With US oil production reaching historic levels in 2023, the administration is trying to destroy the oil and gas industry to score points with anti-fossil fuels NGOs and climate activists.
Ed, 3 of the 4 increases are not unreasonable, because they are just catching up with inflation after no change for many decades. It's the 2nd one, "increasing to 16.7% from 12.5% the minimum royalties on oil and gas production on federal leases" that is oppressive, because the 12.5% was already keeping up with inflation. That's what percentages do. This is the hidden bomb in the order. Since it's a percentage, and not a fixed dollar amount, it will take a huge new chunk out of oil profits, under the guise of slipping in among the other, sensible changes.
I agree, Al. Your description of the drastic increase in royalties as being oppressive is right on. That increase shows that the true objective of the Biden Administration is to stop drilling on federal land. The majors may be able to handle it, but smaller operators are priced out of the market. That can be undone by a future administration. Ed
Ed, 3 of the 4 increases are not unreasonable, because they are just catching up with inflation after no change for many decades. It's the 2nd one, "increasing to 16.7% from 12.5% the minimum royalties on oil and gas production on federal leases" that is oppressive, because the 12.5% was already keeping up with inflation. That's what percentages do. This is the hidden bomb in the order. Since it's a percentage, and not a fixed dollar amount, it will take a huge new chunk out of oil profits, under the guise of slipping in among the other, sensible changes.
I agree, Al. Your description of the drastic increase in royalties as being oppressive is right on. That increase shows that the true objective of the Biden Administration is to stop drilling on federal land. The majors may be able to handle it, but smaller operators are priced out of the market. That can be undone by a future administration. Ed