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BLM'S Public Lands Rule
Finalized BLM Rule Reforms Oil and Gas Leasing
For decades, consumptive and non-consumptive outdoor enthusiasts have championed responsible land use and energy development, especially in accounting for our wildlife species and sensitive ecosystems. Our community dedicates much of its time to exploring our public lands and as such, regularly see the effects of development on our outdoor traditions and wildlife populations.
That's why we are pleased to see the Bureau of Land Management take strong action to conserve public lands by finalizing their Fluid Mineral Leases and Leasing Process Rule — also known as the Onshore Oil and Gas Leasing Rule. Some of these revised regulations stem directly from the Inflation Reduction Act, enacted by Congress in 2022, and are essential for enabling BLM staff to enforce the new law. Many of the BLM's rules for oil and gas leasing on public lands were over fifty years old; these updated reforms ensure fair returns for taxpayers and ensure funds are available for necessary clean-ups and reclamation.
Here are a few specific provisions from the updated rule that reflect a positive change for wildlife and people alike: Fair market royalty rates — The reforms permanently increase the fees required to lease and drill on public lands, which have not been increased in more than 100 years. For leases issued during the 10 years after the effective date of the Inflation Reduction Act the royalty rate will be 16.67% (up from 12.5%), and after August 16, 2032, the rate of 16.67% will become the minimum. Increases bonding rates to a reasonable level — When companies utilize our public lands for oil and gas extraction, the government must make sure that those companies pay for clean-ups — not the American taxpayers. The current amounts companies must cover before they begin drilling were set over 60 years ago and have never been increased to account for inflation or the costs of cleaning up modern wells. The updated rule increases the minimum lease bond amount for developers/operators from $10,000 to $150,000, and the minimum statewide bond to $500,000. This ensures that companies cover the expected clean-up costs for current and future oil and gas activity on our public lands. Raises rate for leasing public lands — Typically, companies leasing our public lands are able to retain federal onshore oil and gas leases for 10-year terms. Under the updated rule the rental fees are structured as follows: $3 per acre per year for the first two years, $5 per acre per year for the next six years, and $15 per acre per year thereafter. After August 16, 2032, these rates will serve as minimums and may increase more. This structure incentivizes developers to relinquish leases they do not intend to develop. |
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Applies leasing criteria — New leasing criteria will be applied to companies, which offer a more balanced approach to managing our shared resources better. The updated criteria will help steer companies away from areas that contain sensitive wildlife habitat and cultural resources or have high recreational usage or other special resources and values. These reforms will also reduce the practice of “speculative leasing,” where the oil and gas industry ties up land with little to no chance of development.
| Arizona Wildlife Federation PO Box 1182, Mesa, AZ 85211 The Arizona Wildlife Federation is a Registered 501(c)(3) Nonprofit Organization. EIN# 86-0076994 |
