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EEN Applauds Reforms that Modernize Oil and Gas Leasing on Public Lands

Winding road through grassy field with mountains in the distance

Today, the Bureau of Land Management (BLM) announced final standards that will modernize oil and gas leasing on public lands. These long-overdue reforms update onshore royalty rates for the first time in over 100 years and bonding requirements for the first time in 60 years, a move that will advance the responsible stewardship of America’s lands and our precious natural resources and defend the lives and health of children and other vulnerable Americans by reducing emissions of carbon pollution and harmful toxins into our air and water. The finalized rule also ensures oil and gas companies cover a greater share of the cost of environmental remediation to better safeguard against the next generation being saddled with despoiled land, water, and air and a billion-dollar price tag for a mess they didn’t make.

On behalf of the over 33,000 pro-life Christians who spoke out in support of these reforms, along with a majority of western voters, EEN celebrates these common-sense updates that will bring oil and gas leasing into the 21st century and encourage better stewardship of God’s creation. 

In response to the BLM’s announcement, President & CEO of the Evangelical Environmental Network The Rev. Dr. Jessica Moerman released the following statement:

“As evangelicals, we take seriously Jesus’s teaching in Luke 16:10 that says ‘whoever can be trusted with a little can also be trusted with a lot, and whoever is dishonest with a little is dishonest with a lot.’ For far too long, oil and gas companies who have been entrusted to steward our precious natural resources well have not been ‘good neighbors’ to neighboring communities or to American taxpayers. The BLM’s common-sense reforms and modernizations finally bring oil and gas leasing practices into the 21st century. This is a win for God’s creation, our children’s health and future, fiscal responsibility, and fairness for the American taxpayer.”

Key modernizations that protect God’s creation, defend health, and advance fiscal responsibility and fairness include:  

  • Bonding Requirements: The rule increases the minimum lease bond amount to $150,000 and the minimum statewide bond to $500,000, and it eliminates nationwide and unit bonds. The previous lease bond amount of $10,000 (established in 1960) no longer provided an adequate incentive for companies to meet their reclamation obligations, nor does it cover the potential costs to reclaim a well should this obligation not be met, leaving taxpayers at risk for the cost of cleanup. Bond amounts will be adjusted for inflation every ten years.  
  • Protecting Wildlife and Cultural Resources: The rule helps steer oil and gas development away from important wildlife habitat and important cultural sites by establishing BLM's preference to offer lands for lease that are close to existing infrastructure or have high potential for oil and gas production.  
  • Fiscal Responsibility:  A number of fiscal terms are changed to reflect provisions of the Inflation Reduction Act, including: 
    • Royalty rates for leases are set at 16.67 percent until August 16, 2032—ten years after enactment of the Inflation Reduction Act—then 16.67 percent will become the minimum royalty rate. Previously, the minimum royalty rate was 12.5 percent. 
    • Minimum bids: The minimum amount companies can bid at auctions for federal oil and gas leases increases to $10 per acre, up from $2 per acre. After August 16, 2032, that amount will be regularly adjusted for inflation. 
    • Base, or minimum, rental rate: Leases will include a rental of $3 per acre per year during the first two-year period beginning upon lease issuance, then $5 per acre per year for the subsequent 6 years, and then $15 per acre per year thereafter. After August 16, 2032, those rental rates will become minimums and are subject to increase. Previously, companies paid $1.50/acre for each of the first five years of holding a lease, then $2/acre for the next five years. 
    • Expressions of Interest: The Inflation Reduction Act established a new $5/acre fee for expressions of interest. The rule implements how the fee will be collected. 

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