire economy, raising the costs of goods in manufacturing and transportation. On Wednesday, the latest numbers from the Department of Labor revealed inflation at a 40-year high. Drilling on federal lands is already more expensive than on private land.

Larry Behrens, communications director for the energy non-profit Power the Future, said the timing of the administration’s announcement was no coincidence.

“There is a reason this announcement came just before the Easter holiday: it is another band-aid that won’t stop the bleeding from Joe Biden’s self-inflicted wound,” Behrens said. “This latest offering is an 80 percent reduction in available land coupled with a new oil tax thrown at producers to try and escape blame for soaring gas prices.”

Behrens warned the administration will amplify its claims of corporate price gouging once prices, inflated by 15 months of hostile White House regulation, fail to come down.

“When these policy peanuts offered by Washington don’t turn around massive gas prices or 40-year high inflation, the President will again try to blame energy workers for not producing enough,” Behrens told The Federalist. “You don’t reclaim American energy independence by giving only 20 percent, and America’s struggling families will continue to pay the price for Biden’s latest political stunt.”

Meanwhile Biden has tapped the nation’s emergency petroleum reserves to artificially bring down gas prices set by the market. The president ordered a release of about 1 million oil barrels a day over the next six months while also looking for alternatives to import more Canadian crude after banning the Keystone XL Pipeline on his first day in office. According to the Energy Information Administration (EIA), the United States consumes 20 million barrels of oil a day.