Rule2026-08280
Revisions to Regulations Regarding Oil and Gas Leasing; Fees, Rentals, and Royalties
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 29, 2026
Effective
June 29, 2026
Issuing agencies
Interior DepartmentLand Management Bureau
Abstract
This direct final rule (DFR) revises existing regulations pertaining to royalty on production to effectuate changes required by the One Big Beautiful Bill Act (OBBB) enacted on July 4, 2025.
Full Text
<html>
<head>
<title>Federal Register, Volume 91 Issue 82 (Wednesday, April 29, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 82 (Wednesday, April 29, 2026)]
[Rules and Regulations]
[Pages 23017-23020]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-08280]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE INTERIOR
Bureau of Land Management
43 CFR Part 3100
[Docket No. BLM-2025-0138; A2407-014-004-065516, #O2509-014-004-125222]
RIN 1004-AF41
Revisions to Regulations Regarding Oil and Gas Leasing; Fees,
Rentals, and Royalties
AGENCY: Bureau of Land Management, Interior.
[[Page 23018]]
ACTION: Direct final rule; request for comments.
-----------------------------------------------------------------------
SUMMARY: This direct final rule (DFR) revises existing regulations
pertaining to royalty on production to effectuate changes required by
the One Big Beautiful Bill Act (OBBB) enacted on July 4, 2025.
DATES: The final rule is effective on June 29, 2026, unless significant
adverse comments are received by May 29, 2026. If significant adverse
comments are received, notice will be published in the Federal Register
before the effective date either withdrawing the rule or issuing a new
final rule that responds to any significant adverse comments.
ADDRESSES: You may submit comments by one of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
In the Search box, enter the Docket Number ``BLM-2025-0138'' and click
the ``Search'' button. Follow the instructions at this website.
<bullet> Mail, personal, or messenger delivery: U.S. Department of
the Interior, Director (630), Bureau of Land Management, 1849 C St. NW,
Room 5646, Washington, DC 20240, Attention: 1004-AF41.
FOR FURTHER INFORMATION CONTACT: Peter Cowan, Senior Minerals Leasing
Specialist, email: <a href="/cdn-cgi/l/email-protection#06766f656971676846646a6b28616970"><span class="__cf_email__" data-cfemail="b4c4ddd7dbc3d5daf4d6d8d99ad3dbc2">[email protected]</span></a>; telephone: 720-838-1641.
Individuals in the United States who are deaf, deafblind, hard of
hearing, or have a speech disability may dial 711 (TTY, TDD, or
TeleBraille) to access telecommunications relay services. Individuals
outside the United States should use the relay services offered within
their country to make international calls to the point-of-contact in
the United States.
For a summary of the final rule, please see the abstract
description of the document in Docket Number BLM-2025-0138 on
<a href="http://www.regulations.gov">www.regulations.gov</a>.
SUPPLEMENTARY INFORMATION: Oil and gas leasing on Federal lands managed
by the BLM is governed by the Mineral Leasing Act of 1920 (MLA), 30
U.S.C. 181 et seq., and other pertinent statutes. See 43 CFR 3100.3.
Section 226 of the MLA sets out the general provisions governing oil
and gas leasing on Federal lands. Before 2022, section 226(b)(1)(A)
prescribed the royalty rate for oil and gas leases to be set at a
``rate of not less than 12.5 percent.'' In 2022, Congress passed the
Inflation Reduction Act (IRA), Public Law 117-169 (136 Stat. 2056).
Section 50262(a) of the IRA amended section 226(b)(1)(A) to require the
royalty rate to be changed to 16\2/3\ percent. In 2024, the BLM issued
the final rule, ``Fluid Mineral Leases and Leasing Process'' (89 FR
30916, June 22, 2024), which implemented the provisions of the IRA.
Some of those changes are contained in 43 CFR subpart 3103--Fees, Rents
and Royalties. That subpart sets out the general fees, rents and
royalty amounts and requirements for oil and gas leases. The
regulations in 43 CFR 3103.31 specify the royalty rates applicable to
both newly issued oil and gas leases, as well as those that may be
reinstated under applicable law and regulations.
Section 50101(a)(1) of the OBBB repealed section 50262(a) of the
IRA, stating that any provision of law amended or repealed by that
subsection is restored or revived as if that subsection had not been
enacted into law. Based on the language in the OBBB, the applicable
royalty provision in the MLA is once again set at an amount of not less
than 12.5 percent. The BLM is issuing this DFR to return the royalty
rate required for production from Federal oil and gas leases issued
after the enactment of the OBBB to ``not less than 12.5 percent'' or
``minimum of 12.5 percent.'' Issuance of this DFR will avoid any
confusion on the part of the regulated community as to the royalty rate
for production from Federal oil and gas leases.
The BLM has determined that 43 CFR 3103.31(a) must be revised to
reflect the correct royalty rate applicable to production from Federal
oil and gas leases issued after the enactment of the OBBB such that
this section will now include a statement that the royalty is not less
than 12.5 percent. The regulations at 43 CFR 3103.31(a)(2) and (3) are
removed in their entirety as these paragraphs included royalty rates
that are no longer applicable. The regulations at 43 CFR 3103.31(a)(4)
will be redesignated to Sec. 3103.31(a)(2) and all references to 16.67
percent will be removed and replaced with 12.5 percent to reflect the
royalty rate required by the OBBB. A new 43 CFR 3103.31(a)(3) is added
to address the royalty rate for non-competitive leases, which were
reinstituted by the OBBB with this royalty rate. The existing 43 CFR
3103.31(a)(5) will be redesignated to become paragraph (a)(4) and will
be revised to conform to the requirements of the OBBB to address the
royalty rate for reinstated leases.
The BLM has determined that enactment of the OBBB, independently
and alone, justifies the revisions to 43 CFR 3103.31(a)(1) through (5).
The BLM has no interest in maintaining a regulation that is
inconsistent with more recent controlling legislation and that could
lead to confusion if left in place.
This regulatory change does not amend existing oil and gas leases
with royalty rates that are higher than 12.5 percent. The BLM is taking
action outside of this rulemaking to implement this royalty rate change
for new leases going forward.
The BLM is issuing this rule as a DFR. Although the Administrative
Procedure Act (APA, 5 U.S.C. 551 through 559) generally requires
agencies to engage in notice and comment rulemaking, section 553 of the
APA provides an exception when the agency ``for good cause finds'' that
notice and comment are ``impracticable, unnecessary, or contrary to the
public interest.'' Id. 553(b)(B). The BLM has determined that notice
and comment are unnecessary because the revisions reflected in this
rule implement requirements for which the agency has no discretion; and
is unlikely to receive any significant adverse comments given the
statutory mandate in the OBBB. Significant adverse comments are those
that oppose the revision of the rule and raise, alone or in
combination, (1) Reasons why the revision of the rule is inappropriate,
including challenges to the revision's underlying premise; or (2)
Serious unintended consequences of the revision. A comment recommending
an addition to the rule will not be considered significant and adverse
unless the comment explains how this DFR would be ineffective without
the addition.
Procedural Matters
Executive Order (E.O.) 12630--Governmental Actions and Interference
With Constitutionally Protected Property Rights
This rule does not result in a taking of private property or
otherwise have regulatory takings implications under E.O. 12630. The
rule revises provisions that no longer reflect existing statutory
authority and removes and replaces obsolete regulatory provisions, as
required by the OBBB. The rule will not result in private property
being taken for public use without just compensation. A takings
implication assessment is not required.
E.O. 12866--Regulatory Planning and Review and E.O. 13563--Improving
Regulation and Regulatory Review
E.O. 12866 provides that the Office of Information and Regulatory
Affairs (OIRA) in the Office of Management and Budget (OMB) will review
all significant rules. OIRA has determined that this rule is
significant.
The incremental or decremental change in royalties are changes in
[[Page 23019]]
revenue to the U.S. Government, State governments, and funds, and they
are costs or cost savings to operators of new onshore Federal oil and
gas leases. As such, they are transfer payments that do not affect the
total resources available to society. An important, but sometimes
difficult, problem in cost estimation is to distinguish between real
costs and transfer payments. While transfers should not be included in
the estimates of the benefits and costs of a regulation, they may be
important for describing the distributional effects of a regulation.
Overall, economic theory suggests that the quantity of Federal oil
or gas produced may increase due to the new OBBB provisions compared to
the IRA provisions, which increased production costs.
E.O. 13563 reaffirms the principles of E.O. 12866, while calling
for improvements in the Nation's regulatory system to promote
predictability, reduce uncertainty, and use the best, most innovative,
and least burdensome tools for achieving regulatory ends. E.O. 13563
directs agencies to consider regulatory approaches that reduce burdens
and maintain flexibility and freedom of choice for the public where
these approaches are relevant, feasible, and consistent with regulatory
objectives. E.O. 13563 emphasizes further that agencies must base
regulations on the best available science and that the rulemaking
process must allow for public participation and an open exchange of
ideas. The Department developed this rule in a manner consistent with
these requirements.
E.O. 12988--Civil Justice Reform
This DFR complies with the requirements of E.O. 12988. Among other
things, this rule:
(a) Meets the criteria of section 3(a) requiring that all
regulations be reviewed to eliminate errors and ambiguity and be
written to minimize litigation;
(b) Meets the criteria of section 3(b)(2) requiring that all
regulations be written in clear language and contain clear legal
standards.
E.O. 13132--Federalism
Under the criteria of section 1 of E.O. 13132, this rule does not
have sufficient federalism implications to warrant the preparation of a
federalism summary impact statement. This rule will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government. A
federalism summary impact statement is not required.
E.O. 13175--Consultation and Coordination With Indian Tribal
Governments
The Department of the Interior strives to strengthen its
government-to-government relationship with Indian tribes through a
commitment to consultation with Tribes and recognition of their right
to self-governance and Tribal sovereignty. The Department evaluated
this DFR under E.O. 13175 and the Department's consultation policies
and determined that it has no substantial direct effects on Federally
recognized Indian tribes and that consultation under the Department's
Tribal consultation policies is not required. The rule merely revises
the Federal regulations to remove obsolete regulatory language.
E.O. 13211--Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use
This DFR is not a significant energy action as defined in E.O.
13211. Therefore, a Statement of Energy Effects is not required.
National Environmental Policy Act (NEPA)
This DFR does not constitute a major Federal action significantly
affecting the quality of the human environment. A detailed statement
under NEPA (42 U.S.C. 4321 et seq.) is not required because this rule
is covered by a categorical exclusion applicable to regulatory
functions ``that are of an administrative, financial, legal, technical,
or procedural nature.'' 43 CFR 46.210(i). In addition, the BLM has
determined that this rule does not involve any of the extraordinary
circumstances listed in 43 CFR 46.215 that would require further
analysis under NEPA.
Paperwork Reduction Act
This rule does not impose any new information collection burden
under the Paperwork Reduction Act. OMB previously approved the
information collection activities contained in the existing regulations
and assigned OMB control number 1004-0185. This rule does not impose an
information collection burden because the Department is not making any
changes to the information collection requirements.
Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA, 5 U.S.C. 601-612) requires an
agency to prepare a regulatory flexibility analysis for all rules
unless the agency certifies that the rule will not have a significant
economic impact on a substantial number of small entities. The RFA
applies only to rules for which an agency is required to first publish
a proposed rule. See 5 U.S.C. 603(a) and 604(a). As the BLM is not
required to publish a notice of proposed rulemaking for this DFR, the
RFA does not apply.
Congressional Review Act
This rule is not a major rule under the Congressional Review Act, 5
U.S.C. 804(2). Specifically, the DFR: (a) Will not have an annual
effect on the economy of $100 million or more; (b) Will not cause a
major increase in costs or prices for consumers, individual industries,
Federal, State, or local government agencies, or geographic regions;
and (c) Will not have significant adverse effects on competition,
employment, investment, productivity, innovation, or on the ability of
United States-based enterprises to compete with foreign-based
enterprises in domestic and export markets.
Unfunded Mandates Reform Act
This rule does not impose an unfunded mandate on State, local, or
Tribal governments, or the private sector, of more than $100 million
per year. The rule does not have a significant or unique effect on
State, local, or Tribal governments, or the private sector. The rule
merely revises the Federal regulations to remove an obsolete provision
in compliance with the OBBB. Therefore, a statement containing the
information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531
et seq.) is not required.
List of Subjects in 43 CFR Part 3100
Government contracts, Government employees, Mineral royalties, Oil
and gas exploration, Oil and gas reserves, Public lands--mineral
resources, Reporting and recordkeeping requirements, Surety bonds.
Lanny E. Erdos,
Director, Office of Surface Mining, Reclamation, and Enforcement,
Exercising Authority of the Assistant Secretary, Land and Minerals
Management.
For the reasons stated in the preamble, the Bureau of Land
Management amends 43 CFR part 3100 as follows:
PART 3100--OIL AND GAS LEASING
0
1. The authority citation for part 3100 continues to read as follows:
Authority: 25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359,
and 1751; 43 U.S.C. 1701 et seq.; and 42 U.S.C. 15801.
[[Page 23020]]
0
2. Amend Sec. 3103.31 by revising paragraph (a) to read as follows:
Sec. 3100.31 Enforceability.
(a) Royalty on production will be payable only on the mineral
interest owned by the United States. Royalty must be paid in the amount
or value of the production removed or sold as follows:
(1) The royalty rate prescribed in the lease will be not less than
12.5 percent.
(2) A minimum royalty rate of 12.5 percent on all leases issued
under subpart 3109 of this part;
(3) For all non-competitive leases, a royalty rate of 12.5 percent.
(4) For reinstated leases, the rate used for royalty determination
that applies to new leases at the time of the reinstatement plus 4
percentage points, plus an additional 2 percentage points for each
succeeding reinstatement. In no cases will the royalty rate on the
reinstated lease be less than 16.67 percent.
* * * * *
[FR Doc. 2026-08280 Filed 4-28-26; 8:45 am]
BILLING CODE 4331-29-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on April 29, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.