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US Interior Unveils Oil and Gas Rule Changes to Ease Federal Leasing

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The US Department of the Interior announced Monday proposed changes to federal oil and gas leasing and waste prevention rules aimed at lowering costs, reducing regulatory burdens and supporting domestic energy production.

The department plans to replace the Biden-era statewide bonding requirement of $500,000 with the previous $25,000 standard while it seeks public input on a longer-term approach, according to the announcement.

The department also expects revisions to the waste prevention rule to reduce compliance costs by nearly $17 million per year, while simplifying requirements and improving transparency.

Bloomberg estimated that the change represents a 95% reduction in the statewide bonding requirement for oil and gas operators.

"These targeted updates cut through the red tape that has historically deterred investment, ensuring our public lands remain a reliable engine for economic growth and innovation," Secretary of the Interior Doug Burgum said.

The proposed rule would allow companies to obtain leases without an auction and would remove the review process previously required before land could be offered for lease.

DOI also plans to shorten public participation periods for lease actions from 90 days to 10 days, while seeking feedback on current bond levels and on updating filing fees.

The proposal would also allow replacement lease sales when prior offerings are delayed or canceled and would limit lease suspension approvals to 1 year, with revised timing requirements.

Separately, the waste prevention proposal would remove waste minimization plans and self-certification requirements from permit-to-drill applications, according to the department.

The rule would also replace subjective evaluations with defined royalty standards and establish clearer definitions for avoidable and unavoidable losses, venting, flaring, emergencies, and measurement requirements.

Interior said combining the revisions into a single rulemaking would provide greater clarity for operators. The agency also plans to rename the regulation "Royalty for Oil and Gas Lost from Onshore Federal and Indian Leases."

Publication of the proposals in the Federal Register will begin a 60-day public comment period. The department said the changes support broader efforts under Executive Order 14154, Secretary's Order 3418 and the Working Families Tax Cuts Act to expand domestic energy production.

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