We’re experiencing an onslaught of new regulations targeting oil and natural gas production from the Biden Administration. No sooner did we get our comments out the door on the Bureau of Land Management’s (BLM) conservation and landscape health rule then the next BLM rule dropped. The recently proposed bonding and royalties rule aims to implement royalty and other fee increases from the inaptly named Inflation Reduction Act (IRA), but more concerningly, add new bonding requirements that Congress jettisoned from IRA.
Despite the fact that there are only 37 orphan wells on BLM lands and only 40 calls on bonds over the last decade, the rule plows ahead with essentially what anti-oil-and-gas groups have been pushing for: the disruption of the bond market for oil and natural gas by increasing bonds to prohibitive levels, particularly for small companies.
In combination with numerous other rules from the Environmental Protection Agency, Department of Energy, Securities and Exchange Commission, Department of Labor, Department of Transportation, and many others, it’s getting hard to keep up with this administration’s attacks. Of course, as we know from emails disclosed from officials like Ann Carlson at the National Transportation and Highway Safety Administration (NHTSA), overloading the system is exactly the point. NHTSA just came out with new CAFE standards on fuel economy for all vehicles, in tandem with EPA’s greenhouse gas tailpipe emissions rule, meant to force us all into electric vehicles.
The reduced oil and natural gas development across the West will reduce job creation, tax revenue, and economic activity in many states and communities.