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Status
The Inflation Reduction Act (IRA) increased the fees for oil and gas leases, and tied new onshore lease auctions to new renewables auctions.
On Nov. 21, 2022 the Bureau of Land Management (BLM) issued guidance explaining how it would implement the IRA’s changes to the onshore oil and gas leasing program. In April 2024, BLM finalized revisions to leasing royalty rates, rentals, minimum bids, and bonding requirements. BLM is continuing to plan upcoming lease auctions.
Why it Matters
Oil and gas extraction presents risks to nearby communities and conservation areas. Drilling on federal lands is regulated by the Department of the Interior’s Bureau of Land Management (BLM), which controls onshore energy extraction by awarding leases to bidders and regulating where and how extraction occurs.
The Trump administration prioritized opening up public lands to boost domestic oil and gas production as part of its effort to promote “energy independence and economic growth.”
When President Biden entered office, the Department of the Interior (DOI) suspended all onshore oil and gas leasing for a 60-day period and then paused all leasing pending a comprehensive review of the program. In Apr. 2022, the DOI announced that the BLM would issue notices for lease sales at increased royalty rates.
Key Resources
Timeline
OBAMA ADMINISTRATION
May 17, 2010 BLM issued Instruction Memorandum No. 2010-117, which introduced the concept of a master lease plan (MLP) aimed at coordinating environmental, recreational, historical, and other interests when conducting oil and gas leasing on federal and Indian lands.
Jan. 28 2013 BLM issued Instruction Memorandum No. 2013-101 which further incorporated MLPs into BLM’s lease planning process.
TRUMP ADMINISTRATION
Mar. 28-29, 2017 President Trump issued Executive Order 13783 which directed executive agencies to review and revise regulations that burden domestic energy production. Interior Secretary Ryan Zinke issued Secretarial Order 3349 which directs the DOI to review and revise regulations that burden domestic energy production in line with EO 13783.
July 6, 2017 Interior Secretary Ryan Zinke issued Secretarial Order 3354 which directed BLM to more regularly hold oil and gas lease sales and to make its permitting process more efficient.
Oct. 24, 2017 The Department of Interior issued its final report pursuant to Executive Order 13783 documenting regulations that may burden domestic energy production and steps the DOI has taken or plans to take to reduce the regulatory burden.
Jan. 31, 2018 BLM issued Instruction Memorandum No. 2018-034 which eliminated the use of Obama-era master leasing plans (MLPs) in favor of prior resource management plans (RMPs). MLPs were intended to reduce conflict on public lands where competing interests often want to utilize resources on the same parcel. RMPs are developed at the field office or state and focus primarily on oil and gas development. The Instruction Memorandum also reduces the time available to oppose proposed lease sales and allows for the use of Determination of NEPA Adequacy (DNA) in lieu of an environmental impact assessment.
September 5-6, 2018 BLM lease sales in New Mexico take in nearly $1 billion in revenue, a record. In 2017, BLM as a whole took in only $360 million in revenue.
Oct. 2018 BLM removed more than a million acres of land from auction in response to the US District Court for the District of Idaho’s preliminary injunction.
Mar. 12, 2019 Congress passed and the President signed the Natural Resources Management Act (NMRA), which expands federal wilderness and conservation areas and withdraws certain conservation areas from mining. The NMRA permanently reauthorizes the Land and Water Conservation Fund (LWCF), which provides funds for federal and state conservation efforts. The LWCF is primarily funded from royalties on lease sales of federal offshore lands for oil and gas production.
BIDEN ADMINISTRATION
Jan. 20, 2021 President Biden revoked the Trump Executive Order 13783, which directed federal agencies to streamline the oil and gas leasing process and suspend, revise, or rescind regulations that burdened the development of domestic energy resources. DOI suspended all onshore oil and gas leasing for a 60-day period.
Jan. 27, 2021 President Biden signed EO 14008 that pauses all offshore and onshore oil and gas leasing pending a comprehensive review of the leasing and permitting program. It also revokes Trump’s EO 13795.
June 15, 2021 A federal judge in the Western District of Louisiana issued a preliminary injunction blocking President Biden’s pause on oil and gas lease sales. Louisiana v. Biden, Docket No. 2:21-CV-00778 (W.D. La.).
Aug. 24, 2021 DOI announced that it will continue to prepare lease sales during the appeal process.
Nov. 26, 2021 DOI issued a report reviewing the federal oil and gas leasing process and making recommendations for reform. The report found, among other things, that the current system does not give taxpayers fair returns and does not fully account for environmental harm, and that the current system encourages speculation by and decreases competition among oil companies.
Apr. 18, 2022 BLM published final environmental assessments and sale notices for June 2022 lease sales. The final sale notices reduced the acreage of land available for leasing on public lands by 80% and increased royalty rates.
June 29, 2022 For the first time during the Biden administration, BLM held lease sales for oil and gas drilling on federal lands, citing the preliminary injunction that stopped the Biden administration’s pause on lease sales. The auctions cover 173 parcels in Wyoming, Colorado, Montana, Nevada, New Mexico, North Dakota, Oklahoma, and Utah.
Aug. 16, 2022 President Biden signed the Inflation Reduction Act (IRA) into law. The IRA raises minimum rates and adds new fees for onshore oil and gas lease auctions. Read more about these requirements.
Aug. 17-18 2022 The 5th Circuit vacated the preliminary injunction that blocked the Biden administration’s pause on new oil and gas leases and remands the case for additional proceedings. Louisiana v. Biden, No. 21-30505 (5th Cir.). Next day, the Western District of Louisiana issued a permanent injunction blocking President Biden’s pause on new oil and gas leases in the thirteen plaintiff states. Louisiana v. Biden, No. 2:21-CV-00778 (W.D. La.).
Oct. 6, 2022 BLM announced it will hold onshore oil and gas lease sales in accordance with the IRA.
Nov. 21, 2022 BLM issued updated guidance on implementing the IRA’s changes to the onshore oil and gas leasing program.
Apr. 3, 2023 BLM proposed the Conservation and Landscape Health Rule that would establish a new framework for BLM’s “multiple use and sustained yield” mission. The proposal clarifies that conservation is a use of federal land “on par with” mineral extraction and other uses.
July 24, 2023 BLM proposed the Fluid Mineral Leases and Leasing Process Rule, which would revise the federal onshore oil and gas leasing royalty rates, rentals, minimum bids, and bonding requirements. The agency wrote that these proposed updates reflect the IRA’s leasing provisions and BLM’s multiple-use and sustained-yield mandate. For more on the IRA’s onshore leasing provisions, see Sarah Hart’s paper.
Apr. 12, 2024 BLM finalized the Fluid Mineral Leases and Leasing Process Rule. The final rule implements leasing provisions of the IRA by increasing royalty rates, rentals, and minimum bids and updating that agency’s interpretation of its multiple-use mandate. For background on the IRA’s onshore leasing provisions, see Potential Impacts of the IRA’s Leasing Provisions by Sarah Hart (JD ‘24).
May 9, 2024 BLM finalized the Conservation and Landscape Health Rule, which the agency says will “advance [the agency’s] multiple use and sustained yield mission by prioritizing the health and resilience of ecosystems across public lands.”
May 15, 2024 Industry groups filed a petition in the District of Wyoming arguing that the Fluid Mineral Leases and Leasing Process Rule is “procedurally deficient, arbitrary and capricious, and contrary to law” and asking the court to vacate the rule. Western Energy Alliance et al. v. DOI et al., Docket No. 2:24-cv-00100-KHR (D. Wyo.).