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U.S. shale was arguably the…

U.S. Govt. Says Federal Land Drilling Program Is “Broken”

The federal program that grants companies the right to drill for oil and gas on federal land is “fundamentally broken” and will be reviewed, according to Interior Secretary Deb Haaland.

One of the primary flaws of the program, according to Haaland, is that those federal lands belong to more than just the oil and gas industry—they belong to everyone.

“The American taxpayers deserve to have a return on their investment,” Haaland said. It is not immediately clear to what investment Haaland is referring.

 “They don’t just belong to one sector or one industry. They belong to the outdoor economy, they belong to the kids who take their first breath, on a hike out on a trail. They belong to everyone, and it’s our job to make sure that every voice is heard with respect to how we manage those lands.”

The new administration paused the federal drilling rights program shortly after taking office while it gave a long, hard look at the program. The administration has been stressing the “pause” aspect of their action, steering clear of any impression that the ban would be permanent.

The Interior Department still has another couple of weeks to accept comments on the matter, and isn’t expected to have its interim analysis of the program complete until sometime this summer. And that’s just the point where it is expected to have recommendations.

Haaland said that “changes could be needed to address climate exchange and ensure taxpayers get a greater value from extracted oil and gas.”

Those words suggest indeed that the program will not be deep-sixed, but rather that the government is looking for more royalty money when it issues drilling rights.

Perhaps those higher royalty payments will partially fund the major infrastructure package that President Biden recently proposed.

By Julianne Geiger for Oilprice.com

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  • Fedmahn Kassad on April 03 2021 said:
    So we get these words- "changes could be needed to address climate exchange". Interesting. Was 'exchange' a typo or a new part of the language of the party of the Green New Deal?

    Maybe, though, it all comes down to money. Not that I have a problem with the government getting a reasonable return for drilling leases. We know the money for the Infrastructure stimulus and the inevitable follow-on spending packages has to come from somewhere.

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