U.S. senators introduce bipartisan oil and gas leasing reform bill to boost taxpayer returns

On Wednesday, two U.S. senators stated that they have introduced a bipartisan bill focusing on boosting taxpayer returns from federal oil and gas leasing. This is the latest in a string of moves in Washington looking to change drilling on public lands.

The bill is authored by Senators Jacky Rosen, a Democrat from Nevada, and Chuck Grassley, a senior Republican from Iowa. This bill would shoot up the minimum bid price per acre during lease auctions. It will also increase the royalty rate companies must pay on oil and gas produced from the leases.

The Joe Biden administration said it would review federal oil and gas leasing later this month. This move will be taken to address the widespread criticism that the program is not yielding adequate public revenue as well as making climate change.

While the bill proposed on Wednesday would not deliver on President Joe Biden’s campaign promise to stop issuing new leases to fight global warming, it could be applied to existing leaseholders if passed into law.

Like the House bills, the Senate bill would increase royalty rates for onshore development for the first time in a century from 12.5% to 18.75%, bringing them in line with those paid by offshore drillers. It would also raise the minimum bid for federal acreage to $5 an acre from $2 and lift other fees and costs.

“Big Oil continues to take advantage of low royalty rates on federal lands,” Grassley said in a statement. “Congress has not addressed this issue for over 100 years and since then, these oil companies have deprived the Treasury and the American people of billions of dollars.”

Oil and gas production on public lands accounts for nearly a quarter of all U.S. greenhouse gas emissions.