Coalition Comments on Revisions to Regulations Regarding Federal Oil and Gas Leasing; Fees; Rentals and Royalties
Federal Lands, Letters and Comments May 21, 2026To Whom It May Concern:
The American Petroleum Institute (“API”), Independent Petroleum Association of America (“IPAA”), Western Energy Alliance, Colorado Oil & Gas Association (“COGA”), Western Slope Colorado Oil & Gas Association (“WSCOGA”), Montana Petroleum Association (“MPA”), New Mexico Oil & Gas Association (“NMOGA”), the Petroleum Alliance of Oklahoma; and Utah Petroleum Association (“UPA”) (collectively “the Associations”) respectfully support’s the Bureau of Land Management’s (“BLM”) decision to make non-discretionary revisions to existing regulations at 43 CFR 3103.31(a)(1) – (5) to effectuate the changes required by the One Big Beautiful Bill Act (“OBBBA”) enacted on July 4, 2025.
The direct final rule is an appropriate vehicle because, at the present time, these non-discretionary changes are necessary for compliance. Section 40101(a)(1) of the OBBBA repealed Section 5026(a) of the Inflation Reduction Act (“IRA”). It also stated that any provision amended or repealed by that subsection is restored or revived as if that subsection had not been enacted into law. Therefore, the BLM correctly determined that the following changes must be made:
• 43 CFR 3103.31(a) must be revised to reflect the correct royalty rate applicable to production from Federal oil and gas leases, restoring the royalty rate to not less than 12.5 percent.
• 43 CFR 3103.31(a)(2) and (a)(3) must be removed in their entirety, as they include royalty rates that are no longer applicable.
• The current 43 CFR 3103.31(a)(4) will be redesignated to (a)(2), with all references to the IRA’s 16.67 percent royalty rate removed and adjusted to the 12.5 percent designated in OBBBA.
• A new 43 CFR 3103.31(a)(3) must be added to address the royalty rate for non-competitive leases, as reinstituted by the OBBBA.
• The current 3103.31(a)(5) will be redesignated to (a)(4) and also must be revised to address the OBBBA-designated royalty rate for reinstated leases. …
