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Wyoming Governor: Biden admin's oil and gas proposal will mean 'unnecessary costs to producers'

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Chris Woodward

(The Center Square) – Wyoming Governor Mark Gordon opposes a plan by the Biden administration to increase royalty rates for oil and gas development on public lands.

In a statement aimed at the Bureau of Land Management, Gordon said the rule would negatively impact the Cowboy State's energy producers.

“It has been my experience that when Washington, DC talks about balanced development as we transition to clean energy, it is merely code for placing additional burdens on the fossil fuel industry,” the governor said. “Today the oil and gas industry is that target. The Bureau of Land Management’s proposed rule shows a disregard for the protections already in place in Wyoming for wildlife, cultural and historic sites and reclamation of oil and gas wells.” 

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The U.S. Department of Interior, which rolled out the leasing regulation proposal this week, said it "would revise outdated fiscal terms of the onshore federal oil and gas leasing program," increasing royalty rates from 12.5 percent to 16.67 percent. 

“The Interior Department has taken several steps over the last two years to ensure the federal oil and gas program provides a fair return to taxpayers, adequately accounts for environmental harms, and discourages speculation by oil and gas companies,” Laura Daniel-Davis, the department's principal deputy assistant secretary for land and minerals management, said in a news release. “This new proposed rule will help fully codify those goals and lead to more responsible leasing and development processes.”

The Biden administration added the proposal is in line with the Inflation Reduction Act approved last year by Congress.

Gordon said the proposal will burden small operators in the state.

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© iStock - Karina Movsesyan

“Wyoming's energy industry is composed of many smaller operators who are committed to responsible development,” the governor wrote. “Huge bonding requirements – regardless of the type and location of wells – piled on top of increased leasing costs and other fees, may very well make it impossible to operate.”

The governor added that “unnecessary costs to producers” will result in what he views as less oil and gas for consumers across the nation and less revenue for Wyoming and its residents.

“Revenue from the oil and gas industry has funded education, highway maintenance, law enforcement, mental health programs, and other vital services for Wyoming’s people,” Gordon said. “We have just seen major utilities request substantial rate increases based upon their argument of past increases to the price of oil and gas. Yet this Administration is doing everything it can to make things worse for those struggling to pay their bills."