Bureau of Land Management in U.S. Department of Interior issued new rules last week that will result in producers paying more to develop and produce crude oil and natural gas on federal lands. Oil & Gas Journal said the rules for fluid mineral leases and leasing process are BLM’s first comprehensive updates to the federal onshore oil and gas leasing regulations since 1988, first update to minimum bonding levels since 1960, and first increase in royalty rates in more than 100 years. Debra Haaland, secretary of the Interior and former U.S. representative from New Mexico, said April 12, “These are the most significant reforms to the federal oil and gas leasing program in decades, and they will cut wasteful speculation, increase returns for the public, and protect taxpayers from being saddled with the costs of environmental cleanups.”
BLM said the rules will help its efforts to focus oil and gas leasing in areas that are more likely to be developed (with existing infrastructure and high oil fpotential) and reduce the pressure to develop areas with sensitive wildlife habitat, cultural resources or high recreational usage.
Royalty rates for leases are 16.67 percent until Aug. 16, 2032, when 16.67 percent becomes the minimum royalty rate (up from the current minimum of 12.5 percent). And the new regulations raise the minimum amount that companies can bid at auctions for federal leases to $10 per acre (previous $2 per acre).