Associated PressAssociated Press
This Feb. 26, 2021, file photo shows an oil well east of Casper, Wyo. The Biden administration is raising royalty rates that companies must pay for oil and natural gas extracted from federal lands as it moves forward under court order with sales of public fossil fuel reserves in nine states. (AP Photo/Mead Gruver, File)
FILE - President Joe Biden speaks during the "Accelerating Clean Technology Innovation and Deployment" event at the COP26 U.N. Climate Summit, Nov. 2, 2021, in Glasgow, Scotland. The administration says it's increasing royalty rates for oil and gas extracted from new leases on public lands. (AP Photo/Evan Vucci, Pool, File)
This Feb. 26, 2021, file photo shows an oil well east of Casper, Wyo. The Biden administration is raising royalty rates that companies must pay for oil and natural gas extracted from federal lands as it moves forward under court order with sales of public fossil fuel reserves in nine states. (AP Photo/Mead Gruver, File)

The city of BILLINGS, Mont. The Interior Department said on Friday that it is moving forward with the first oil and natural gas lease sales under President Joe Biden, but will increase royalty rates for companies as federal officials weigh efforts to fight climate change.

The royalty rate for new leases will increase. It is the first increase to royalties for the federal government since they were imposed in the 1920s.

New leasing was suspended by Biden just a week after he took office. A federal judge in Louisiana ordered the sales to resume, saying that Interior officials had not offered a rational explanation for canceling them.

The government held an offshore lease auction in the Gulf of Mexico in November, but a court blocked the sale before the leases were issued.

Pressure for Biden to expand U.S. crude production has increased as the global economy and fuel prices have gone up. The Democrat faces calls from within his own party to do more to curb emissions from fossil fuels that are driving climate change.

There will be a notice to be posted on Monday for the sale of federal lands for over 200 square miles in the West. The parcels represent less land than officials had proposed for sale in November and less than what the industry had originally nominated.

Nine states will be covered in the sales notices: Wyoming, Colorado, Utah, New Mexico, Montana, Alabama, Nevada, North Dakota and Oklahoma.

The amount of land by state will be included in Monday's sales notices, but the Interior Department wouldn't specify which states had parcels for sale. They said the reduced area is a result of a focus on leasing in locations near existing oil and gas development.

Hundreds of parcels of public land were dropped from the upcoming lease sale because of concerns about wildlife being harmed by drilling rigs.

Burning fuel from the remaining leases could cost billions of dollars in climate change impacts. Fossil fuels are a prime target for climate activists because they account for 20% of energy related U.S. greenhouse gas emissions.

Republicans want more drilling because they say it will increase U.S. energy independence and bring down the price of crude. Oil companies are hesitant to expand drilling because of uncertainty over how long high prices will last.

The announcement comes after Interior officials raised the prospect of higher royalty rates and less land available for drilling in a report issued last year.

Secretary Deb Haaland said that the federal oil and gas leasing programs have prioritized the wants of the extractive industries.

Environmentalists derided the decision to hold the long- delayed sales, while oil industry representatives said the higher royalty rates would deter drilling.

Nicole Ghio with the environmental group Friends of the Earth said Biden was putting oil industry profits ahead of future generations that will have to deal with the worsening consequences of climate change.

Ghio said that if Biden wants to be a climate leader, he must stop auctioning off our public lands to Big Oil.

Frank Macchiarola said that officials had removed some of the most significant parcels that companies wanted to drill while adding new barriers that would discourage companies from investing in drilling on public lands.

Over the past decade, lease sales and royalties have brought in more than $83 billion. Half of the money from drilling goes to the state where it happened.

According to federal officials, most states require companies to pay a higher royalty rate.

The royalty rate for oil produced from deep waters in the Gulf of Mexico is 18%. The energy companies offered a combined $192 million for offshore drilling rights in the Gulf in the November auction that was later canceled.

When Biden has a goal to lower greenhouse gas emissions by at least 50%, new leases that are developed could keep producing crude. Scientists say the world needs to be well on its way to avoiding catastrophic climate change over the next decade.

A higher royalty rate would have a relatively small effect on global emissions because any reductions in oil and gas from federal lands would be largely offset by fuel from other sources.

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