Key Takeaways
The Interior Department’s Bureau of Land Management (BLM) under President Trump is working to remove impediments to oil and gas leasing on federal lands imposed by the Biden administration.
BLM is expediting leasing processes to increase the area available for sales, reducing timeframes, and instituting policies to ensure follow-through on lease sales, consistent with law.
Under Biden, royalties on oil and gas increased by a third, bonding requirements increased 15-fold, and other actions made oil and gas leasing more expensive and burdensome, in keeping with Biden’s campaign promise to “end fossil fuels.”
Leasing was also paused until Congress enacted language requiring minimum sales, resulting in the Biden administration leasing fewer acres than any administration since WWII.
Trump’s Interior Department is also working to increase offshore production with a commingling policy allowing production from varying reservoirs through a single conduit in the renamed Gulf of America.
During the Biden administration, fees and regulations were slashed to deploy intermittent renewable energy on federal lands and waters, despite these sources’ limited utility to provide reliable and affordable energy.
A new Bureau of Land Management (BLM) policy expedites the leasing process on public lands to increase the amount available for onshore oil and gas leases, decrease the leasing timeframes, and ensure oil and gas lease sales follow federal laws. BLM will complete reviews of parcels designated for oil and gas lease sales within six months from the start of scoping — a process that can take more than a year. According to BLM, parcel reviews, which consider whether oil and gas leasing is aligned with regional land use plans, will be conducted simultaneously with congressionally mandated environmental reviews. BLM reviews previously took between eight and 15 months to complete.
The Biden administration resumed oil and gas leases on federal lands in April 2022, forced by conditions in the Inflation Reduction Act. Still, it also increased the royalty rate that leaseholders would have to pay the federal government. The Biden administration estimated the new royalty rate would increase costs for oil and gas companies by $1.8 billion. Besides royalty rate increases, oil and gas companies faced higher bonding rates, increased lease rents, and minimum auction bids. Minimum lease bonds were increased to $150,000 from $10,000 — a factor of 15. Royalty rates were increased by a third to 16.67 percent from 12.5 percent, and the minimum amount companies could bid at oil and gas auctions was increased to $10 an acre from $2 — a factor increase of 5. The rental rate for a 10-year lease doubled to $3 an acre for the first two years, with a planned rise to $15 per acre in the final years.
In January 2025, President Biden announced plans to prohibit offshore drilling along the East Coast, the eastern Gulf of Mexico and the Pacific Ocean’s waters near the shores of California, Oregon, and Washington in keeping with his campaign promise to “end fossil fuels,” using a 72-year-old law that excludes areas from any exploration or possible development. He used a provision that gives presidents wide discretion to exclude specific waters from leasing permanently in the 1953 Outer Continental Shelf Lands Act, which governs offshore oil and gas development. The Biden administration leased fewer acres than any administration since WWII. The Trump administration is working to rescind the Biden administration’s negative policies toward oil and gas development on public lands.
While the Biden administration was taking these steps against future oil and gas production on federal lands, it was promoting renewable energy production on federal lands — actions that the Trump administration is now working to undo. The Trump Interior Department plans to rescind a Biden-era rule that encouraged renewables development on federal lands by cutting as much as 80% of the acreage rental rates and capacity fees for wind and solar power projects. It also allowed cuts in some fees if the project developers used “American-made parts and materials.”
That rule has been in place since July, and biases federal land policy toward promoting wind, solar, and geothermal power projects over other energy sources, such as oil and natural gas. Contrary to popular thought, wind and solar power are very expensive since they need back-up power when the wind isn’t blowing or the sun isn’t shining in the form of costly batteries or conventional technology. This essentially results in duplicative power sources to maintain reliability on the grid.
New Commingling Policy
The Trump Interior Department instituted a new commingling policy for the Gulf of Mexico (America) to increase offshore U.S. oil production. Commingling refers to “the simultaneous production of hydrocarbon from multiple reservoirs through a single production conduit.” The new policy allows much higher pressure differentials, increasing it from 200 to 1,500 psi. According to the Interior Department, the commingling policy will lead to lower costs and more jobs, and will “also enhance conservation by expediting development from each reservoir.”
Conclusion
The Trump administration is working to undo a number of Biden-era policies that threaten the future production of oil and natural gas. To fast-track oil and gas development and promote energy dominance, BLM is expediting the leasing process on public lands to increase the amount available for onshore oil and gas leases, decrease the leasing timeframes, and ensure oil and gas lease sales follow federal laws. BLM is now expected to complete reviews of parcels designated for oil and gas lease sales within six months from the start of scoping. The Interior Department is also taking other actions regarding offshore oil production with a new comingling policy in the Gulf of America.
