Feds Must Act On New Oil and Gas Rules
By Pegah Jalali
Last month, the Department of the Interior announced that the Bureau of Ocean Energy Management (BOEM) and Bureau of Land Management (BLM) will be taking steps to comply with congressional direction on oil and gas leasing through the Inflation Reduction Act (IRA).
The IRA requires that any lease sales or permits issued for renewable energy, onshore or offshore, must be accompanied by lease sales for oil and gas. Additionally, DOI is required to hold a number of specific offshore lease sales regardless of any renewable energy leases.
DOI is swiftly offering leases to on and offshore oil and gas developers. BOEM has prepared a Draft Supplemental Environmental Impact Statement (EIS) for two Gulf of Mexico sales: lease sales 259 and 261. Congress directed that Lease Sale 259 be held by March 31, 2023, and Lease Sale 261 by September 30, 2023. BLM also announced they will begin scoping for the next onshore oil and gas lease sales in New Mexico, Wyoming, Kansas, and Nebraska, with the majority of area under consideration in Wyoming.
Even though the IRA provided important modernization of BLM’s oil and gas leasing program, including increasing the minimum royalty rate, minimum bid, and rental rates; assessing a fee for the filing of Expressions of Interest (EOIs), and eliminating non-competitive leasing (a key policy win secured by Colorado U.S. Senator John Hickenlooper), the Biden administration has yet to initiate its rulemaking on the federal oil and gas program. Such rulemaking is necessary for implementing both the reform policies that were included in the IRA and other badly needed changes like bonding reform that DOI noted in its report last November. In order to ensure these reforms are implemented as soon as possible, DOI must get the rulemaking process started quickly, and with the announcement of these new sales, we need to push the administration to get a rule out.
DOI should not move forward with any new leasing—including the sales announced in New Mexico and Wyoming—until the agency undertakes a rulemaking to, at a minimum:
- Implement the vital policy changes included in the Inflation Reduction Act, which established the long-overdue increases to fiscal rates and terms for leasing and development on public lands, and eliminated the wasteful practice of leasing lands uncompetitively for just $1.50/acre;
- Address all of the remaining core problems that DOI highlighted in its report from November of last year by: requiring oil and gas companies to fully pay for potential clean-up costs so that Coloradans and our communities aren’t stuck with the bill for well clean-up, avoiding the massive leasing of areas with low potential for oil and gas development, and creating and ensuring a more transparent process that provides meaningful opportunity for public engagement and Tribal consultation.
- Utilize all available discretion to pursue additional changes that will move BLM’s stewardship of our public lands closer in line with the public’s broad interest in public lands.
While the IRA’s oil and gas provisions contained some major steps forward, we can’t benefit from them until DOI fulfills its responsibility and sets up the rules needed to implement this landmark law. Our communities, our public lands, and our local economies shouldn’t be forced to wait any longer.
