BLM Finalizes Fluid Mineral Leases And Leasing Process Rule

The BLM finalized the Fluid Mineral Leases and Leasing Process rule which significantly increases royalties, rates, minimum bids and costs for oil and gas producers on federal lands.

In particular, it significantly increases bonding for producers which will have a major negative impact on small producers. Many of the provisions in the new rule are the result of the Democrats Inflation Reduction Act, however the bonding portion in particular was successfully removed by republicans through the Byrd rule.

The BLM, despite clear rejection from Congress, chose to increase bonds by massive amounts. The new rule increases the minimum lease bond amount to $150,000 per well (previously $10,000) and the minimum statewide bond to $500,000 (previously $25,000) and it eliminates nationwide (previously $150,000).

“We find it concerning that the BLM has continued to push forward the increase in bond amounts despite recent rejections by Congress,” said Gordon Oelkers, vice president of the Montana Association of Oil, Gas and Coal Counties. “The continued development of our oil and gas resources is critical to maintaining our energy security and it plays a key role in funding essential local government services — which is why we appreciate the efforts of Senator Daines to roll back the minimum lease bond increases for oil and gas producers on federal lands.”

Daines will be introducing the CRA to overturn this rule. Montana Association Of Oil, Gas, and Coal Counties and Montana Association of Counties are supporters in overturning this rule.