National Niche Royalty Rate for Onshore Lease Auctions under consideration by U.S. The Biden administration is considering raising the royalty rate that drilling companies must pay on oil and gas leases that it plans to sell in the first quarter, according to a draft notice posted but then removed from the U.S. Bureau of Land Management (BLM) website. The royalty rate for leases offered this quarter would be 18.75%, up from the 12.5% minimum rate required by law. The BLM accidentally posted some pre-decisional draft language on their website according to an Interior Department official. In a report on the federal oil & gas leasing program published late last year, Interior said the 12.5% rate had been in place for a century and was “out of
Gary Gensler stated the aim is to issue a draft of the rule in early 2022. A major point of contention is disclosure of “Scope 3” emissions, which include emissions generated up and down the company value chain, including by suppliers and customers. Corporate greenhouse gas emissions fall into categories: Scope 1 are emissions generated by the company and Scope 2 includes emissions created indirectly (e.g. using electricity). Companies are concerned that disclosing second-hand emissions data could expose them to litigation. In addition, there is no standard method for calculating Scope 3 emissions and providing that level of detail would be onerous. **************************************************** U.S. Department of Energy (DOE) Releases Crude Oil from Strategic Petroleum Reserve (SPR) At the direction of President Biden, the DOE announced in November 2021 a series of releases through an exchange program bid process to boost the nation’s fuel supply. Companies that receive SPR crude oil through the exchange agree to return the amount of crude oil received, as well as an additional amount, dependent on how long they hold the oil. “As we come out of an unprecedented global economic shutdown, oil supply has not kept up with demand, forcing working families and businesses to pay the price,” said U.S. Secretary of Energy Jennifer M. Granholm. “This action underscores the President’s commitment to using the tools available to bring down costs for working families and to continue our economic recovery.” Source: U.S. Department of Energy **************************************************** Biden Administration Blocked from Restoring Obama-Era Values to Calculate Cost of Climate Change In his February 11, 2022 ruling, U.S. District Court Judge James Cain wrote “The President lacks power to promulgate fundamentally transformative legislative rules in areas of vast political, social, and economic importance” through executive order and violated federal law in attempting to impose new rules without seeking public comment.
step with modern times”. Source: Reuters 2/1/2022
**************************************************** Biden Administration Pledges $1.15 Billion for Orphaned Well Clean Up Program The Biden administration on Jan. 31 said it would make $1.15 billion in funding available to create jobs cleaning up orphaned oil and gas wells across the country, according to a release by the Department of the Interior. “We must act with urgency to address the more than one hundred thousand documented orphaned wells across the country and leave no community behind,” Interior Secretary Deb Haaland commented in the release. “This is good for our climate, for the health our communities and for American workers.” Unveiled on January 31, 2022, the funding reflects a portion of the $4.7 billion allocated in the infrastructure law Congress passed in 2021 to create a new federal program to address orphan oil & gas wells. A pillar in President Biden’s pledge to address climate change, this program will help reduce methane leaks as one of the goals of the U.S. Methane Emissions Reduction Action Plan. The first phase of the new $4.7 billion federal program makes Texas and Pennsylvania eligible for the most funding to address orphan oil & gas wells. **************************************************** Securities and Exchange Commission (SEC) climate rule being drafted As part of the effort by the Biden administration to reduce greenhouse gas emissions, the SEC is working on a new climate change rule that may require broad emissions disclosures. SEC Chair
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