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US holds first of several oil and gas auctions as COP28 gets underway

Published 11/28/2023, 06:11 AM
Updated 11/28/2023, 06:03 PM
© Reuters. FILE PHOTO: A crude oil train moves through the yard at an oil transloading facility in Ft. Laramie, Wyoming July 15, 2014.. REUTERS/Rick Wilking/File Photo

(Reuters) -The Biden administration on Tuesday said it raised $3.4 million from a sale of oil and gas drilling rights in Wyoming, the first in a series of such sales that will coincide with a United Nations' conference aimed at combating fossil fuel-driven climate change in Dubai.

The Interior Department's U.S. Bureau of Land Management (BLM) offered 37 parcels on 35,000 acres (14,164 hectares) in Wyoming, with just 18 tracts on 21,500 acres receiving bids, the agency said in a statement. The sale was the largest of a BLM plan to offer 63 drilling parcels on nearly 44,000 acres (17,806 hectares) in six Western states over the next two weeks.

A bid of $2.6 million for a 720-acre parcel in Converse County accounted for nearly 80% of the Wyoming auction's total high bids, according to a Reuters analysis of bidding on the online platform EnergyNet. Details on the winning bidders was not immediately available.

BLM will also offer acreage in New Mexico, Oklahoma, Nevada, North Dakota and Utah on Nov. 30, Dec. 5 and Dec. 12.

The UN's "Conference of the Parties" on climate, known as COP 28, will begin on Thursday and will take place over the same two weeks. Dozens of nations plan to push for the world's first deal to phase out carbon dioxide-emitting coal, oil and gas at the meeting. U.S. President Joe Biden is not expected to attend.

An Interior spokesperson did not comment on the timing of the sales.

Environmental groups were critical of the sales.

"Instead of doing the necessary work to fight climate change, Biden continues to support the expansion of fossil fuels here in the U.S.," Nicole Ghio, senior fossil fuels program manager for Friends of the Earth, said in a statement.

U.S. oil extraction policies have been a headache for President Biden, who promised on the campaign trail to end new leasing on federal lands and waters, but was blocked by courts from doing so.

© Reuters. FILE PHOTO: A crude oil train moves through the yard at an oil transloading facility in Ft. Laramie, Wyoming July 15, 2014.. REUTERS/Rick Wilking/File Photo

Biden's Inflation Reduction Act (IRA), a climate change law passed last year, made oil and gas auctions a prerequisite for renewable energy development. It also, however, requires higher royalty rates and minimum bids meant to boost taxpayer returns.

Biden's Interior Department has issued far fewer new leases than previous administrations. The agency issued 527 leases in fiscal years 2021 and 2022 combined, compared with 2,740 in the previous two years, during the Trump administration, according to BLM data.

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