The Department of the Interior proposed major changes to Bureau of Land Management (BLM) rules regarding onshore oil and gas leasing and waste prevention to promote energy dominance and encourage domestic energy production. It is proposing to loosen two major Biden-era regulations: one on methane releases and the other on plugging non-operating wells. Producing more domestic energy provides jobs and enhances security while making products more affordable.
In 2024, the Biden administration dramatically raised the cost of bonds that oil and gas companies must pay the government to ensure that their wells will be cleaned up. The Trump administration is proposing to drop those rates back to their pre-Biden levels, before they increased them 20-fold from $25,000 statewide to $500,000 statewide. The rule would revert to the system in place at the beginning of 2024, “while gathering public input on a fair long-term approach.” In 2021, an analysis by non-profit Resources for the Future estimated that it costs about $20,000 to plug a single oil and gas well.
Also in 2024, the Biden administration clamped down on methane emissions from oil and gas produced on federal lands by requiring oil and gas firms to either certify that they will capture all of the oil and gas produced by their wells or produce a plan to reduce their methane releases. The Trump Interior Department is proposing to remove that requirement.
Oil drillers usually flare (burn-off) natural gas produced as a byproduct to oil when they lack pipelines to move it to market or when prices are too low to make transporting it worthwhile. Other reasons to flare natural gas include safety concerns and connectivity issues. However, it is always in the best interest of an oil and gas producer to capture and sell the supplemental natural gas on the marketplace whenever possible, and that is what oil companies do. A study of the flaring of natural gas from wells in the United States by consultant Rystad Energy for the Environmental Defense Fund determined that infrastructure capacity limits are the greatest reason for flaring gas that cannot be captured, but the Biden Administration had made it more difficult to build pipelines, lessening the alternatives for oil and gas companies. The Trump Administration has pushed to streamline permitting for pipeline construction which would serve as a win for the government and companies by reducing the need for flaring.
Nevertheless, U.S. oil and gas companies have reduced their methane releases. ExxonMobil, for example, has cut its methane emissions intensity by more than 60% since 2016 and expects to achieve its planned reduction of 70-80% in 2026.
The Interior Department is also expected to revise definitions for when venting and flaring, which release methane, is authorized, according to its press release. The rule is also expected to establish clearer definitions for avoidable and unavoidable losses, and emergency situations and measurement standards. The revisions to the waste prevention rule are expected to reduce compliance costs for energy operators by nearly $17 million annually.
According to Interior, the proposed leasing rule would also authorize noncompetitive leasing following competitive auctions, eliminate the expression-of-interest leasing preference review process, shorten public participation periods from 90 days to 10 days, modernize filing fees and provide replacement lease sales when scheduled offerings are canceled or delayed. Additional provisions would limit lease suspension approvals to one year while establishing new timing requirements.
According to Interior’s press release, the reforms will eliminate unnecessary obstacles to domestic energy production, modernize resource management, and strengthen the nation’s long-term energy resilience. They will further accelerate development, enhance clarity for operators, expand economic opportunity, and reinforce the nation’s commitment to responsible stewardship and American energy leadership.
The changes will undergo a 60-day public comment period following their publication in the Federal Register.
Conclusion
To increase U.S. energy dominance, the Trump Interior Department is proposing major changes to Bureau of Land Management rules regarding onshore oil and gas leasing and waste prevention. It proposes loosening two major Biden-era regulations on methane emissions and on plugging non-operating wells, as well as cutting public comment periods from 90 to 10 days, among other changes. It would lower the statewide bonding minimum from $500,000 required by the Biden administration to the previous standard of $25,000. It would remove the Biden-era requirement for oil and gas firms to either certify that they will capture all of the oil and gas produced by their wells or produce a plan to reduce their methane releases, as U.S. oil and gas companies are already making progress. Oil and gas companies would prefer to sell their excess gas as long as they have the pipeline capacity to move it to market.