Changes to oil and natural gas leasing proposed

Tracy Stone-Manning
Laura Daniel-Davis

The U.S. Department of the Interior has announced new steps to revise U.S. Bureau of Land Management oil and natural gas leasing regulations.

The proposed rules would revise fiscal terms of the onshore federal oil and gas leasing program, including those involving bonding requirements, royalty rates and minimum bids.

“The Interior Department has taken several steps over the last two years to ensure the federal oil and gas program provides a fair return to taxpayers, adequately accounts for environmental harms and discourages speculation by oil and gas companies,” said Laura Daniel-Davis, principal deputy assistant secretary for land and minerals management at the Department of the Interior.

“The department is committed to creating a more transparent, inclusive and just approach to leasing and permitting that serves the public interest while protecting natural and cultural resources on our public lands,” Daniel-Davis said.

BLM Director Tracy Stone-Manning said the updates are intended to ensure fairness to taxpayers and balanced, responsible development in a transition to a clean energy economy.“It includes common sense and needed fiscal revisions to BLM’s program, many directed by Congress.”

Federal onshore oil and natural gas royalty rates are historically lower than on state-issued leases and federal offshore leases.

Prior to the Joe Biden administration, onshore royalty rates hadn’t been increased in more than 100 years. Bonding levels hadn’t been raised for 60 years while minimum bids and rents remained the same for more than 30 years.

The proposed rule would codify provisions made by Congress in the Inflation Reduction Act and Bipartisan Infrastructure Law as well as recommendations from a Department of the Interior report on the federal oil and gas leasing program issued in November 2021.