Public land sales didn’t make the ‘big beautiful bill’ but these land-use laws did

While the proposed sale of public lands in the One Big Beautiful Bill Act drew a huge backlash that ultimately scuttled the plan, provisions for oil and gas leasing on federal lands mostly flew under the radar and were signed into law.

Among those measures are some expanding the scope of land available for drilling nominations, others determining how often and how quickly the nominated land must be made available for lease and several that reduce costs for energy companies to operate — done with both tax incentives and a reduction of royalties.

“This combination of de facto subsidies and incentives is intended to drive more interest to federal lands and get more companies picking up these leases,” said Justin Meuse, government relations director at The Wilderness Society, a conservation advocacy group. “And I think they hope that the drilling will follow suit.”

The “One Big Beautiful Bill” is a massive piece of legislation, enacting hundreds of specific laws across a large swath of American life. While a lot of attention was focused on the tax deductions for the wealthy and reduction of Medicaid benefits, there were many parts that did not garner the same attention.

Some conservation groups suggested that if it weren’t for the failed effort by Congress to include public land sales in the bill, the oil and gas provisions affecting up to 200 million acres of public lands would have received a similar response.

“Of the reforms in HR1, much of the oxygen was focused on — and rightly so — the public land sale issue that we were engaged in,” said Jason Keith, managing director of Public Land Solutions, a Moab-based advocacy group focused on supporting the economics of outdoor recreation.

“That big shiny object made it so people weren’t focused as much on some of these other issues. And one of the other issues is that the oil and gas provisions really would take a step back from where we were in terms of smart land-use planning.”

We’re trying to paint a picture here and say that your favorite parcel of public land could be on the chopping block if the industry simply points to it, pays nothing and says they want it.

—  Justin Meuse, government relations director at The Wilderness Society

Meanwhile, the energy industry does not see those provisions as a change at all, but rather a “return to regular order.”

“The Biden administration was breaking the law and not following the Mineral Leasing Act by not holding regular quarterly lease sales in the states where there’s interest,” said Aaron Johnson, vice president of public and legislative Affairs at Western Energy Alliance, a trade organization representing oil and gas companies in nine western states.

“They’re required by law to do that. And now the Trump administration is coming in and returning to regular order, following the law and returning to holding regularly scheduled lease sales.”

Members of the House and Senate natural resources committees see it as not only a win for communities in the West, but as a step in the direction of energy independence and dominance. They say that the new laws will provide economic benefits for the federal and state governments for years to come.

“Sen. Lee’s work as chairman of the Senate Energy and Natural Resources Committee produced the most consequential pro-American energy legislation in decades,” a spokesman for Sen. Mike Lee, R-Utah, wrote to the Deseret News.

“His language expanded oil and gas leasing because American production lowers costs for families, strengthens energy security, and is done safer, cleaner, and more responsibly here at home than anywhere else in the world.”

What are the land-use new laws?

It’s now mandatory that oil and gas leases on public lands in nine states — Utah, Wyoming, Nevada, Montana, Colorado, Alaska, Oklahoma, New Mexico, and North Dakota — and are sold at least four times a year.

The previous administration had temporarily paused all oil and gas leases in 2021, until the measure was blocked by a federal judge the following year.

Of the lands that oil and gas companies nominate in those states, at least 50% needs to be made available for lease within three months. The remainder must be made available within the following 18 months.

“Previously, it could take much longer for a nomination to go from industry pointing at a parcel of land and saying, ‘I want to lease this’ to a lease sale,” Meuse said. “But now there’s a very defined, specific time frame that BLM (Bureau of Land Management) has to follow.”

Congress added those timelines to prevent nominated lands from being shelved by land managers and actually offered to energy companies, thus ensuring leasing and the subsequent production are able to move forward without the considerable regulatory roadblocks that often hamper development.

There’s no way for the stakeholder community to meaningfully engage in a nomination that industry has done on its own — and that includes local electeds. That’s not just butterfly catchers, you know, or rock climbers. That’s the part that I think might shock people as this whole thing gets rolled out.

—  Jason Keith, managing director of Public Land Solutions

Among those regulatory roadblocks is the environmental review process mandated by the National Environmental Policy Act or NEPA. However, now oil and gas companies can pay a fee — 125% of the total costs of doing the review — and expedite the entire process. The fee would guarantee only a one-year timeline, as opposed to the several years common for many environmental reviews.

The bill also restricts deferments of nominated lands if there are conflicting uses — such as hunting, fishing or recreation.

It’s important to note that any land nominated for an oil and gas lease is already under a resource management plan — a federally approved status that requires a NEPA environmental review — and is approved for that use. The new pace, however, limits opportunity for other approved uses to be considered.

“Now land use managers can’t account for other competing land uses like outdoor recreation, and they can’t compete because they’re mandated that oil and gas leases are executed,” Keith said. “It converts discretionary lease sales into a mandate, regardless of other resource conflicts.”

“There’s no way for the stakeholder community to meaningfully engage in a nomination that industry has done on its own — and that includes local electeds. That’s not just butterfly catchers, you know, or rock climbers,” Keith added. “That’s the part that I think might shock people as this whole thing gets rolled out.”

According to Lee’s spokesperson, however, the expansion will help to support those other uses of public land.

“Lease revenues also support federal programs that restore habitat and improve recreation access,” the spokesperson wrote. “This balance, with Utah’s share meeting local needs and federal funds supporting conservation, is why oil and gas leasing has been a central part of multiple-use management for decades.”

How much public land is available for oil and gas leases?

The House Natural Resources Committee was looking to add clarity in drafting the language for what lands could be considered for nomination, as it was previously not well defined.

The resulting law stipulates that lands “open” for oil and gas leases are considered “available” for nomination.

As Meuse and his team understand it, the new language in the bill changes the amount of land considered from those that were allocated in its resource management plan for oil and gas leasing, to any lands that are not excluded from it.

“Essentially, all lands that aren’t off the table for oil and gas are essentially available for oil and gas leasing,” Meuse said.

The resulting totals of lands available for oil and gas leasing were mapped out by The Wilderness Society, the conservation group responsible for the maps that helped create the viral response to public land sales. It worked with Rocky Mountain Wild, a Colorado conservation group, to determine which lands fit the new law’s criteria and created a map on its website.

According to the society’s review, over 200 million acres of public lands are eligible for fast-tracked lease sales.

Some of the territory abuts national parks, schools, places of worship and cemeteries. Some of the land that is available also happens to be within state parks in Utah such as Goblin Valley State Park, Sand Flats Recreation Area and Wasatch Mountain State Park.

In Utah, there are some 22 million acres of land that can be nominated. More than a million of those acres are privately owned, where the federal government retains the below-ground mineral rights.

But not everyone in the energy sector believes the new laws translate to a run on companies gobbling up public land leases.

“The fact that it’s worded as ‘this is a mandated lease sale,’ doesn’t necessarily mean that people are going to be flocking to federal lands to develop things,” said Alex Stevens, policy and communications manager for the Institute of Energy Research. “You will get instances where the industry will, through their expression of interest, nominate lands and they still don’t end up bidding on it.”

Will the new laws generate revenue?

With so many incentives, the new bill hopes to make public lands more attractive to energy companies.

“In general, the industry prefers to develop on private lands for a lot of reasons,” Stevens said. “The environmental review process is less intensive, you don’t have to pay the royalty rates, and you end up contracting with the people that live close by where you’re developing. That generally fosters better relationships.”

The thinking goes that, by making it much easier for energy companies, there will be an increase in lease sales, more drilling and more royalties, all of which will drive revenue to both state and federal government.

Under the law, revenues from federal leases return nearly half of every royalty dollar directly to the state of Utah, supporting schools, infrastructure, and rural services. Over the next decade, that will mean hundreds of millions of dollars flowing to Utah families and communities.

—  A spokesperson for chairman of the Senate natural resource committee, Republican Sen. Mike Lee

“Under the law, revenues from federal leases return nearly half of every royalty dollar directly to the state of Utah, supporting schools, infrastructure, and rural services,” Lee’s spokesperson wrote.

“Over the next decade, that will mean hundreds of millions of dollars flowing to Utah families and communities.”

But the bill also reduces royalty rate ranges from a low of 16.7% to a low of 12.5%, which they were prior to the Inflation Reduction Act. From those leases, royalty rates are the largest revenue drivers for the federal government and the reduction is not small.

Resources for the Future, the environmental think tank, calculates that the royalty reduction will cost the government $2.3 billion over 10 years.

Another part of the bill reinstates tax deductions for intangible drilling costs like security and staff transportation, which can account for as much as 60% to 80% of total cost, according to the energy research institute.

But the conservationists aren’t convinced that those new stipulations will generate the kind of revenue that the reconciliation bill was hoping to offset with its tax cuts.

“Not with the oil and gas provisions, to be completely honest. There are some silver linings in the renewable energy space — believe it or not — but with respect to the oil and gas piece, it’s just making public lands cheaper, it’s cutting the royalty rate by 25%," Meuse said.

“Reducing the royalty rate by that amount, they’re not going to generate more money as a result of that de facto subsidy than they would have by leaving it in place.”

Are oil and gas leases on public lands productive?

Of the current oil and gas leases on Utah’s public land, 39% of them are producing. Of the total acres under lease, 53% are not producing.

Since 2017, 1,308 applications for drilling in Utah were approved — 60% of those were green-lit under the Biden administration. Of those, 536 were actually drilled. Less than half of the already approved drilling permits were developed and have begun producing oil and gas.

Stevens suggested that, regardless of what leases are out there already, continuing to make land available can create security during times of upheaval or disruption. Especially during moments of uncertainty as a result of geopolitics — such as circumstances where oil and gas markets are tied to Russia or broader tariffs — the more energy options, the better.

“Some activists argue leasing is unnecessary because many current leases are not producing. That is a false choice,” Lee’s spokesperson wrote. “A lease is a right to explore, not a guarantee of drilling. Consistent lease sales are needed for companies to conduct seismic work, secure permits, and build infrastructure before production can begin. Without that consistency, exploration stops and energy independence suffers.”

There are many other elements to the “one big beautiful bill” regarding public lands. More leasing has been opened up in Alaska, more offshore drilling permit sales have been mandated, lease expiration windows were expanded and costs for nominations have been slashed.

It is a lot to take in and process, but the Senate Natural Resources Committee is pleased with the results.

“Thanks to Sen. Lee’s leadership, Utah will continue to benefit from responsible development that strengthens communities, funds conservation, and keeps public lands open to all forms of multiple use,” according to the senator’s spokesperson.

Something Johnson from the Western Energy Alliance also stressed.

“The one big beautiful bill helps the Department of Interior return to regular order when it comes to federal oil and natural gas leasing, and this is a benefit for Utah,” he said. “Last year oil and natural gas production on multiple use public lands in Utah generated $6.5 billion in revenue — about half of that goes back to the state. That’s a large, large economic benefit to the residents of Utah."

But some conservationists believe those changes — or returns to a previous governing model — prove that there is a hierarchy to “multiple use.”

“We’re trying to paint a picture here and say that your favorite parcel of public land could be on the chopping block,” Meuse said, “if the industry simply points to it, pays nothing and says they want it.”