The Mineral Leasing Act of 1920 also requires the federal government to hold quarterly lease sales for oil and gas on public lands. See 30 U.S.C ยง 226(B)(1)(a), โLease sales shall be held for each State where eligible lands are available at least quarterly and more frequently if the Secretary of the Interior determines such sales are necessary.โThe full extent of litigation challenging the Biden administrationโs imminent rules and regulations aimed at the oil and gas industry is also unclear.
For instance, under the Mineral Leasing Act, the Secretary is authorized to issue leases for oil and gas, approve assignments and unit or communitization agreements, and issue APDs. 30 USC ยงยง 226(a), (g), (m), (p). Furthermore, under the Reorganization Plan No. 3 of 1950, Section 1, all functions of all other officers of the Department of Interior and all functions of all agencies and employees of the Department are transferred to the Secretary.
League of Conservation Voters v. Trump, 363 F. Supp. 3d 1013 (D. Alaska 2019). The Order provides a few exceptions, such as where conditions exist that could pose human health or safety risks or adverse impacts to public lands or mineral resources.See, e.g., 30 U.S.C. ยง 201(a)(1) (discretion to offer leases for lands containing coal); 30 U.S.C. ยง 226(g) (discretion to set standards related to financial arrangements, ensuring reclamation of lease tracts, and restoration of any lands or surface waters adversely affected by lease operations); 43 U.S.C. ยง 1344(a)(2)(G) (allowing DOI to base the โtiming and locationโ of oil and gas offshore activities on โthe relative environmental sensitivity and marine productivityโ of the outer continental shelf).
Conversely, all loss of gas not specifically found unavoidable is considered โavoidableโ and, therefore, subject to royalties.Royalty provisions for new competitive leases With regard to the royalty rates applicable to onshore oil and gas leases, the proposed rule purports to do three things: (1) make clear that the royalty rate on all existing leases would remain at the same rate prescribed in the lease or regulations applicable at the time of lease issuance; (2) specify the fixed statutory rate of 12.5 percent, located at 30 U.S.C. ยง 226(c)(1), for all non-competitive leases issued after the ruleโs effective date; and (3) for competitive leases issued after the effective date of the rule, align the rule text with the corresponding MLA text, which would allow the BLM to set royalty rates at or above 12.5 percent.
At the final stage before drilling may proceed, BLM reviews an Application for a Permit to Drill (APD) a well, which it must approve before any โdrilling operationsโ or โsurface disturbance preliminary thereto.โ 30 U.S.C. ยง226(g); 43 C.F.R. ยง3162.3-1(c). BLM may condition its approval of an APD on additional reasonable terms and conditions that ensure consistency with the RMP.