Published: August 21, 2025 |

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Following President Trump’s signing of the One Big Beautiful Bill Act, or H.R. 1, the Department of the Interior is implementing key changes that will promote U.S. energy production and other regulatory actions needed to ensure the responsible management of our natural resources and public lands.

The sweeping legislation is a major win and critical component of the Trump administration’s energy dominance agenda. Within the Department of the Interior, the Bureau of Land Management, the Bureau of Ocean Energy Management, the Bureau of Safety and Environmental Enforcement, the Bureau of Reclamation, the Office of Surface Mining, and other relevant offices are working diligently to enforce this landmark congressional action. 

“The One Big Beautiful Bill Act is a historic piece of legislation that will restore energy independence and make life more affordable for American families by reversing disastrous Biden-era policies that constricted domestic energy production,” said Interior Secretary Doug Burgum.

“This marks a significant shift in how we manage our public lands, support energy development and work with local communities. The Department is proud to implement President Trump’s agenda and get the federal government back to working for the American people,” added Burgum.

The following are significant changes enacted by the One Big Beautiful Bill Act, which the Interior will be implementing through an expedited rulemaking process: 

OFFSHORE OIL AND GAS DEVELOPMENT

• The federal royalty rate is reduced to no less than 12.5 percent and no greater than 16.67 percent. This change gives the Department of the Interior increased discretion to encourage domestic Outer Continental Shelf production and investment by lowering the royalty rate charged to producers. In 2022, the Inflation Reduction Act mandated a 16.67 percent minimum royalty rate, discouraging investment in domestic oil and gas production.

• In the Gulf of America, the Bureau of Ocean Energy Management is mandated to hold at least two offshore lease sales each year through 2039. The first of these lease sales is scheduled on December 10, 2025. The second of these lease sales will be held by March 15, 2026, and the third will be held by August 15, 2026.

• Alaska leasing resumes with a minimum of six offshore lease sales occurring in the Cook Inlet Planning Area Leasing from 2026-2032. The first of these lease sales will be held by March 15, 2026.

• Under the One Big Beautiful Bill Act, Bureau of Safety and Environmental Enforcement, or BSEE, must approve commingling requests unless safety or resource recovery would be harmed. Downhole commingling is the production of oil or natural gas from multiple reservoirs through a single well. The process allows for more efficient and cost-effective production.

ONSHORE OIL AND GAS DEVELOPMENT

• The royalty rate for new federal onshore production will also return to a minimum 12.5 percent, reversing the 16.67 percent rate established in the Inflation Reduction Act. This royalty rate reduction will lead to an estimated 225 additional leases in 2026, and over the following few years, will lead to an average of 160 wells drilled on these additional leases.

• Onshore lease sales will be required quarterly in compliance with the Mineral Leasing Act.

• The One Big Beautiful Bill Act eliminates expression of interest fees, paid by lessees to nominate land for leasing, also an unnecessary measure pushed by Democrats in the Inflation Reduction Act to restrict new energy production

• Upon approval, a permit to drill will now be valid for a four-year period.

• The royalty requirement is repealed on extracted methane established by the Inflation Reduction Act, which recklessly forced producers to pay extremely burdensome fees or to shut-in production.

• The Bureau of Land Management, or BLM, must now lease nominated parcels within 18 months and may not add new restrictions outside of the conditions of approval included in the resource management plans.

• New legal definitions for “eligible” and “available” lands are being adopted to reduce leasing disputes.

• The BLM will update oil and gas regulations that would make it easier for operators to combine, or commingle, production from multiple leases. This measure reduces costs, improves production and decreases surface use.

COAL

• The royalty rate will be reduced from 12.5 percent to 7 percent, which significantly decreases the per-ton cost of producing coal, improving financial viability for producers.

• Federal leasing will be restored, including a mandate to increase the availability for lease of 4 million acres of public lands with known coal reserves.

• Coal lease reviews will be streamlined.

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