Interior Department Announces Sweeping New Rules for Federal Oil and Gas Leases

The Department of the Interior on Monday proposed major changes to Bureau of Land Management rules on oil and gas leasing and waste prevention, including lowering the public comment period for lease sales from 90 days to 10 days and swapping a Biden-era statewide bond of $500,000 with the prior $25,000 requirement.

The department did not say when the proposed rules would take effect.

Officials say such administrative barriers have deterred investment and stymied production on federal and Indian lands. The proposals for the leasing rule would approve noncompetitive leases after competitive auctions, cut the expression of interest leasing preference review, update filing fees, and limit lease suspension approvals to one year with pro-development timing requirements.

The changes to the waste prevention rule will replace the requirement for waste minimization plans and self-certification statements in drilling permit applications with “clear, objective standards,” the department said.

Defined royalty standards will replace subjective evaluations made when operators submit a sundry notice requesting approval to flare or vent waste gas. The rule will be renamed the “Royalty for Oil and Gas Lost from Onshore Federal and Indian Leases.”

“Energy Dominance requires regulatory clarity,” Interior Secretary Doug Burgum said in a statement. “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.”

The department said the adjustments are anticipated to slash annual compliance costs by nearly $17 million, improve operational certainty, and minimize litigation risks, while continuing responsible resource management. Notices of the proposed rules will appear in the Federal Register, marking the opening of a 60-day public comment period.

In line with Executive Order 14154 “Unleashing American Energy,” Secretary’s Order 3418, and the Working Families Tax Cuts Act, the new rule would continue the Trump administration’s steps to allow the Bureau of Land Management to complete parcel review processes for oil and gas lease sales within six months, repeal Biden-era drilling limits in Alaska, and open most of the state up for oil drilling.

A shorter window for public participation and the sunsetting of certain review steps are expected to help operators, according to the department.

The new waste rule undoes an approach based on case-by-case evaluation, as well as planning mandates with objective standards tied to royalty obligations for lost resources.

The new approach comes after years of debate and legal challenges surrounding prior rules targeting methane venting and flaring on public lands.

“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,” former Interior Secretary Debra Haaland said when the Biden-era rules were introduced.

There will be a 60-day public comment period for each rule after it’s published in the Federal Registrar.