Every Senate Democrat Paved the Way for the Rule to Take Place
U.S. SENATE – U.S. Senator Steve Daines today released the following statement after the Biden administration announced a new proposed rule that would drastically increase the cost of oil and gas production on public lands.
“Since Day One President Biden has sent a clear message to Montana energy producers: this administration is coming for you. From shutting down lease sales to begging our adversaries for oil to this new rule that will raise rates for Montana oil and gas producers, the Biden administration is proving that they would rather bow to the far-Left environmentalists than help America remain energy dominant. What’s worse is every single Senate Democrat voted to pave the way for this egregious rule. Before the Democrats’ passed their hyperinflation bomb, I worked to strip language from the bill that would raise rates for producers, unfortunately, not a single Senate Democrat stood with me and my Republican colleagues to protect made-in-Montana and made-in-America energy.”
Daines’ amendment to the “Inflation Reduction Act” would have struck Democrats’ increases in royalty rates and fees.
The “Inflation Reduction Act,” passed along party lines, paved the way for the following key elements of the new proposed rule:
- Royalty rates: Proposed changes to royalty rates reflect provisions of the Inflation Reduction Act. Royalty rates for leases issued for 10 years after the effective date of the Inflation Reduction Act are 16.67 percent. After August 16, 2032, the rate of 16.67 percent will become the minimum royalty rate.
- Minimum bids: The rule would codify a provision of the Inflation Reduction Act that increased the national minimum bid from $2 per acre to $10 per acre, or fraction thereof, and after 10 years regularly adjusts that amount for inflation. The minimum acceptable bid is important because it establishes the starting bid at the BLM’s oil and gas lease auctions.
- Base, or minimum, rental rate: Pursuant to the Inflation Reduction Act, for leases issued in the 10 years after its enactment, the proposal includes a rental of $3 per acre, or fraction thereof, per year during the first 2-year period beginning upon lease issuance, $5 per acre per year, or fraction thereof, for the following 6 years, and then $15 per acre, or fraction thereof, per year thereafter. After August 16, 2032, those rental rates will become minimums and are subject to increase.
- Expressions of Interest: The Inflation Reduction Act established a new fee for expressions of interest. The proposed rule includes that fee, which is $5 per acre, or fraction thereof.