DOI Proposes Revised Oil and Gas Leasing Regulations to Reflect IRA Provisions on Royalty Rates, Rentals, and Minimum Bids

On July 24, 2023, BLM proposed to revise oil and gas leasing regulations to reflect IRA sections 50262 and 50265, stipulating royalty rates, rental rates, minimum bids, and updated bonding requirements. BLM seeks to comprehensively update the Federal onshore oil and gas program’s regulatory framework for the first time since 1988. The proposed changes reflect that in the IRA, Congress updated the onshore oil and gas program’s fiscal terms and established a new leasing scheme for Federal Lands. The IRA provisions that BLM intends to implement through this rulemaking are: (1) Section 50262—Mineral Leasing Act Modernization; and (2) Section 50265—Ensuring Energy Security. Section 50262 increases the onshore program’s statutory royalty rate, minimum rental rates, and minimum lease bid, and establishes a new fee on expressions of interest (EOI) in addition to preventing lease issuance on a non-competitive basis. Section 50265 restricts BLM’s ability to issue a right-of-way for wind or solar energy development on Federal land. Comments must be submitted to BLM on or before September 22, 2023.