Biden Administration Enacts New Rule to Increase Costs for Oil and Gas Drilling on Federal Lands

The new regulations aim to modernize the outdated federal oil and gas leasing program, raising royalties and bonding requirements to better protect public lands and taxpayers.

President Biden's administration finalized a rule increasing royalties for oil and gas extraction on federal lands from 12.5% to 16.67%.
The rule also raises the minimum bid for leasing federal parcels and significantly increases the minimum lease bond to $150,000.
These changes were mandated by the Inflation Reduction Act of 2022, aiming to cut wasteful speculation and increase returns for the public.
The reforms intend to protect sensitive wildlife habitats and cultural sites, and hold companies accountable for environmental cleanup costs.
Critics argue the rule could drive small producers off public lands and increase dependency on foreign oil, while supporters applaud the move for ensuring fair taxpayer returns and environmental responsibility.