Economy [Oil & Gas News v3] Biden Administration Finalizes Higher Fees For Oil and Gas Companies on Federal Lands

[jefferz]

U.S. Drilling Activity Slips Further As Oil Prices Rise​

The total number of active drilling rigs for oil and gas in the United States fell again this week, according to new data that Baker Hughes published on Friday, falling by 1. U.S. drillers saw a total loss of rigs this year of 2.

The total rig count fell by 1 to 620 this week, compared to 751 rigs this same time last year.

The number of oil rigs rose by 2 this week after falling by 3 in the week prior. Oil rigs now stand at 508--down by 82 compared to this time last year. The number of gas rigs fell by 2 this week to 110, a loss of 48 active gas rigs from this time last year. Miscellaneous rigs fell by 1 to 2.

Meanwhile, U.S. crude oil production stayed the same again this week at an average of 13.1 million bpd in the week ending March 29, down 200,000 bpd from the all-time high of 13.3 million bpd.


Primary Vision’s Frac Spread Count, an estimate of the number of crews completing wells that are unfinished, fell in the week ending March 29. Completions fell by 5 to 260 for the week.

The Permian saw a 1-rig increase after rising by 1 in the week prior. The count in the Eagle Ford also rose by a single rig this week after seeing no change the week prior.

Oil prices were trading up on Friday morning. At 12:49 p.m. ET, the WTI benchmark was trading up $0.86 (+0.99%) on the day at $87.45, up more than $4 per barrel week over week.

The Brent benchmark was trading up $1.09 (+1.20%) at $91.74, up nearly $5 per barrel from a week ago—the highest point since last October

U.S. Drilling Activity Slips Further As Oil Prices Rise | OilPrice.com

The number of oil rigs saw a small hike this week as Brent crude rallied past $90 per barrel, but the number of gas-directed rigs dropped

oilprice.com

 

[Arkain2K]

US finalizes higher fees for oil and gas companies on federal lands​

By Nichola Groom | April 12, 2024

April 12 (Reuters) - President Joe Biden's administration on Friday finalized a range of reforms designed to boost returns and address environmental harms from drilling on public lands, a move that will increase fees for oil and gas companies that operate there.

The new rules follow years of criticism from green and taxpayer groups that federal oil and gas development was not benefiting the public. Many of the changes by the Interior Department's Bureau of Land Management (BLM) formalize provisions in Biden's landmark climate change law, the 2022 Inflation Reduction Act (IRA).

Under the new policy, oil and gas companies will pay higher bonding rates to cover the cost of plugging abandoned oil and gas wells as well as increased lease rents, minimum auction bids and royalty rates for the fuels they extract. The rules also limit drilling in sensitive wildlife and cultural areas.

"These are the most significant reforms to the federal oil and gas leasing program in decades, and the will cut wasteful speculation, increase returns for the public, and protect taxpayers from being saddled with the costs of environmental cleanups," Interior Secretary Deb Haaland said in a statement.

About 10% of the nation's oil and gas comes from drilling on federally owned land. An oil and gas industry trade group warned that higher costs to extract fuels from federal lands could boost U.S. reliance on foreign supplies.

"Overly burdensome land management regulations will put this critical energy supply at risk," American Petroleum Institute Vice President of Upstream Policy Holly Hopkins said in a statement.

Biden vowed during his 2020 election campaign to end federal oil and gas leasing as part of his agenda to combat climate change. But the IRA effectively guaranteed continued drilling rights auctions on federal lands for at least another decade as a concession to the powerful fossil fuel lobby.

Several environmental and taxpayer organizations praised the reforms, saying they would tamp down on speculation and hold oil and gas companies accountable for cleaning up old wells.

One group, Friends of the Earth, said the rules failed to address the climate impact of fuel extraction on public lands.

"While we support BLM's steps to curb financial giveaways to Big Oil, this rule failes to confront the massive tide of climate emissions stemming from its leasing program," Nicole Ghio, senior fossil fuels program manager at Friends of the Earth, said in a statement.

Drillers are required to pay upfront bonds to cover future cleanups if they fail, and a 2019 government analysis found bonding levels were inadequate.

Minimum lease bonds will soar to $150,000 under the new rules from $10,000 -- a level unchanged since 1960.

Royalty rates will rise to 16.67% from 12.5%, and the minimum amount companies can bid at oil and gas auctions will increase to $10 an acre from $2. The rental rate for a 10-year lease will double to $3 an acre for the first two years, eventually rising to $15 per acre in the final years. The fees can be adjusted for inflation after 10 years.

https://www.reuters.com/business/energy/us-finalizes-big-reforms-federal-oil-gas-drilling-2024-04-12/