The Biden Administration put out a memo recently that is raising some eyebrows.
Fox News reports that the memo was accidentally leaked and that it indicated that the Biden Administration is aware of the fact that raising the cost of drilling permits for oil companies will make it more costly for those companies to be able to drill at all. However, the memo admits that the Biden Administration will seek to do so anyway because of supposed environmental concerns that it will be on the lookout for.
Fox News reports that Former Bureau of Ocean Energy Management (BOEM) Director Amanda Lefton recommended late last year that the Department of the Interior (DOI) move forward with higher royalty fees for oil and gas lease sales that span 958,202 acres in the Cook Inlet off of the coast of Alaska. DOI Assistant Secretary Laura Daniel-Davis signed off on this arrangement, according to reporting by Fox News Digital.
Lefton wrote the following in the memo:
"If a Cook Inlet prospect would be developed, there would be additional government revenues and greater energy security for the State of Alaska, especially if development of natural gas resources in the Cook Inlet ameliorated the long-term supply challenges facing the Anchorage area,"
She continued in the memo by saying:
"Nevertheless, because of the serious challenges facing the Nation from climate change and the impact of [greenhouse gasses] from fossil fuels, BOEM is not recommending this option since it would not include an appropriate surcharge to account for those impacts,"
The specific recommendation from Lefton is that the federal government should charge a royalty fee of 18.75% instead of the 16.67% that she said would get more bids and "be more likely to facilitate expeditious and orderly development of [offshore] resources."
She chose the fee of 18.75% "because this rate constitutes the most reasonable balancing of environmental and economic factors for the American public."
Daniel-Davis failed to mention that the lower fee would potentially contribute to greater energy security for the country and, ultimately, perhaps be the better choice for the country as a whole. Those kinds of things were not under consideration as the team worked to create the right balancing act between helping the drillers do what they needed to do and assisting the environmental people.
BOEM won at the auction, and the sale was just one bid of $63,983 for a single 2,304-acre tract in the area. In other words, the auction did not garner nearly as much attention as it otherwise might have because there weren't that many bids due to the high rates that they would have had to pay.
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