On Friday, the Biden Administration announced a finalized rule dictated by Democrats’ “Inflation Reduction Act” to drastically raise the cost of producing oil and gas in the U.S.
“The rule codifies fiscal provisions included in the Inflation Reduction Act,” the Department of Interior explained in a press release.
“The plan codifies some provisions already being enforced on an interim basis in the climate law, known as the Inflation Reduction Act,” FOX8 WGHP reported Friday, noting that the increased royalty rate will increase oil and gas companies $1.8 billion by 2023.
Energy advocates were quick to point out the irony of “inflation reduction” law raising the cost of energy, as The Hill reports:
“‘When you work to increase costs while inflation is skyrocketing, tone deaf doesn’t begin to describe Joe Biden and his administration,’ said Daniel Turner, Founder and Executive Director for Power The Future.
“‘This announcement is the result of the laughably named Inflation Reduction Act, yet Joe Biden feels increased costs are the answer to inflation.’”
U.S. Senator John Barrasso (R-WY), ranking member of the Senate Committee on Energy and Natural Resources, warns that the rule imposes higher fees and royalties, dramatically raises bonding requirements, and severely limits the number of parcels offered at lease sales.
The rule will devastate domestic energy production, cost U.S. jobs and make American more dependent on foreign energy – and it’s all part of Pres. Joe Biden’s agenda, Barrasso said:
“As a candidate, Joe Biden recklessly threatened to end oil and natural gas production on federal lands. As president, he is doing all he can to make it economically impossible to produce energy on federal lands.
“The Bureau’s latest regulation imposes costs that go even beyond those mandated by the Democrats’ irresponsible Inflation Act. Less oil and natural gas from federal lands means fewer jobs for Americans and, almost certainly, more money to the Middle East, Venezuela, Russia, and Iran.”
Price increases imposed on gas and oil producers by the rule include:
- Increasing bond required by 1,400 percent – from $10,000 to $150,000 per lease on federally-owned land.
- Raises the royalty rate for energy produced on public lands from 12.5% to 16.67%.
- Doubles initial annual rent rates from $1.50 per acre to $3 per acre, and raises rates to $15 per acre in later years.
- Quintuples the minimum bid to lease lands for drilling from $2 per acre to $10 per acre and adjusts the price for inflation.