Biden Administration Calls for Ratcheting Up Oil Drilling Fees Despite Skyrocketing Gas Prices


The Biden administration on Friday suggested raising the rates for energy companies to drill for oil and natural gas on public lands amid rising fuel prices and after President Joe Biden tapped the country’s Strategic Petroleum Reserve just days before.

A report from the U.S. Department of the Interior cited climate concerns when recommending that companies pay more, as the federal government attempts to lower the price of fuel at the pump.

The report was ordered by Biden when he took office in January.

“The review found a Federal oil and gas program that fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers; inadequately accounts for environmental harms to lands, waters, and other resources; fosters speculation by oil and gas companies to the detriment of competition and American consumers; extends leasing into low potential lands that may have competing higher value uses; and leaves communities out of important conversations about how they want their public lands and waters managed,” the report said.

The report said the federal oil and gas program is harmful to the environment and called for royalty rates, bonding rates and other fees for energy companies to be raised.

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Companies drilling on federal land currently pay a minimum royalty rate of 12.5 percent. It was not immediately clear on Friday how raising rates for oil leases could work to lower gas prices.

On Tuesday, Biden ordered 50 million barrels of oil to be released from the strategic reserve.

“The bottom line: Today, we’re launching a major effort to moderate the price of oil — an effort that will span the globe in its reach and, ultimately, reach your corn — your corner gas station, God willing,” Biden said on Tuesday, according to a White House transcript. “I’ve worked hard these past few weeks in calls and meetings with foreign leaders, policymakers to put together the building blocks for today’s global announcement.”

“It will take time, but, before long, you should see the price of gas drop where you fill up your tank,” he said. “And in the longer term, we will reduce our reliance on oil as we shift to clean energy.”

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Biden also complained that oil prices had fallen, but said it was “unacceptable” that consumers had not seen much of a difference when they filled up their vehicles.

The president further said that higher gas prices are not related to his administration’s green energy initiatives.

“I also want to briefly address one myth about inflated gas prices: They are not due to environmental measures. My effort to combat climate change is not raising the price of gas or increasing its availability. It — what it is doing: It’s increasing the availability of jobs. Jobs building electric cars, like the one I drove at the GM Detroit — at the GM factory in Detroit last week,” he said.

He also touted fuel savings by people who drive electric vehicles.

The Interior Department’s suggestion to hike up the rate for drilling leases, along with Biden’s announcement he would tap into the country’s oil reserve, came the same week that Energy Department Secretary Jennifer Granholm admitted she had no idea how many barrels of oil Americans consume daily during a news briefing.

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Granholm, a green energy activist, was addressing reporters Tuesday when the revelation came to light.

The former Democratic Michigan governor was asked by a reporter, “How many barrels of oil does the U.S. consume per day?”

“I don’t have that number in front of me. Sorry,” Granholm responded.

The reporter pointed out that the number is somewhere around 18 million barrels, and that the administration’s decision to tap into the emergency reserve will flood the market with enough crude to cover roughly three days of crude used under normal circumstances.

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Johnathan Jones has worked as a reporter, an editor, and producer in radio, television and digital media.
Johnathan "Kipp" Jones has worked as an editor and producer in radio and television. He is a proud husband and father.