US Interior Department Report Finds Significant Shortcomings in Oil & Gas Leasing Programs

Courtesy of the US Dept of the Interior.

WASHINGTON — The Department of the Interior yesterday released its report on federal oil and gas leasing and permitting practices, following a review of onshore and offshore oil and gas programs. The report identifies significant reforms that should be made to ensure the programs provide a fair return to taxpayers, discourage speculation, hold operators responsible for remediation, and more fully include communities and Tribal, state, and local governments in decision-making.

“Our nation faces a profound climate crisis that is impacting every American. The Interior Department has an obligation to responsibly manage our public lands and waters — providing a fair return to the taxpayer and mitigating worsening climate impacts — while staying steadfast in the pursuit of environmental justice,” said Secretary Deb Haaland. “This review outlines significant deficiencies in the federal oil and gas programs, and identifies important and urgent fiscal and programmatic reforms that will benefit the American people.”

The report completes the review of the federal oil and gas programs called for in Executive Order 14008 and focuses primarily on necessary reforms to the fiscal terms, leasing process, and remediation requirements related to the federal oil and gas programs.

The Interior Department is committed to modernizing its oversight of oil and gas leasing and development to help address the climate and biodiversity crises and to advance environmental justice. The Biden-Harris administration is actively developing a National Climate Strategy for how the nation will reduce greenhouse gas emissions to achieve net zero to address the climate emergency.

In order to restore balance to the programs, the Department’s report makes a number of specific recommendations, including adjusting royalty and bonding rates, prioritizing leasing in areas with known resource potential, and avoiding leasing that conflicts with recreation, wildlife habitat, conservation, and historical and cultural resources, all of which are consistent with pending congressional proposals.

The Department will continue to conduct appropriate outreach to stakeholders including state and local governments, Tribes, conservation and environmental justice communities, and industry and labor.

The Department conducted an extensive review of oil and gas development on public lands and waters following Executive Order 14008, including hosting a virtual public forum. The report reflects input received by the Department through robust engagement with state and local officials, members of Congress, and Tribes, as well as from a wide range of interests including the oil and gas industry, conservation groups, labor unions, Indigenous organizations, and the general public. The review also comes after years of the Government Accountability Office, the Department’s Office of Inspector General, and several congressional committees and members of Congress highlighting the need for meaningful modernization of the programs.