The Current Administration Declares War on the U.S. Oil and Gas Industry

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.

Microsoft Copilot created this graphic with instructions to “draw a picture of oil pump jacks that have been destroyed.”

A few weeks ago, I wrote that the U.S. produced more crude oil in 2023 than any nation in a single year. This fact enraged the anti-fuel NGOs and other anti-fossil fuel activists, prompting the administration to ramp up their war on fossil fuels by releasing the “Fuel Mineral Leases and Leasing Process Rule” as a Friday surprise on April 12, 2024.

The Interior Department’s Bureau of Land Management rule attacked the U.S. oil and gas industry on multiple fronts with provisions designed to increase the cost of leasing federal lands for oil and natural gas development, including:

• increasing the minimum bond for oil and gas leases to $150,000 from $10,000.

• increasing to 16.7% from 12.5% the minimum royalties on oil and gas production on federal leases.

• increasing to $10 per acre from $2, the minimum bid on oil leases.

• increasing rental rates paid on federal leases over time, reaching $15 an acre after eight years.

Environmental advocates and conservation groups, like Earthjustice and Sierra Club, praised Friday’s new rule:

Earthjustice applauded the announcement and issued this statement:

This new rule should be regarded as a long overdue win for communities and the environment.

The administration’s Oil and Gas Rule is an important step toward correcting these long-standing problems and holding oil and gas companies accountable. We look forward to seeing BLM’s next steps toward tackling the climate impacts of federal oil and gas drilling.

The Sierra Club said:

These new regulations are the kind of common-sense reforms the federal oil and gas leasing program has needed for decades. The days of oil and gas companies locking up public lands for decades for pennies on the dollar and leaving polluted lands, water, and air in their wake are over.

The reforms announced by the Biden Administration are long-overdue, and will ensure that taxpayers get a fair return from the use of federal public lands while limiting harmful impacts to lands, wildlife, and community health.

The Independent Petroleum Association of America slammed the finalized rule in a statement, with executive Dan Naatz saying:

The final rule will not improve stewardship of federal lands, as BLM claims, but will have the effect of driving mineral production off of these areas. The regulatory environment has become so hostile to American oil and natural gas producers operating on federal land that it’s clear the Biden Administration intends for “multiple use” lands to only be used for conservation and recreation. The true losers with this misguided policy are states and localities that rely on revenues from federal land extractive industries to meet their budget obligations year after year. Rather than taking their mandate to be good stewards of federal land for the betterment of the American people seriously, the Biden Administration continues to ignore the people in local towns and communities across the West in order to placate a small group of environmentalists and to further reduce American oil and natural gas production.

My Take: As more polls show that the current president will likely lose the presidential election in November, the Biden administration is becoming increasingly desperate. It is releasing regulations and executive orders at a dizzying and dangerous pace, all designed to buy votes from the anti-fossil fuels NGOs and the climate brigade.

It is increasingly evident that the administration has adopted a “scorched earth” approach to the oil and gas industry because it has been unable to slow oil and gas production in the U.S., even with its over 200 regulations. They are now rushing to put into place as many as possible rules and regulations designed to hamper the U.S. oil and gas industry to the point of killing it. Luckily, time is not on their side, with the presidential election only seven months away. Even so, the destruction they can do in that short period could be enormous.

Hopefully, the economic destruction being unleashed on the U.S. economy will increase the likelihood of their being kicked out of office on January 20, 2025, and the recovery operation of the U.S. oil and natural gas industry and the economy can begin.

Thank you for reading “Thoughts about Energy and Economics.” This publication is reader-supported, so please “Like” it, share it with friends and colleagues, and become a paid subscriber. Your support is greatly appreciated!