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Fluid Mineral Leases and Leasing Process rule (2024)

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The Fluid Mineral Leases and Leasing Process rule is a significant rule issued by the Bureau of Land Management (BLM) effective June 22, 2024, that updated fiscal regulations for oil and gas-related leases on public lands with the goal of decreasing the cost burden on the American public, among other provisions. BLM issued this rule pursuant to its authority under the Mineral Leasing Act of 1920 and the Mineral Leasing Act for Acquired Lands of 1947.[1]

HIGHLIGHTS
  • Name: Fluid Mineral Leases and Leasing Process
  • Code of Federal Regulations: 43 CFR 3000, 3100, 3110, 3120, 3130, 3140, 3150, 3160, 3170, and 3180
  • Agency: Bureau of Land Management (BLM)
  • Action: Final rule
  • Type of significant rule: Economically significant rule

    • Timeline

    The following timeline details key rulemaking activity:

    Background

    The Mineral Leasing Act of 1920 and the Mineral Leasing Act for Acquired Lands of 1947 authorized the Bureau of Land Management (BLM) to manage the leasing and operation of federal lands for oil and gas-related activities. The BLM hadn't updated their onshore oil and gas program regulations since 1988, according to the Fluid Mineral Leases and Leasing Program proposed rule. The BLM contended in the proposed rule that the regulations were outdated, and didn't protect the fiscal interests of the American public or promote leasing practices consistent with diligent development requirements and multiple-use and sustained-yield principles.Cite error: Invalid <ref> tag; invalid names, e.g. too many

    Additionally, Congress updated oil and gas program fiscal terms and established a new leasing scheme through the Inflation Reduction Act (IRA) of 2022 and mandated that the BLM reduce the number of idled wells through the Infrastructure Investment and Jobs Act (IIJA) of 2021. The BLM issued the Fluid Mineral Leases and Leasing Process final rule to address new statutory requirements through the IRA and IIJA.[1]Cite error: Invalid <ref> tag; invalid names, e.g. too many

    Summary of the rule

    The following is a summary of the rule from the rule's entry in the Federal Register:[1]

    “ The Bureau of Land Management (BLM) is revising its oil and gas leasing regulations. Among other changes, the final rule implements provisions of the Inflation Reduction Act (IRA) pertaining to royalty rates, rentals, and minimum bids; updates the bonding requirements for leasing, development, and production; and revises some operating requirements. The final rule will improve the BLM's leasing process by ensuring proper stewardship of public lands and resources.[3] ”

    Summary of provisions

    The following is a summary of the provisions from the rule's entry in the Federal Register:[1]

    “

    Overall, this rule will enhance the BLM's administration of oil and gas-related activities on America's public lands and reflects Congress's changes to the oil and gas program in the IRA. Specifically, the rule will reflect requirements of the IRA by increasing royalty rates, rentals, and minimum bids for BLM-issued oil and gas leases, and by imposing a fee for the submittal of an expression of interest (EOI) for leasing Federal oil and gas. The rule also updates the bonding requirements for leasing, development, and production to address shortcomings identified in reports by the Government Accountability Office (GAO) and the Department of the Interior's (DOI's) Office of Inspector General (OIG). Collectively, the BLM proposed these changes to bring the regulations into compliance with the IRA and the Infrastructure Investment and Jobs Act (IIJA) mandates and to ensure that reclamation costs are not borne by the American public. The BLM is also adjusting its cost recovery mechanisms so that project applicants provide a more appropriate share of the BLM's up-front costs for processing these applications. Finally, the BLM is implementing several changes to focus leasing on areas with fewer resource conflicts. The BLM's final rule will be the first comprehensive update to the Federal onshore oil and gas program's regulatory framework since 1988.[3]

    		”

    Significant impact

    See also: Significant regulatory action

    Executive Order 12866, issued by President Bill Clinton (D) in 1993, directed the Office of Management and Budget (OMB) to determine which agency rules qualify as significant rules and thus are subject to OMB review.

    Significant rules have had or might have a large impact on the economy, environment, public health, or state or local governments. These actions may also conflict with other rules or presidential priorities. Executive Order 12866 further defined an economically significant rule as a significant rule with an associated economic impact of $100 million or more. Executive Order 14094, issued by President Joe Biden (D) on April 6, 2023, made changes to Executive Order 12866, including referring to economically significant rules as section 3(f)(1) significant rules and raising the monetary threshold for economic significance to $200 million or more.[1]


    The text of the Fluid Mineral Leases and Leasing Process rule states that OMB deemed this rule a section 3(f)(1) rule under E.O. 12866, as amended by E.O. 14094:

    “ OIRA has determined that this final rule constitutes a 'significant regulatory action' within the scope of section 3(f)(1) of E.O. 12866, as amended by E.O. 14094.[3] ”

    Text of the rule

    The full text of the rule is available below:[1]

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Federal Register, "Fluid Mineral Leases and Leasing Process," April 30, 2024
    2. ↑ Congress.gov, "S.J.Res.78," May 16, 2024
    3. ↑ 3.0 3.1 3.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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