North Dakota drillers cautiously optimistic as Biden resumes federal oil leases
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A decision by the Biden administration to allow more lease sales on federal land for oil and gas drilling is essential for North Dakota, according to a free-market think tank.
Bette Grande, co-founder and CEO of Roughrider Policy Center, told The Center Square that the halting of lease sales by the Biden administration had a significant impact on North Dakota.
“North Dakota does not have as much federal land as western states, about 9% of the minerals in North Dakota are federally owned,” Grande said. “But the location of the federal land, even just a small parcel of federal land, can stop drilling activity. It leads to an inefficient ‘hop-scotching’ of drilling activity.”
Roughly 144,000 acres, about 20% of the land that had been under evaluation, will be available for drilling through a series of lease sales, according to the Wall Street Journal. Companies must now pay 18.75% royalties on the value of what they extract, an increase from 12.5%.
“The industry and the state are not happy with the Biden administration’s actions and drilling plans are being reworked,” Grande said. “However, the location of the federal minerals on the list for leasing is in the prime producing area of the Bakken. So there will still be interest in the parcels.”
However, resuming leases on federal land is not an immediate fix, as it can take long periods once drilling is resumed to tap significant amounts of oil.
“To really unleash American energy, the Biden administration should continue to hold ongoing lease sales pursuant to the Mineral Leasing Act, issue permits more expeditiously and provide consistent regulatory certainty,” Anne Bradbury, chief executive of The American Exploration and Production Council, said in a statement to the Wall Street Journal.
Grande said that for 2022, the current plan is for about 2,500 federal acres to be offered for lease if and when leasing resumes.
This article was originally posted on North Dakota drillers cautiously optimistic as Biden resumes federal oil leases
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