By Theresa Sauer, Malinda Morain, and Kyrie Buffa
On June 22, 2026, the U.S. Department of the Interior announced two parallel and highly anticipated rulemakings impacting oil and gas development on federal lands.
First, the proposed “Oil and Gas Leasing” rule would revise federal onshore oil and gas leasing regulations and partially reverse or modify key provisions of the 2024 “Fluid Mineral Leases and Leasing Process” rule applicable to federal onshore oil and gas leases.
Second, the proposed “Royalty for Oil and Gas Lost from Onshore Federal and Indian Leases” rule would revise the 2024 “Waste Prevention” rule governing venting, flaring, and royalty standards for federal and Indian onshore oil and gas leases.
Both rulemakings implement recent statutory changes, including the One Big Beautiful Bill Act of 2025 (OBBB, also known as the Working Families Tax Cuts Act) and the Royalty Resiliency Act of 2024 (RRA).
What This Means for Operators
Collectively, the proposed rules are expected to lower bonding requirements, streamline leasing procedures, improve regulatory certainty, and significantly reduce both compliance costs for operators on federal lands and barriers to investment. Key takeaways are summarized below. Stay tuned for more substantive updates to follow upon formal publication.
Trump 2.0 Oil and Gas Leasing Proposed Rule
BLM’s “Oil and Gas Leasing” proposed rulefocuses on the leasing process, bonding, participation timelines, fees, and development barriers. If adopted as proposed, the new rules will implement numerous changes to BLM’s federal onshore oil and gas leasing program, including:
- Leasing System Changes: Reintroduces noncompetitive leasing; eliminates leasing preference criteria and Expression of Interest (EOI) preference review; and requires replacement lease sales if ≥25% of acreage offered does not receive bids.
- Financial Assurance Changes: Reduces bonding requirements by restoring pre-2024 minimum bond amounts, including reducing the individual lease bond floor from $150,000 to $10,000, and the statewide bond floor from $500,000 to $25,000; and seeks public input on potentially reinstating nationwide bonds eliminated under the 2024 regulations.
- Process and Participation Changes: Removes mandated periods for scoping and comment implemented in the 2024 rule, conforming public participation to align with statutory text and reduce duplication.
- Fees and Fiscal Changes: Reduces lease application fees; introduces protest-related fees; and updates royalty structures aligned with statutory changes under the OBBB and RRA.
- Environmental and Operational Controls: Implements the OBBB requirement limiting lease stipulations to those included in applicable Resource Management Plans (RMPs), while maintaining BLM authority to impose site-specific operational controls through Conditions of Approval (COAs) at the Application for Permit to Drill (APD) stage.
Trump 2.0 Waste Prevention Proposed Rule
BLM’s “Royalty for Oil and Gas Lost from Onshore Federal and Indian Leases” proposed rule seeks to implement statutory changes in the OBBB. If adopted as proposed, the rule would revise BLM’s waste prevention and royalty framework applicable to both federal and Indian onshore oil and gas leases, including:
- Elimination of Major Compliance Programs: Removes the Waste Minimization Plan (WMP) requirements for APDs, self-certification requirements, and Leak Detection and Repair (LDAR) programs, but operators remain subject to negligence and general operational standards.
- Expanded Definition of “Unavoidable Loss” (Royalty-Free): Broadens categories of gas considered royalty-free to include pipeline capacity constraints, equipment maintenance, emergencies, leaks (without LDAR), and low-quality (unmarketable) gas, reflecting a shift toward fewer case-by-case determinations and less restrictive flaring limits; and redefines avoidable and unavoidable losses.
- Removal of Flaring Limits and Constraints: Eliminates volume-based limits on royalty-free flaring; and treats more flaring as “unavoidable loss” (non-royalty bearing).
- Streamlined Emergency and Operational Requirements: Maintains 48-hour royalty-free emergency window; allows for extensions up to 15 days; streamlines reporting and procedural burdens; and eliminates certain Sundry Notice requirements.
- New VFMP System: Introduces a new venting and flaring measurement point (VFMP) system for tracking and reporting gas losses.
- Revised Measurement and Reporting Framework: Requires reporting of all vented, flared, or combusted gas (measured or estimated); and streamlines reporting obligations to ONRR.
- Measurement Requirements (Targeted Approach): Redefines loss and measurement standards by requiring measurement only above threshold volumes (approximately 1,050 Mcf/month), allowing estimation for lower volumes, and focusing compliance on the largest sources of gas loss.
- Removal of Certain Operational Requirements: Eliminates duplicative provisions related to equipment sizing, tank vapor controls, and venting/flaring-specific equipment mandates.
Beatty & Wozniak continues to evaluate the text and impact of the proposed rules; stay tuned for additional analysis. For more information on BLM’s new rulemaking and opportunities for commenting on these rules, contact B&W Shareholder Theresa Sauer.