Biden raises oil and gas royalty rates on federal lands for first time since 1920

The Biden Interior Department publishes a final rule raising the royalty rate for oil and gas extraction on federal public lands from 12.5% to 16.67%, the first increase since the Mineral Leasing Act of 1920. The rule also increases minimum bids and fees for non-producing leases to reduce speculative land banking. The old 12.5% rate, unchanged for over a century, was among the lowest in the world and well below what private landowners or most other countries charge. The new rate brings federal royalties more in line with market rates and generates additional revenue for conservation and renewable energy programs under the Inflation Reduction Act. Oil industry groups challenge the rule in court.