Oil and gas companies should pay more to drill on federal lands and waters, the Department of the Interior argued in a report released Friday, saying that the current rates were “outdated.”
Driving the news: The Department of Interior report said that the federal government’s oil and gas leasing and permitting program “fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers.”
The big picture: The report recommends increasing the 12.5% royalty rate the government charges to match higher rates that private landowners and major oil and gas producing states charge.
By the numbers: The report stops short of proposing a specific increase to the royalty rate, but hiking the minimum to the 18.75% charged for drilling in deep waters offshore would raise an additional $1 billion a year through 2050, The Washington Post reports.
Our thought bubble: The Black Friday release underscores how the administration is in a politically delicate spot on oil-and-gas policy, Axios’ Ben Geman writes.
The bottom line: While the Interior report backs a more restrictive approach to leasing, it stops far short of endorsing a halt to selling oil-and-gas drilling rights on federal lands and waters, Geman notes.