House Democrats seek reform of federal lands drilling program

[March 02, 2021]    By Valerie Volcovici
 
 WASHINGTON (Reuters) - U.S. Democratic lawmakers in Congress on Tuesday introduced a set of bills to reform federal oil and gas leasing regulations, including by raising royalty rates and toughening cleanup requirements.

 Drilling rigs operate in the Permian Basin oil and natural gas production area in Lea County, New Mexico, U.S., February 10, 2019. REUTERS/Nick Oxford/File Photo

The bills would update decades-old laws governing oil and gas drilling to boost the program's value for taxpayers. While the proposals would not deliver on President Joe Biden's campaign promise to stop issuing new leases to fight climate change, they could be applied to existing leaseholders if passed into law.

Biden paused new leasing shortly after taking office to review the program, a move widely seen as a first step toward a permanent ban - drawing opposition from lawmakers in oil-producing states and the drilling industry. Some 25% of U.S. oil and gas production comes from federal lands and waters.

The bills stand a good chance of passing in the Democratic-controlled House of Representatives, but may have a harder time moving through the divided Senate. It is unclear if Biden would sign the measures into law.

One of the bills, introduced by Representative Katie Porter, the new chair of the House natural resources oversight committee, would raise royalty rates for onshore development from 12.5% to 18.75%, for example, and boost the minimum bid price for federal acreage from $2 per acre to $5.

Porter's bill also requires the interior secretary to evaluate royalty increases periodically.

Another bill, from Representative Diana DeGette, would set a target for the United States to reduce methane emissions from the oil and gas sector on federal land by 65% below 2012 levels by 2025, and 90% by 2030.

Another measure proposed by Representative Alan Lowenthal would increase the amount of money drillers set aside for cleanups, to ensure taxpayers aren't left with the bill.

Maria Handley, director of campaigns at The Wilderness Society, said the package of bills would make it harder for the oil industry to "call dibs on millions of acres of land and then do nothing with them."

Some 53% of onshore leased federal acreage, around 13.9 million acres, is nonproducing, according to the Interior Department.

(Reporting by Valerie Volcovici; editing by Jonathan Oatis)

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