Heinrich Welcomes Final BLM Rule on Oil and Gas Leasing Reform

WASHINGTON – U.S. Senator Martin Heinrich (D-N.M.) welcomed today’s announcement that the U.S. Department of the Interior has finalized its rule to revise the Bureau of Land Management’s (BLM) oil and gas leasing regulations to ensure a balanced approach to development, provide a fair return to taxpayers, and help keep drilling activities from conflicting with the protection of important wildlife habitat or cultural sites.

“We are finally providing American taxpayers with a fair return for the development of oil and gas on our public lands,” said Heinrich. “This rule strikes the right balance by protecting important wildlife habitat and cultural resources on our public lands from harmful drilling operations and holding oil and gas companies accountable for paying their fair share and cleaning up after themselves.”

In October, Heinrich wrote to BLM to support updated oil and gas bonding requirements in BLM’s Onshore Oil and Gas Leasing Rule, and to call on Biden administration leaders to swiftly review public input and finalize this rule. Earlier this month, Heinrich joined 21 lawmakers in a letter urging President Biden to finalize the rule before the end of April.

The final BLM rule modernizes bonding rates to ensure that oil and gas companies – rather than taxpayers – pay the costs of cleaning up oil and gas wells. It also implements key reforms included in the Inflation Reduction Act such as increasing royalty rates and prohibiting non-competitive leasing. The rule also focuses leasing decisions away from lands with little potential for oil and gas production, and away from lands with wildlife habitat, cultural resources, and other sensitive places. It also limits access to leases for operators with a history of noncompliance and abuse.

Before this rule, oil and gas bonding rates – intended to ensure industry operations are cleaned up after production ends — had not been updated since they were set more than sixty years ago, even to account for inflation. As a result, bonding rates have been wholly insufficient to cover the true costs of cleaning up drilling sites, leaving taxpayers on the hook to foot the bill. 

The new rule aligns with the Oil and Gas Bonding Reform and Orphaned Well Remediation Act, legislation that Heinrich cosponsored to create jobs through expanding orphaned well cleanup, modernize federal oil and gas bonding requirements to reflect the true cost of reclamation, establish standards for inactivity and cleanup, and improve accountability. 

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