Proposed rule would improve responsible stewardship of America’s lands, better protect cultural and natural resources, and implement changes directed by Congress
Date: Thursday, July 20, 2023
WASHINGTON — The Department of the Interior today announced new steps to revise the Bureau of Land Management’s oil and gas leasing regulations, which would ensure a balanced approach to development, provide a fair return to taxpayers and ensure that drilling does not conflict with protection of important wildlife habitat or cultural sites.
The proposed rule would revise outdated fiscal terms of the onshore federal oil and gas leasing program – including for bonding requirements, royalty rates, and minimum bids – which would increase returns to the public and disincentive speculators or less responsible actors.
“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. This new proposed rule will help fully codify those goals and lead to more responsible leasing and development processes,” said Principal Deputy Assistant Secretary for Land and Minerals Management Laura Daniel-Davis. “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.”
“This proposal to update BLM’s oil and gas program aims to ensure fairness to the taxpayer and balanced, responsible development as we continue to transition to a clean energy economy,” said BLM Director Tracy Stone-Manning. “It includes common sense and needed fiscal revisions to BLM’s program, many directed by Congress.”
Modernizing the fiscal terms of the leasing program is central to this proposed rule. Federal onshore oil and gas royalty rates are historically consistently lower than on state-issued leases and federal offshore leases; in fact, onshore royalty rates hadn’t been raised in over 100 years prior to the Biden-Harris Administration taking office. Likewise, bonding levels have not been raised for 60 years, while minimum bids and rents remained the same for over 30 years.
The proposed rule would specifically codify provisions made by Congress in the Inflation Reduction Act and the Bipartisan Infrastructure Law, as well as recommendations from the Department of the Interior’s Report on the Federal Oil and Gas Leasing Program, issued in November 2021. The proposed rule is also consistent with Executive Order 14008, Tackling the Climate Crisis at Home and Abroad.
Key elements of the proposed rule include: