The legislation also would effectively reinstate an auction of Gulf leases that was held in November 2021 but later invalidated by a federal judge after finding that the government didn’t sufficiently examine the climate consequences of the move.
Under the bill, the Interior Department would only be able to issue new onshore wind and solar rights of way on federal land if the agency had held an onshore oil and gas lease sale in the prior four months. For offshore wind, the requirement would be for an auction of offshore oil and gas leases spanning at least 60 million acres in the year beforehand.
The measure lays out requirements for the timing and scope of those auctions. And it mandates that all acceptable bids must result in the issuance of oil and gas leases. If a sale is sparsely attended or no successful bids are lodged for oil and gas leases, the requirement would be met. If enacted, the mandates could effectively delay the Biden administration’s planned sale of offshore wind rights near California later this year.
The potential mandates follow criticism from some oil and gas advocates that the Biden administration has moved too slowly in offering federal land and water for new drilling. And they come on the heels of a Biden administration proposal for a five-year oil and gas leasing plan that includes an option for no new offshore sales between 2023 and 2028.
The provisions appear to be a concession to Manchin, a West Virginia Democrat who has complained the Biden administration is “blocking increased energy production at home” while encouraging more oil flows from Venezuela and OPEC producers.
“This gives us energy security,” Manchin said Thursday. He highlighted the permitting changes in the final deal and called it “well balanced.”
The deal would impose long-sought reforms for the oil and gas industry, with new and higher fees for developments on public land and water. That includes requiring energy companies to pay royalties on all of the oil and gas produced on federal lands, including the methane that is vented, flared or otherwise escapes into the atmosphere.
It remains to be seen whether the underlying legislation, which also includes a slew of new and extended tax credits for clean energy and electric vehicles, will be backed by the full Democratic caucus in the 50-50 Senate. It would also have to pass the House, where progressives sought a much more expansive plan.
This article was provided by Bloomberg News.