The royalties are still a major source of revenue: the federal government has so far collected $9.6 billion this year from drilling on public land and in federal waters, up from $8 billion last year.
As one way to raise revenue for the $2.2 trillion spending bill, Democrats included provisions in the legislation that would raise onshore oil and gas drilling royalty rates from 12.5 percent to 18.75 percent and set offshore rates at “not less than 14 percent.” At auctions of federal oil and gas leases on public lands, it would increase the minimum bid from $2 an acre to to $10 an acre. And it would increase the annual rents that companies must pay to the federal government to lease the land. According to the Congressional Budget Office, those changes would bring in about $2.5 billion in new revenue by the end of the decade.
Climate policy advocates said they supported raising those fees and royalties, but added that the increase would not slow drilling or climate change.
“That’s the stuff that needs to happen,” said Joel Clement, a former Interior Department official who resigned from the agency in protest during the Trump administration, and now serves as a senior fellow at the Harvard Kennedy School. “But it’s a first-base hit, not a double or a home run. And at this point, we have to have a home run on leasing on public lands. It’s one of the immediate climate levers that can bring real change. The leasing program must account for climate emissions. That’s how you get to a lasting moratorium on drilling.”
Mr. Clement and other climate policy experts said the Interior Department should incorporate the potential climate impacts of leasing oil and gas drilling into the assessments required by the 1970 National Environmental Policy Act, which says the government must consider ecological damage when deciding whether to permit drilling and construction projects.
If all assessments of the impacts of drilling on public lands were required to include the potential warming impact of burning the fuels within the leases, experts said, that would create the legal groundwork for the government to stop issuing new drilling leases.
But moving forward with such a policy would quite likely also create intense political blowback from Republicans, the oil industry and Democrats in oil and gas states. That could also create complications for the administration as it seeks to steer its broader spending bill through a razor-thin Democratic majority in Congress.
“The political tightrope is vexing, but the bottom line is that we have to end oil and gas leasing on public lands,” Mr. Clement said. “It’s not an exaggeration to say that doing so would change the global conversation on the energy transition.”
Lisa Friedman contributed reporting.
