Federal Rule Raises Cost for Oil and Gas Extraction on Public Lands

An update to federal regulations raises minimum bonding to limit orphaned wells and ensure cleanup costs are covered — but it still may not be enough to mitigate the damages caused by oil and gas drilling.

2 minute read

April 17, 2024, 10:00 AM PDT

By Diana Ionescu @aworkoffiction

Bird's eye view of oil field in New Mexico desert.

Oil fields in New Mexico. | Purplexsu / Adobe Stock

A new rule from the U.S. Department of Interior will make oil and gas drilling on public lands more expensive, reports Nick Bowlin in High Country News.

“The reform includes a jump in the amount of money that drilling companies must put forward to ensure cleanup of their wells. It also raises the royalty tax rate that operators pay on the minerals they extract on public land, which had not changed in more than a century,” Bowlin adds.

The rule is designed to reduce wasteful speculation and make companies responsible for the costs of environmental cleanup, according to Interior Secretary Deb Haaland. The rule raises minimum bonds for oil and gas leases on public lands from $10,000 to $150,000 — but “Despite these increases, the new bonding levels are unlikely to cover the complete cost of cleaning up the more than 90,000 unplugged wells overseen by the Bureau of Land Management.”

Under the new rule, companies will pay a higher royalty tax rate on profits from extraction.

While many environmentalists praise the changes, some say updating rules for oil and gas extraction is not enough to reduce fossil fuel dependence and extraction in the long term. According to Gladys Delgadillo, a climate campaigner at the Center for Biological Diversity, “Updating oil and gas rules for federal lands without setting a timeline for phaseout is climate denial, pure and simple.”

Monday, April 15, 2024 in High Country News

Aerial view of homes on beach in Maui, Hawaii

Hawaii Passes First Legislation Regulating Short-Term Rentals Statewide

The new law will give counties the power to limit number or short-term rentals and convert existing short-term rental units back into long-term residential housing.

May 13, 2024 - USA Today

Entrance to a drive-through car wash at night with green 'Enter' sign.

Ohio Towns Move to Ban New Car Washes

City officials in northeast Ohio are putting limits on how many car wash facilities can open in their towns.

May 16, 2024 - News 5 Cleveland

Rail tracks on the left, rustic log-built train station painted reddish brown with a green metal roof and concrete platform on the right, evergreen forest and bright blue sky with fluffy white clouds in the background.

More Passenger Rail Coming to Montana

Planning is underway to restore a 45-year-defunct regional passenger rail line connecting southern Montana to Billings and Amtrak’s east-west Empire Builder line from Seattle to Chicago.

May 14, 2024 - 8KPAX

Aerial view of Oceanwide Plaza skyscrapers covered with graffiti tags.

LA’s Abandoned Towers Loom as a “$1.2 Billion Ruin of Global Capital”

Oceanwide Plaza, shuttered mid-construction after its developer filed for bankruptcy, has stood vacant on prime Los Angeles real estate since 2019.

44 minutes ago - The Architect's Newspaper

Close-up of back windshield of Waymo autonomous car.

NHTSA Launches Investigations Into Two More Self-Driving Automakers

The federal agency is responding to reports of crashes and erratic behavior from Waymo and Zoox vehicles.

1 hour ago - Smart Cities Dive

Texas Townhomes

Austin Reduces Minimum Lot Size

Smaller lot sizes for single-family homes can make construction more affordable and homeownership available to more households.

2 hours ago - The Texas Tribune

News from HUD User

HUD's Office of Policy Development and Research

Call for Speakers

Mpact Transit + Community

New Updates on PD&R Edge

HUD's Office of Policy Development and Research

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.