The Trump administration has rejected most requests for royalty relief submitted by onshore oil and gas companies struggling with reduced demand for fuel and battered prices, a top Interior Department official said on Friday.
Interior’s Bureau of Land Management has been fielding individual applications for royalty reductions and lease suspensions from drillers since April after rejecting industry calls for broad cuts to help them grapple with fallout from the coronavirus pandemic.
“We’ve been very conservative with how those are approved or disapproved,” Casey Hammond, principal deputy assistant secretary for land and minerals management, said in an interview on Friday. He was not able to say how many applications had been submitted or denied, but said overall requests had lagged expectations.
“I wouldn’t say they are coming in at any great pace,” he said.
The agency’s conservative approach is justified by the recent uptick in fuel demand that is allowing the industry to recover, he said.
BLM plans to resume its oil and gas leasing program later this summer after shelving auctions in a slew of states in May and June. The postponements were intended to give both BLM employees and drillers time to recover from the challenges posed by the virus, Hammond said.
Land parcels meant to be auctioned off in states like New Mexico, Wyoming and Utah are expected to be wrapped into sales scheduled for August and September, he added.
Hammond pushed back on a study this week by liberal think tank Center for American Progress that criticized the administration for approving half as many wind and solar projects on federal lands as the Obama administration did in its first three-and-a-half years.
“We respond to applications,” he said, noting that easier areas for development had been snatched up during the previous administration. “What you are left with are more challenging areas full of endangered birds to desert tortoises, so as a result you are not going to have the same pace.”