Congresswoman Boebert's Restoring American Energy Dominance Act Passes House

The Restoring American Energy Dominance Act, legislation introduced by Congresswoman Boebert in October to block the Biden Administration's proposed Fluid Mineral Leases and Leasing Process rule, has passed the House as part of the Interior Appropriations bill.

Congresswoman Lauren Boebert (CO-03) said, “The American people have had enough of Joe Biden's relentless attack on American energy production. Gas prices continue to soar, and inflation is undermining our way of life. We should never consider reducing our own energy production and relying on other nations for our oil and gas needs. The United States is a leader in producing high-quality oil and gas globally, and it's time we utilize our natural resources to lower gas prices. Achieving this goal begins with passing my Restoring American Energy Dominance Act in the Senate and signing it into law.”

Background:

The Restoring American Energy Dominance Act successfully passed the House as a provision in the Fiscal Year 2024 Interior, Environment, and Related Agencies Appropriations Bill. Congresswoman Boebert’s bill blocks the Bureau of Land Management's (BLM'S) proposed Fluid Mineral Leases and Leasing Process rule. This rule effectively cements portions of the Inflation Reduction Act into law by imposing extra costs and regulations on domestic energy producers.

On July 24, 2023, the BLM issued a proposed rule entitled Fluid Mineral Leases and Leasing Process. The proposed mandate would formally implement provisions from the partisan Inflation Reduction Act (IRA), which increased the royalty rate for production on federal lands while also increasing and creating new fees for producers.

While the proposed rule codifies pieces of the IRA, it also makes major, non-statutory changes to the BLM’s onshore leasing program. The proposed mandate greatly increases bonding levels for production on federal lands (even though there are only 37 orphaned wells on federal lands). Increased bonding fee requirements disproportionately impacts smaller producers who can’t afford to operate in the surety market. These additional fees will ultimately harm returns and reduce revenues to state and local governments by disincentivizing development on federal lands.

Additionally, the proposed rule introduces “preference criteria” in federal leasing which could be devastating for future production on public lands. This is problematic if BLM field offices avoid leasing in all areas with endangered or threatened species, critical habitats, or nearby recreation areas. The proposed mandate could greatly limit leasing on federal lands under that criteria, in contradiction to the multiple-use mandate established in the Federal Land Policy and Management Act.

The proposed regulation proposes to create new fees and increase existing fees while limiting the use of lease suspensions and drilling permit extensions. This is especially egregious given the Administration’s poor track record with respect to lease sales and drilling permit approvals.

This proposed rule increases energy production costs while further disincentivizing operators from producing domestically. These new costs will ultimately be passed along to consumers, driving up energy costs for American families and further shifting production to countries like Russia, Saudi Arabia, China, and Venezuela.

Additional Background Courtesy of House Committee on Natural Resources Subcommittee on Energy and Mineral Resources:

Specifically, the rule proposes ending nationwide bonding and increasing the minimum bond amounts for individual lease bonds and statewide lease bonds from $10,000 to $150,000 and from $25,000 to $500,000 respectively. This significant increase will tie up capital that would otherwise be put back into production and is unjustifiable as there are only 37 orphaned oil and gas wells on BLM-managed lands. Additionally, the BLM has only utilized bonds to plug wells on federal lands 40 times over the last decade.

Last month, Republican Members of the Committee on Natural Resources sent a letter to the BLM requesting an extension in the comment period given the significant policy shifts included in the regulation. On September 27th, the BLM responded to that letter stating that they do not plan on extending the comment period and instead plan to rush the regulation towards completion. This bill would force the BLM to withdraw the rule and would prevent the BLM from finalizing a substantially similar rule.

The Restoring American Energy Dominance Act was one of eight amendments and twenty-six legislative priorities of the Congresswoman to pass the House. Read more about them here.

The full text of the Restoring American Energy Dominance Act is available here.