Senator Cramer Condemns Overbearing, Costly Rule on American Oil and Gas
BISMARCK – U.S. Senator Kevin Cramer (R-ND), member of the Senate Environment and Public Works (EPW) Committee, issued the following statement on the Bureau of Land Management’s (BLM) final onshore oil leasing rule, which will hike up the bonding requirements and fees for oil and gas companies, raise royalty rates, and tighten permitting regulations on federal lands.
“Inflation is soaring, and energy is at the heart of it. This rule is the direct result of the Biden administration’s partisan so-called Inflation Reduction Act, and ironically, it is doing anything but reducing the inflationary pain Americans are feeling. Democrats and their climate zealots rammed through policies they knew would add costly regulatory burdens on American energy producers, and now North Dakota’s operators and families are being saddled with the bill.”
Key elements of the rule include:
- Increases minimum bonding requirements to $150,000 and the minimum statewide bond to $500,000. The bond amounts will be adjusted for inflation every 10 years.
- Increases royalty rates for leases to 16.67 percent from the current 12.5 percent.
- Increases minimum bids for federal oil and gas leases to $10 per acre, up from $2 per acre. After August 16, 2032, that amount will be regularly adjusted for inflation.
- Increases rental rates to $3 per acre per year during the first two-year period beginning upon lease issuance, then $5 per acre per year for the subsequent six years, and then $15 per acre per year thereafter. After August 16, 2032, those rental rates will become minimums and are subject to further increases.
- Implements a new $5 per acre fee for expressions of interest.
- Establishes BLM preferences to offer lands for lease based on wildlife, cultural sites, and existing infrastructure.
During President Biden’s second week in office, he halted federal oil and gas leases. In March 2023, U.S. District Judge Daniel Traynor ordered the BLM to resume quarterly oil and gas lease sales in North Dakota.
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