Section 50262 of the IRA amends Section 17 the Mineral Leasing Act, 30 U.S.C. § 226, to increase the minimum royalties, rents, and bids for oil and gas leases on federal lands as follows:
1) The minimum royalty for oil and gas leases is increased to 16.66% (up from 12.5%). Section 50262 of the IRA also specifies that 16.66% is the maximum royalty to be applied to leases issued in the ten years following enactment of the IRA. The section also specifies that, for reinstated leases where operators have previously failed to adhere to lease requirements, a royalty rate of 20% will apply. 30 U.S.C. § 188(e)(3).
2) The minimum rent for oil and gas leases is increased to $3 per acre for the first two years, $5 per acre for the subsequent six years, and $10 per acre after that (up from $1.50 per acre). The section specifies higher minimum rents (ranging from $10 to $20) for reinstated leases where operators have previously failed to adhere to lease requirements.
3) The minimum bid for oil and gas leases is increased to $10 per acre (up from $3 per acre). The specified minimum is to remain in effect for 10 years. After that, the Bureau of Land Management (“BLM”) can increase the amount of the minimum bid. 30 U.S.C. § 226(b).
Section 50262 of the IRA also amends the Mineral Leasing Act to require BLM to collect a fee from any person who nominates federal land for oil and gas leasing. The fee must start at $5 per acre and be adjusted for inflation at least every four years. 30 U.S.C. § 226(d).
Finally, section 50262 of the IRA amends the Mineral Leasing Act to prevent BLM issuing leases on a non-competitive basis. The section provides that, where land is made available for leasing through a competitive process and no bids are accepted or received, the Secretary may make that land available for a new round of competitive bidding.
Agency Actions:
- DOI Finalizes Fluid Mineral Leases and Leasing Process Rule with Updated Fiscal Terms Reflecting IRA Provisions
- DOI Proposes Revised Oil and Gas Leasing Regulations to Reflect IRA Provisions on Royalty Rates, Rentals, and Minimum Bids
- Interior Department Takes Steps to Modernize Oil & Gas Leasing on Public Lands
- DOI Issues Guidance on Oil and Gas Leasing