The Interior Ministry released a report on Friday proposing to “modernize” the federal oil and gas program by charging fossil fuel companies more money for drilling in public land and in public waters.

The department’s review found that the fiscal components of the current state oil and gas program on land “are particularly out of date, with royalties not increasing in 100 years,” referring to the 12.5% ​​rate the federal government has put in place fossil fuel companies billed for oil and gas extracted from public land and public offshore waters.

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“States with leading oil and gas production apply license fees to state land that are significantly higher than those estimated on the state,” the report said. “The Texan license rate, for example, can be twice the federal rate.

“Likewise, the level of loyalty has not increased in 50 years,” it said. “Federal bids and rents have been the same for over 30 years. These antiquated approaches harm not only federal taxpayers but also state budgets because the states receive a significant portion of the federal oil and gas revenues.”

The ministry said that in addition to increasing license fees and binding rates, the federal government should prioritize leases in areas with known resource potential and avoid leases that “conflict with recreation, wildlife habitats, nature conservation, and historical and cultural resources.”

The report concluded that the current program “does not provide taxpayers with adequate returns, even after taking into account the resulting climate-related costs that must be borne by taxpayers” and that it is “causing environmental damage to land, water and other resources . “

“Our nation is facing a profound climate crisis that affects every American,” Interior Secretary Deb Haaland said in a statement. “The Ministry of the Interior is committed to dealing responsibly with our public land and waters – offering taxpayers an adequate return and mitigating the deteriorating climate impact – while remaining steadfast in the pursuit of environmental justice.


“This review outlines significant flaws in federal oil and gas programs and identifies important and urgent fiscal and programmatic reforms that will benefit the American people,” she added.

The report comes after President Biden released a record-breaking 50 million barrels of oil from the country’s strategic petroleum reserve on Tuesday in hopes of lowering gas prices.