Energy & Environment

Interior proposes withdrawal of Trump rule that would allow drillers to pay less


The Interior Department has proposed a rule to withdraw a Trump-era regulation that was expected to lessen the amount of money that companies pay the government to drill on public lands and waters. 

The Biden administration in a swipe at Trump’s said the rule would “shortchange” taxpayers, in light of findings that it would benefit oil and gas companies by millions of dollars.

“After thoughtful consideration, the Department of the Interior is proposing to withdraw an attempt by the previous administration to shortchange American taxpayers for the resources that oil and gas companies extract from public lands,” an Interior Department spokesperson said in a statement.  

“The Department’s ongoing review of the 2020 rule ensures that communities receive a fair return from onshore and offshore energy development,” the spokesperson added. 

The Trump rule in question changed the way that royalties are calculated that companies pay to the government for drilling on federal property.

A new economic analysis justifying the proposed withdrawal said that getting rid of the Trump rule will allow the federal government to collect an additional $64.6 million in fees annually. 

The Trump administration had billed it as a way to give regulatory certainty and free companies from burdensome regulations. It came after a request from the American Petroleum Institute industry group for changes to how these royalties are calculated. 

The proposed withdrawal comes after a series of delays the Biden administration put on the rule to prevent it from taking effect. It’s currently halted until November. 

In its proposal, the Biden administration argued that the Trump rule had “defects” including an inadequate justification, consideration of alternatives and public comment period. 

Tags Drilling federal lands
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