The Inflation Reduction Act (IRA), passed by Congress on August 12, 2022, changes the incentives and procedural requirements for energy leasing on federal land. In this paper, I provide an overview of the federal energy leasing statutes and regulations and the Biden administration’s early actions on oil and gas leasing. I then analyze how the IRA changes regulatory requirements through a modernized fee structure, elimination of noncompetitive leasing, and by tethering oil and gas leasing to renewable leasing. This paper complements EELP’s previous analysis on The IRA Offshore Energy Leasing Provisions’ Potential Impacts.
Federal Onshore Energy Leasing Statutes and Regulations
The Mineral Leasing Act (MLA), enacted in 1920, established the process for leasing federal public land for oil and gas exploration and drilling. In 1976, Congress delegated management of the leasing program to the Department of the Interior’s Bureau of Land Management (BLM) under the Federal Land Policy Management Act (FLPMA), as part of a broader delegation to the agency to manage federal public land for energy development and conservation.
The FLPMA requires BLM to ensure the United States receives “fair market value” for leases. The FLPMA also directs BLM to consider multiple uses for public lands, requiring the agency to use resources “in the combination that will best meet the present and future needs of the American people.” The multiple use mandate applies to both renewable and non-renewable resources, including ”recreation, range, timber, minerals, watershed, wildlife and fish, and natural scenic, scientific and historical values.”
BLM is also responsible for managing renewable energy development on federal public land. To facilitate development of renewable energy projects, BLM promulgated the 2016 Solar and Wind Energy Rule, which streamlined the process for granting rights-of-way for wind and solar projects in specific areas, called designated leasing areas. This rule established economic and procedural benefits to incentivize leasing these lands. For a more detailed look at the FLPMA’s history and the 2016 Solar and Wind Energy Rule, see our paper, Siting Renewable Energy on Public Lands: Existing Regulations and Recommendations, by Peter Daniels.
In December 2020, Congress passed the bipartisan Energy Act of 2020, which directed the Department of the Interior (DOI) to permit 25 gigawatts (GW) of electricity from wind, solar, and geothermal projects by 2025. As of November 2021, BLM was on track to exceed this goal, projecting leases for nearly 32 GW of renewable capacity on federal lands by 2025. Despite this progress, BLM’s efforts to facilitate renewable energy development are in tension with its obligation to allow for oil and gas leases. For example, in a record of decision assessing the environmental consequences of oil and gas development in White River National Forest, BLM explained that “renewable energy projects could be incompatible with oil and gas activities and future development could be precluded by oil and gas activities.” Renewable energy advocates worry that development on public lands may be limited in part due to the significant number of oil and gas leases on federal land.
President Biden Pauses Oil and Gas Leasing on Federal Land
One week after taking office, President Biden outlined his administration’s initial climate and energy goals in the Executive Order on Tackling the Climate Crisis at Home and Abroad (EO 14008). EO 14008 directs the Secretary of the Interior to temporarily pause all oil and gas leases pending a review of the oil and gas leasing program. It also requires DOI to consider its “broad stewardship responsibilities over the public lands,” including potential climate and other impacts associated with oil and gas activities on public land.
DOI published the November 2021 Report to respond to EO 14008’s directive and recommend changes to the oil and gas leasing program. The recommendations were informed by the Government Accountability Office‘s (GAO) findings that the federal oil and gas program was inefficient, vulnerable to fraud and mismanagement, and in need of updating. Guided by BLM’s statutory mandate to manage lands for multiple uses, DOI found that reforming the program was overdue and urgent as the DOI takes into account “new stressors and new opportunities for our public lands . . ., including addressing biodiversity loss, tackling climate change, and deploying new technology”.
In its report, DOI recommended increasing onshore royalty rates and rents and raising the minimum bid and bond requirements. DOI found that the relative affordability benefited speculators over taxpayers and suggested that increasing the costs would provide “balance and transparency to public land.” The report detailed further benefits of increasing the cost of leasing federal public land, such as increased funding to states (states receive 49 percent of federal oil and gas revenues), and funding for water reclamation projects and National Park maintenance. The report found that increasing the onshore royalty rates and other leasing costs better aligned the program with BLM’s mandate to manage the lands for multiple uses.
Pursuant to EO 14008, DOI paused oil and gas lease auctions for 60 days immediately following the President’s order. A group of states and an oil and gas trade group challenged the pause in two cases, with challengers claiming the agency was violating its statutory duty to hold quarterly lease auctions under the Mineral Leasing Act, among other claims. Western Energy Alliance filed the first complaint in Wyoming District Court in January 2021. In March 2021, 13 states filed a separate complaint in Louisiana District Court. In June 2021, the District Court of Louisiana halted the pause, finding DOI was obligated to continue to hold lease auctions.
In April 2022, BLM notified the public that in “compliance with an injunction from the Western District of Louisiana,” it would hold a lease auction in June 2022, but implemented several changes to the leasing program. As a result of BLM’s environmental review of the potentially available acreage, BLM eliminated about 73 percent of the federal acreage originally nominated for leasing. BLM also increased the federal royalty rate for new oil and gas leases to 18.75 percent and conducted environmental assessments with more analysis of direct and indirect greenhouse gas emissions and climate impacts. On August 12, 2022, Congress passed the IRA, which changed the leasing program further.
The Inflation Reduction Act’s Onshore Energy Leasing Provisions
The IRA incorporates many of DOI’s recommendations from the November 2021 Report but also ties renewable energy rights-of-way on federal land to new oil and gas lease auctions. In the following sections, I describe the IRA’s onshore leasing requirements and financial incentives.
Oil and Gas Auctions Are Tied to Renewable Leasing
The IRA links the right-of-way grants of onshore wind and solar development to onshore oil and gas lease auctions for the ten years following the passage of the IRA. In order to grant a wind or solar right-of-way, the IRA requires BLM to have made available at auction a minimum acreage for oil and gas development in the one year prior. The IRA also requires that an oil and gas lease auction occur within 120 days prior to the right-of-way grant. This provision is concerning to stakeholders who argue this will continue oil and gas production, especially adjacent to indigenous land, and may have significant climate and environmental justice implications.
The IRA does not require the BLM to significantly alter or increase the oil and gas leasing acreage it has historically offered. The IRA requires BLM to offer, at minimum, the lesser of: two million acres or 50 percent of the acreage for which developers submit expressions of interest (EOIs) during that year. For context, between 2009 and 2021, BLM offered more than two million acres annually in all but three years, averaging 4.4 million acres per year. During that same period, developers submitted EOIs for an average of 8.7 million acres of land annually. Therefore, if developers continue submitting EOIs at this historical level, under the IRA, BLM must offer at least two million acres for oil and gas leasing, which is well below the average acreage BLM has offered in recent years. However, if annual EOIs decrease in the future to four million acres or less, then BLM could offer less than two million acres. And, as discussed below, the IRA adds a fee for EOIs for the first time, which may impact developers’ decisions to submit EOIs.
Historically, most auctioned land does not result in producing wells. For example, between 2009 and 2021, about 24 percent of the land offered at auction was leased, and only about 50 percent of the leased parcels were developed. The IRA does not affect BLM’s discretion about which lands it makes available for lease.
Mineral Leasing Act Modernization
The IRA modernizes the fee structure of the MLA, increasing the price of oil and gas leases on federal land, and making it comparable with the fees for leasing on state land. Prior to the IRA, many rates had not changed since the 1987 MLA amendments. The IRA addressed this by incorporating fee scales and adjustments for inflation that will update certain rates automatically. These changes are consistent with the objectives of EO 14008 and the November 2021 Report.
The November 2021 Report recommended increasing royalty rates above the MLA’s minimum rate of 12.50 percent. In response, BLM increased the rates to 18.75 percent, but this did not change the MLA’s statutory minimum rate. The IRA codified the royalty rate at ”16 2/3 percent” for ten years, after which it is the minimum rate. This updated rate is comparable with what many western states charge. The IRA’s increased royalty rates may reduce production, and some models predict varying amounts of associated emissions reductions.
The November 2021 Report also found that because EOIs were free, there was an incentive for developers to nominate large amounts of land, whether it had resource potential or not, and the burden then fell to BLM to evaluate and process land that may never be bid on or developed. The report recommended that BLM ”evaluate operational adjustments to its leasing program that will avoid nomination or leasing of low potential lands and instead focus on areas that have moderate or high potential for oil and gas resources”. The IRA adjusts these incentives by adding a fee for oil and gas EOIs set at $5 per acre, making oil and gas EOIs comparable in cost to EOIs for renewable projects. Finally, the IRA implemented the November 2021 Report’s recommendations to increase the minimum bid, rental rates, and minimum bond amounts on leases.
Noncompetitive Leasing Is Eliminated
The IRA further disincentivizes speculative oil and gas leasing on federal public land by forbidding non-competitive leasing. The Mineral Leasing Act’s competitive leasing provision requires BLM to hold auctions after reviewing EOIs, selecting eligible land, and providing the public with notice of an upcoming auction. Under this process, the highest bidder wins the right to use the land for oil and gas exploration and develop the land for production. Prior to the IRA, the MLA allowed for lands that did not receive bids at auction to be offered “noncompetitively.”  These lands could be leased to any eligible purchaser on a first come, first served basis. Land leased through this process was less expensive for developers than land leased competitively. 
The November 2021 Report emphasized DOI’s effort to implement “a fair and equitable return on resources through a competitive leasing process” and detailed why noncompetitive leasing does not provide a fair return, referencing a GAO report that found noncompetitive leasing wasteful. For example, the GAO found that noncompetitive leases comprised 38 percent of total acreage leased from 2003 to 2019 but comprised just 11 percent of the oil and gas leasing program revenue. The GAO also reported that between 2003 and 2009, only 1.2 percent of oil and gas leases generated royalties in their 10-year primary terms.
Conservation groups point out that the land consumed by speculative leases could be used for other activities such as conservation, ranching, recreation, or renewable energy development. The end of noncompetitive leasing may also prevent developers from reselling speculative leases, a practice that was effectively a wealth transfer from the US government to private interests.
Administrative actions could still have a substantial effect on how the IRA is implemented, and it will be important to watch how the IRA’s changes affect future leasing decisions. For example, on October 6, 2022, DOI announced that it will begin scoping the next onshore oil and gas lease auctions in New Mexico and Wyoming, implementing the IRA’s fee scales and other procedural requirements. We will track notable outcomes of oil and gas leasing here.
 30 U.S.C. § 21a.
 Peter Daniels, Siting Renewable Energy on Public Lands: Existing Regulations and Recommendations, Harvard Law Environmental and Energy Law Program (May 13, 2021).
 43 U.S.C. § 1701.
 43 U.S.C. § 1702.
 43 U.S.C. § 1702. “The term ‘multiple use’” means the management of the public lands and their various resource values so that they are utilized in the combination that will best meet the present and future needs of the American people; making the most judicious use of the land for some or all of these resources or related services over areas large enough to provide sufficient latitude for periodic adjustments in use to conform to changing needs and conditions; the use of some land for less than all of the resources; a combination of balanced and diverse resource uses that takes into account the long-term needs of future generations for renewable and nonrenewable resources, including, but not limited to, recreation, range, timber, minerals, watershed, wildlife and fish, and natural scenic, scientific and historical values; and harmonious and coordinated management of the various resources without permanent impairment of the productivity of the land and the quality of the environment with consideration being given to the relative values of the resources and not necessarily to the combination of uses that will give the greatest economic return or the greatest unit output.” 43 U.S.C. § 1702(c).
 43 U.S.C. § 1702(c).
 43 CFR § 2809 (2016).
 Id. BLM has discretion to offer both designated leasing area and other area rights-of-way either of its own volition or because a developer submitted a written expression of interest (EOI) or nomination. Designated leasing areas (DLAs) have “been prescreened by BLM and identified as having high energy generation potential . . . and low potential for conflicts with other resources.” For a map of DLAs refer to The Wilderness Society, Where’s the renewable energy on public lands? This map shows you, (last visited Jan 19, 2023); For more information about where DLAs are sited, refer to Daniels supra note 2.
 For example, within the DLAs, BLM expedites the post-acquisition review process by conducting a majority of the required environmental compliance due diligence before auctioning the rights-of-way while non-DLA leases are subject to review after the right-of-way has been acquired. In addition, the application fees for acquiring rights-of-way in a DLA are reduced compared to non-DLA grants. Within DLAs rights-of-way are called “leases,” and outside of DLAs they are called “grants,” but they amount to the same permissive rights. Id.
 43 U.S.C. § 3004
 As of December 2021, BLM has received proposals for more than 130 wind, solar, and geothermal projects on federal public land as shown on the map below. Of these proposed projects, BLM is currently focused on environmental review and permitting of the following: 39 solar projects (over 29 GW) in Arizona, California, Colorado, New Mexico, Nevada, and Utah; 4 wind projects (2 GW) in California, Idaho, Utah, and Wyoming; 5 geothermal projects (188 MW) in Nevada and Utah; 6 interconnect transmission lines (1.7 GW) critical to supporting renewable energy proposals on non-Federal lands in Arizona, Colorado, New Mexico, and Utah. Dept. of Interior Bureau of Land MGMT., Pub. Land Renewable Energy: Fiscal Year 2021 Rep. to Cong. (2021). BLM has allocated approximately 850,000 acres for solar energy development. Dept. of Interior Bureau of Land Management, Solar Energy, (last visited Jan. 17, 2023).
 The WRFO Planning Area is in northern Colorado. It includes approximately 2.7 million acres of BLM, National Park Service (NPS), U.S. Forest Service (USFS), state, and private lands. Dept. of Interior Bureau of Land Mgmt., White River Field Office Record of Decision and Approved Resource Mgmt. Plan Amendment for Oil and Gas Development (Aug. 2015).
 Dept. of Interior Bureau of Land Mgmt., Environmental Consequences, WRFO Oil and Gas Development Proposed RMPA/Final EIS 2015, 4-498 (2015).
 They argue that oil and gas development is prioritized on land better suited for renewable energy development, limiting any potential for renewable development. Jenny Rowland-Shea & Zainab Mirza, The Oil Industry’s Grip on Public Lands and Waters May Be Slowing Progress Toward Energy Independence, Center for American Progress (Jul. 19, 2022).
 Executive Order 14008 (Feb. 2021).
 Id.; U.S. Gov’t Accountability Off., GAO-17-540, Oil, Gas, and Coal Royalties: Raising Federal Rates Could Decrease Production on Federal Lands but Increase Federal Revenue (2017).
 Western Energy Alliance v. Biden, No. 21-CV-13-SW (D. Wyo. 2022); State of Louisiana v. Biden, 543 F. Supp. 3d 388 (W.D. La. 2021), vacated and remanded sub nom. State of Louisiana v. Biden, 45 F.4th 841 (5th Cir. 2022).
 Sabin Center for Climate Change Law, Western Energy Alliance v. Biden, U.S. Litigation Chart (2023).
 State of Louisiana v. Biden, 543 F. Supp. 3d 388, 396 (W.D. La. 2021), vacated and remanded sub nom. State of Louisiana v. Biden, 45 F.4th 841 (5th Cir. 2022).
 Press Release, Dept. of the Interior, Interior Department Announces Significantly Reformed Onshore Oil and Gas Lease Sales, Dept. of the Interior (Apr 15, 2022).
 BLM eliminated 473 of the 646 previously identified parcels. Affie Ellis, et al., Biden Administration Reopens Federal Lands for Oil and Gas Leasing Under Reformed Program, JD Supra (Apr. 21, 2022).
 To conduct these analyses, DOI used the Office of Management and Budget’s 2021 interim social cost of carbon (SCC). For more information about the social cost of carbon refer to: Legal Challenges to President Biden’s Social Cost of Greenhouse Gases Estimates
 Inflation Reduction Act, § 50265.
 Indigenous Environmental Network, The Inflation Reduction Act of 2022 is NOT a climate bill, IEN Earth (last visited Jan 19, 2023; For comprehensive analysis of the environmental justice implications of the IRA, refer to Breaking Down the Environmental Justice Provisions in the 2022 Inflation Reduction Act.
 EOIs are nominations to the federal government by interested parties asking BLM to include specific lands in future oil and gas competitive lease sales. BLM does not have to grant the request. It reviews the nominations and based on environmental impacts and possible conflicts of interests, determines if the nominated parcels are eligible for oil and gas development. Dept. of Interior Bureau of Land Mgmt, Important Information About Nominations (last visited Jan. 17, 2023).
 In 2016 it offered 1.9 million acres, in 2020 it offered 0.8 million, and in 2021 it offered 1.1 million acres. The historically smaller number in 2021 coincides with the 2021 oil and gas leasing auction pause. Dept. of Interior Bureau of Land Mgmt., Table 11: Acreage Offered at Competitive Sale Auctions Since January 1, 2009, Oil and Gas Statistics (2021).
 Dept. of Interior Bureau of Land Mgmt., Table 13: Expression of Interests – Acres by Calendar Year, Oil and Gas Statistics (2021).
 Dept. of Interior Bureau of Land Mgmt., Table 11: Acreage Offered at Competitive Sale Auctions Since January 1, 2009, Oil and Gas Statistics (2021).
 The average acreage offered between 2009 and 2021 was 4,367,733 acres and the average amount of acreage that received a bid at auction was 1,064,772. Id.
 The total acreage under lease as of 2021 was 24,932,645 acres, of which 51% was producing oil and gas (12,607,203 acres). The percentage of developed leases may increase when developers no longer have the option to purchase non-competitive leases (which tended to be more speculative and less likely to produce oil). Dept. of Interior Bureau of Land Mgmt., Table 2: Total Number of Acres Under Lease As of the Last Day of the Fiscal Year, Oil and Gas Statistics (2021); Dept. of Interior Bureau of Land Mgmt., Table 6: Number of Producing Acres on Federal Lands (2021).
 For example, DOI is currently proposing a ban on oil drilling near Chaco Canyon, which would result “in a projected reduction of 47 oil and gas wells that would not be drilled over the next 20 years.” Dept. of Interior Bureau of Land Mgmt., Proposed Chaco Area Withdrawal Environmental Assessment (Nov. 2022).
 Inflation Reduction Act, § 50262. For more information about how royalty rates on federal land compare with state and offshore royalty rates refer to Taxpayers for Common Sense, Royally Losing: Higher Royalties on State and Offshore Oil and Gas Production Reap Billions More than Drilling on Federal Lands (Feb. 2020); see also Dept. of the Interior, Report on the Federal Oil and Gas Leasing Program (Nov. 2021).
 Inflation Reduction Act, § 50262.
 Executive Order 14008 (Feb. 2021); Dept. of the Interior, Report on the Federal Oil and Gas Leasing Program (Nov. 2021).
 Press Release, Dept. of the Interior, Interior Department Announces Significantly Reformed Onshore Oil and Gas Lease Sales, Dept. of the Interior (Apr 15, 2022).
 Inflation Reduction Act, § 50262.
 Montana, Utah, and Wyoming set the rate at 16.67%. California never offers a lease with a royalty rate less than 16.67% and North Dakota varies county by county with some using 16.67% and others using 18.75%. Dept. of the Interior, Report on the Federal Oil and Gas Leasing Program, 8 (Nov. 2021).
 A 2017 GAO report found that an increase in royalty rates could reduce production on federal land by increasing total overall costs to developers. U.S. Gov’t Accountability Off., GAO-17-540, Oil, Gas, and Coal Royalties: Raising Federal Rates Could Decrease Production on Federal Lands but Increase Federal Revenue (2017). For fiscal year (FY) 2018, sales of oil, gas, and natural gas liquids produced from the Federal and Tribal mineral estate accounted for approximately 8 percent of all oil, 9 percent of domestic natural gas, and 6 percent of all natural gas liquids produced in the United States. Dept. of Interior Bureau of Land Mgmt, About the BLM Oil and Gas Program (last visited Jan. 17, 2023). See also Brian C. Prest, Inflation Reduction Act Can Achieve Emissions Reductions Even with Oil and Gas Provisions, Resources for the Future, (Aug. 15, 2022), (finding that while the differences in royalty rates do not amount to significant reductions in emissions, the IRA overall could achieve emission reductions); but see Ben King, et al., A Congressional Climate Breakthrough, Rhodium (Jul 28, 2022); (finding “increases in royalty rates put downward pressure on future emissions from oil and gas production”). GAO evaluated two studies, one which found that the impact of an increase to 18.75% on production over ten years would be small, especially if the federal royalty rate was less than the royalty rates on state land. The second study analyzed the impact of an increase in the royalty rate from 12.5% to 16.67%, 18.75%, and 22.5%. In each case the study showed that interest in oil and gas leases on federal land would decrease over 25 years except in scenarios where the market changed in such a way that companies could absorb the increased costs.
 Id.; 43 C.F.R. § 2809.11 (2017) (EOIs are $5 per acre in designated leasing areas).
 Dept. of the Interior, Report on the Federal Oil and Gas Leasing Program (Nov. 2021); Inflation Reduction Act, § 50262 (The IRA increased the minimum bid from $2 per acre to $10 per acre, increased the rental rate on a graduated scale from $1.50 per acre per year to $3 per acre per year during the 2 years immediately following the beginning of the lease for new leases, and after that $5 per acre per year for the six following years, and $15 per acre per year after that).
 U.S. Gov’t Accountability Off., Oil and Gas: Onshore Competitive and Noncompetitive Lease Revenues (2020).
 30 USC § 226.
 U.S. Gov’t Accountability Off., GAO-21-138, Oil and Gas: Onshore Competitive and Noncompetitive Lease Revenues (2020).
 30 USC § 226, effective December 19, 2014
 Developers were only required to pay to pay a 12.5% royalty rate, a non-refundable $75 fee, and a per acre rental fee, altogether, Kate Kelly, et al., Backroom Deals: The Hidden World of Noncompetitive Oil and Gas Leasing, Center for American Progress (May 23, 2019).
 The total acreage leased between 2003 and 2019 was 89,118,084 and of that 34,090,627 (38%) was leased non-competitively. Competitive leases yielded $14.3 billion in revenue over the studied period, and account for approximately 55,027,456 million acres in total acreage leased. Noncompetitive leases yielded $1.8 billion in revenue and account for approximately 34 million acres leased. Under the Federal Onshore Oil and Gas Leasing Reform Act of 1987, BLM offers 10-year primary terms for oil and gas lease auctions, but BLM may extend these initial terms. U.S. Gov’t Accountability Off., GAO-21-138, Oil and Gas: Onshore Competitive and Noncompetitive Lease Revenues (2020).
 Id. at 20 & 6 (“Interior’s Office of Natural Resources Revenue (ONRR) collects revenues from oil and gas leases under the specific terms and conditions established in each lease. During the primary lease term, which is generally 10 years, operators pay annual rents until production begins on the leased land. Operators also pay royalties based on the amount of oil and gas produced under the lease. According to BLM, lease terms may be extended beyond the primary term when oil or gas is produced in paying quantities, among other instances.6 In general, a lease remains in effect so long as the operator continues to produce oil or gas in paying quantities.”).
 Press Release, Dept. of the Interior, FACT SHEET: President Biden to Take Action to Uphold Commitment to Restore Balance on Public Lands and Waters, Invest in Clean Energy Future, Dept. of the Interior (Jan. 27, 2021); The lands have wildlife and conservation uses, over 300,000 acres of non-competitively leased land is big game habitat or part of migration corridors. For a report documenting the effect of noncompetitive leasing using case studies refer to: National Wildlife Federation, How Noncompetitive Leasing Threatens Our Public Lands, National Wildlife Federation 1, 2 (2022); for a report on the effect of undeveloped leases refer to: Tyler McIntosh et al., The Oil Industry’s Public Lands Stockpile, Center for Western Priorities (2021). In a press release from Senator Jon Tester’s office about the Leasing Market Efficiency Act which would have ended noncompetitively leased land, multiple stakeholders commented on the benefits, including conserving government resources and allowing public use of the land. Press Release, Jon Tester Newsroom, Tester announces bill to end wasteful non-competitive oil and gas leasing, increase government efficiency, Jon Tester (Jul. 16, 2020); Dept. of Interior Bureau of Land Mgmt., Environmental Consequences, WRFO Oil and Gas Development Proposed RMPA/Final EIS 2015, 4-498 (2015).
 Eric Lipton & Hiroko Tabuchi, Energy Speculators Jump on Chance to Lease Public Land at Bargain Rates, N.Y. Times (Nov. 27, 2018.
 This seems likely after the permitting bill supported by Senator Manchin failed to pass in mid-December. Colin Mortimer, Manchin’s permitting reform effort is dead. Biden’s climate agenda could be a casualty, Vox (Dec. 16, 2022).
 Press Release, Dept. of the Interior, Interior Department Moves Forward with Leasing Provisions Mandated in Inflation Reduction Act, Dept. of the Interior (Oct 6, 2022).