Federal Leases for Oil and Gas Drilling

On April 15, President Biden announced that the Department of the Interior will resume selling leases for oil and gas drilling on federal land. 

This is a quick turnaround for Biden, who, during his 2020 presidential campaign, proposed a moratorium on the sale of new oil and gas leases on federal land. In his first week in office, he signed an executive order to deliver on that promise; however, a federal judge in Louisiana later blocked that order.

It’s not business as usual with the new leases, though. Royalties will increase from 12.5% to 18.75%, and the acreage available for drilling leases has been reduced by around 80% from the amount previously under evaluation. The Bureau of Land Management has also "assessed potentially available and eligible acreage" in the states of Alabama, Colorado, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Utah and Wyoming.

With soaring gas prices driving 40-year-high inflation,  the Biden administration has been under pressure to do more to lower them. Industry experts say it would take at least six months to a year before new drilling on federal land would lower the cost of gasoline. The administration is contending that the reopening of drilling is based on being more responsible and “says everything about what we value as a nation.”

Don’t forget, Schneider Downs offers simpLEASE, a software program that assists with the accounting requirements set forth by ASC 842. The program was developed in conjunction with the accountants at SD, is easy to use and provides accurate analysis for all lease computations. Visit simpLEASE to learn more. 

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2024 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
2024 Energy and Natural Resources Legislative and Regulatory Update
Reporting Responsibilities Under Federal Grants for Orphaned Well Plugging and Reclamation
Postcard from the AADE Operator’s Forum
An Increase in LNG Exports Could Lead to Higher Seasonal Price Volatility
Potential Accounting Changes for Environmental Credits
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us
Pittsburgh

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.

×