Unleashing Onshore Energy

Author: Austin Gae

TOPLINE:

The One Big Beautiful Bill (OBBB) unlocks America’s onshore energy potential by requiring additional oil and gas leases on public land. 

BACKGROUND:

The U.S. is abundantly endowed with energy resources, including an estimated 29 billion barrels of oil, 392 trillion cubic feet of natural gas, and 8.4 billion barrels of natural gas liquids located on federal lands. Alaska, New Mexico, Nevada, Wyoming, and Texas hold the largest oil resources on federal lands while Alaska, New Mexico, Colorado, Wyoming, and Texas lead in natural gas resources. Federal lands accounted for 14% of U.S. oil production and 10% of natural gas production in FY 2024, making a meaningful contribution to reliable and affordable American energy.

What OBBB Did:

• Decreases the minimum oil and gas royalty rate from 16.66% to 12.5%.
• Requires at least four oil and gas lease sales each fiscal year in each of these states: Wyoming, New Mexico, Colorado, Utah, Montana, North Dakota, Oklahoma, Nevada, and Alaska.
• Requires at least four oil and gas lease sales in the Coastal Plain region in Alaska and at least five in the National Petroleum Reserve in Alaska within 10 years.

Why It Matters?

• More oil supply makes goods and services more affordable. Each barrel of crude oil produces about 20 gallons of gasoline, 12 gallons of diesel, 4 gallons of jet fuel, and other petroleum products.
  • Lower costs are reflected in everything from food prices to shipping costs to air travel.
• Onshore oil and gas development on federal lands provided almost 250,000S. jobs as of 2022. Expanding onshore oil leases will expand American job opportunities.
• States benefit, receiving 50% of bid payments, production royalties, and other revenues from federal oil and gas leases. These funds help finance government services to Americans or reduced state taxes.

Where Can I Find Changes?

OBBB Section 50101, 50104-50105; 30 U.S.C. § 226, 16 U.S.C § 3143, 42 U.S.C. § 6506a.

BOTTOMLINE:

Congress helped American workers and consumers by unlocking more lands for oil and gas development, prioritizing energy affordability and quality American jobs.

This memo is part of the One Big Beautiful Booklet, a collection of more than 60 memos that examine and summarize the major aspects of the One Big Beautiful Bill – the signature legislative achievement of President Trump and the 119th Congress.