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Interior Department releases long-awaited review of federal oil and gas leasing program

WASHINGTON - MAY 11: The seal of U.S. Interior Department is seen during a news conference May 11, 2010 in Washington, DC. Secretary of Interior Ken Salazar announced that he would split the Minerals Management Service into two agencies, one would in charge the inspection of oil rigs, investigation of oil companies, and enforcement of safety regulations, as the other would supervise drilling leases and royalty dollar collections. (Photo by Alex Wong/Getty Images)

(CNN) — The Department of the Interior on Friday released a long-awaited report on oil and gas drilling on federal land that recommends an increase in leasing fees and consideration of climate change in leasing decisions. But the report largely sidesteps climate concerns, and does not recommend a halt to new oil and gas leasing — a promise President Joe Biden campaigned on.

The report, which Biden commissioned last January, outlines a series of changes for the federal oil and gas program, which Interior said currently “fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers.”

“The Interior Department has an obligation to responsibly manage our public lands and waters — providing a fair return to the taxpayer and mitigating worsening climate impacts — while staying steadfast in the pursuit of environmental justice,” Secretary Deb Haaland said in a statement Friday. “This review outlines significant deficiencies in the federal oil and gas programs, and identifies important and urgent fiscal and programmatic reforms that will benefit the American people.”

The review notes that the federal oil and gas program’s fiscal components are “particularly outdated, with royalty rates that have not been raised for 100 years.”

“Consideration should be given to raising royalty rates and, to the extent allowed by statute, to increasing the current minimum levels for bids, rents, royalties, and bonds,” the report states.

The review also encourages congressional action “on pending legislation to provide fundamental reforms to the onshore and offshore oil and gas programs.”

Biden’s January executive order paused new oil and gas leases on public lands or in offshore waters and directed the Interior Department to launch a comprehensive review of existing programs related to fossil fuel development. But a lawsuit filed in March on behalf of 13 states led to a judgment that blocked Biden’s pause, and the administration earlier this month opened more than 80 million acres in the Gulf of Mexico to auction for drilling.

While the leasing program review outlines a “set of important and long overdue reforms,” House Natural Resources Chair Raúl Grijalva underscored the need for more permanent solutions.

“The administration needs to manage public lands and waters consistent with its climate commitments, and today’s report does not offer a plan to do that,” Grijalva said in a statement. “What it does offer is a set of important and long overdue reforms to the federal fossil fuel leasing program, which until now has been a public subsidy for oil and gas drilling and extraction.”

“We need new industry financial requirements and greater public transparency around leasing, and the administration should start making these welcome changes as soon as possible,” the Arizona Democrat added. “Congress needs to end wasteful subsidies and advance leasing reform bills while that’s happening because every American sees climate change all around them, and we all know that impermanent policy changes at the margins won’t reduce emissions enough to protect our quality of life.”

Environmental groups also called for more urgent action to be taken to address the climate crisis.

“Greenlighting more fossil fuel extraction, then pretending it’s OK by nudging up royalty rates, is like rearranging deck chairs on the Titanic. There’s no time left for baby steps that let the fossil-fuel industry wreak even greater havoc on the Earth,” said Randi Spivak, public lands director at the Center for Biological Diversity.

This story has been updated with more details and background.