HECHO Statement on Final Oil and Gas Rule

After years of advocating reform of the broken oil and gas program, Hispanics Enjoying Camping, Hunting, and the Outdoors (HECHO) celebrates the release of the long-anticipated and overdue oil and gas rulemaking, which modernizes the nation's leasing program to ensure the responsible management of natural resources, proper stewardship of our public lands, and a fair return to taxpayers. 

"For too long, critical public lands have been mismanaged and prioritized for the benefit of oil and gas corporations, and our communities have been left behind. The final oil and gas rule is a win for our public lands. These common-sense reforms updated fiscal terms of the onshore federal oil and gas leasing program - including bonding requirements, royalty rates, and minimum bids – which increase returns to the public and disincentivize speculators or less responsible actors," said Camilla Simon, HECHO executive director. 

Our public lands, waters, wildlife and communities have been harmed by more than 100 years of a woefully antiquated system, which allowed oil and gas companies to boost their profits, buy land on the cheap, pollute our public lands, waters, and air, and make Americans pay the bill for cleaning up their mess. The 2024 Conservation in the West Poll shows that 90% of Westerners support requiring oil and gas companies to pay for all of the clean-up and land restoration costs after drilling is finished.  

“Hispanics, specifically, are disproportionately affected by oil and gas pollution. This rule brings the leasing program into the 21st century and puts our families and public lands first,” said Max Trujillo, New Mexico Senior Coordinator of HECHO. “We are pleased to see that finally, our oil and gas leasing program reflects the needs of our communities that use this land to recreate, hunt, fish, and engage in longstanding family traditions.”  

The historic Inflation Reduction Act (IRA) included several critical reforms to our government’s onshore oil and gas program by increasing royalty rates and eliminating the wasteful practice of leasing lands noncompetitively for just $1.50/acre, but for these significant legislated reforms to be long-lasting and effectively applied, the Department of the Interior (DOI) needed to incorporate the IRA provisions into the Bureau of Land Management’s processes and implement concrete requirements and solid regulations.  

The new reforms include the following measures: 

·        Bonding requirements 

This rule increases bonding rates—which have not been raised in over 60 years despite inflation costs—to a reasonable level, ensuring that companies cover the clean-up costs for current and future oil and gas activity on public lands. It raises the minimum lease bond amount to $150,000 and the minimum statewide bond to $500,000 and eliminates nationwide and unit bonds. 

·        Royalty rates 

Royalty rates will now reflect provisions of the Inflation Reduction Act. Royalty rates for leases issued ten years after the effective date of the Inflation Reduction Act are 16.67 percent. After August 16, 2032, the rate of 16.67 percent will become the minimum royalty rate. 

·        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. 

·        Leasing Criteria 

The new rule applies leasing criteria that will reduce the practice of “speculative leasing,” requiring that lands– due to a lack of development potential or the presence of critical wildlife habitat – are excluded from future sales. 

The rule also eliminates noncompetitive leasing, which previously gave away our public lands for as little as 1.50 per acre. Stopping this practice ensures the BLM is not wasting time administering questionable and speculative leases for pennies on the dollar. 

HECHO strongly supports these robust measures that protect taxpayers, support wildlife, and ensure that our public lands and resources are better managed to benefit the people, not the oil and gas companies. 

Read more about the released final oil and gas reform rule here.