The Biden administration has implemented a final rule that will require oil and gas companies to pay higher fees for drilling on public lands and adhere to stricter guidelines for cleaning up old or abandoned wells. This move comes as part of efforts to align with the 2002 climate law, which mandates a royalty rate increase for oil drilling to 16.67% from the previous 12.5% that had been in place for a century.
While the new rule does not outright ban new oil and gas leasing on public lands, it aims to establish a more responsible leasing process that offers better returns to U.S. taxpayers. The Interior Department's decision is based on provisions outlined in the Inflation Reduction Act, the 2021 infrastructure law, and recommendations from a 2021 report on oil and gas leasing.
