Revisions on deck for BLM’s oil and gas leasing program to benefit taxpayers and protect resources

The US Department of the Interior has unveiled a proposal to revise the Bureau of Land Management‘s (BLM) oil and gas leasing regulations, intending to balance development with the protection of wildlife habitats and cultural sites.

The proposed changes aim to bring fiscal fairness to taxpayers and discourage speculative or irresponsible entities by revising outdated financial terms, including bonding requirements, royalty rates, and minimum bids.

Principal Deputy Assistant Secretary for Land and Minerals Management, Laura Daniel-Davis, stated that the department has been working to ensure that the federal oil and gas program provides a fair return to taxpayers, adequately accounts for environmental harm, and discourages oil and gas companies from speculative activities. This new proposal, she said, is intended to solidify these goals and encourage more responsible leasing and development processes.

BLM Director Tracy Stone-Manning echoed these sentiments, emphasizing the proposed updates aim to bring fairness and responsible development as we transition to a clean energy economy. The updates include necessary fiscal revisions directed by Congress.

Bureau of Land Management’s oil and gas leasing regulations set for overhaul by Interior Department. Photo courtesy of Matthew G. Bisanz/Wikimedia Commons.

The proposed rule focuses on modernizing the financial terms of the leasing program. Notably, federal onshore oil and gas royalty rates have been consistently lower than those on state-issued leases and federal offshore leases. Onshore royalty rates had not seen an increase in over a century prior to the Biden-Harris Administration’s tenure, and bonding levels, minimum bids, and rents have remained stagnant for several decades.

The proposed changes include provisions made by Congress in the Inflation Reduction Act and the Bipartisan Infrastructure Law. It aligns with the Department of the Interior’s Report on the Federal Oil and Gas Leasing Program issued in November 2021, and Executive Order 14008, which focuses on tackling the climate crisis domestically and internationally.

Key aspects of the proposed rule include increased minimum lease bond amounts to provide an adequate incentive for companies to meet reclamation obligations, better protection for wildlife and cultural resources, revised royalty rates reflecting provisions of the Inflation Reduction Act, and increased minimum bids.

The proposal also includes a new fee for expressions of interest as established by the Inflation Reduction Act. The revisions underscore the Department of the Interior’s commitment to a more transparent, inclusive, and just approach to leasing and permitting on public lands.