Repealing the Oil and Gas Rule Would Be Another Industry Giveaway

The Trump administration has launched another attack on our shared public lands—this time, working to roll back accountability protections in the Bureau of Land Management’s (BLM) 2024 Onshore Oil and Gas Leasing Rule. Repealing this rule would increase government subsidies to the fossil fuel industry while threatening important wildlife habitat, recreational areas, and community health and safety.

The rule updated policies for the first time in nearly four decades and implemented a modest suite of reforms directed by Congress in the 2022 Inflation Reduction Act and the 2021 Bipartisan Infrastructure Law, after decades of governmental audits concluded that the oil and gas industry had been operating in an accountability vacuum. 

At the heart of this rule is a simple rule of fairness that almost everyone agrees on: Oil and gas companies should pay their fair share and clean up their wells when they’re done drilling—not leave taxpayers to deal with the mess and foot the bill. And this isn’t just common sense; it’s the law. Companies are legally required to plug their wells and restore the land when they’re finished drilling. Proper cleanup is essential to preventing unchecked greenhouse gas emissions, dangerous air pollution, contamination of soil and water, and threats to public safety, such as explosions. 

The 2025 reconciliation bill passed by Republicans in Congress—the so-called One Big Beautiful Bill—reversed some of the reforms set out in the 2024 rule. Most notably, it expanded subsidies for the oil and gas industry by lowering royalties and returning them to their 1920 levels, which are well below market rates.

But the 2025 bill didn’t erase everything in the 2024 rule; important provisions remain on the books, including updated bonding requirements. Before drilling a new well on public lands, oil and gas companies are required to post financial bonds that will cover well cleanup costs if a company fails to meet its legal obligations, like a security deposit. For more than 60 years, federal bonding levels never kept up with actual cleanup costs or adjusted for inflation. The 2024 rule increased bonding requirements to bring them closer to the real cost of cleanup and to adjust for inflation.

Now the Trump administration is attempting to overturn what’s left of the 2024 rule, including bonding levels, to help its friends in the oil and gas industry amass even more profits.

Senators sound the alarm

Earlier this month, senators from Colorado and New Mexico sent a letter to the secretary of the U.S. Department of the Interior. The letter urged the administration to maintain the stronger bonding requirements, calling them balanced, responsible, and essential for fiscal responsibility and fairness, as well as noting that they would “safeguard our land and water for future generations.” The senators emphasized that weakening bonding requirements would shift cleanup costs from companies to taxpayers.

This chart shows how outdated the bonds were prior to the 2024 rule:

If bond levels are not high enough to cover the actual plugging and restoration costs and companies go bankrupt or otherwise cannot be held accountable, taxpayers end up footing the bill when a well stops producing. These so-called orphan oil and gas wells pose significant risks to communities and the environment.

The 2024 oil and gas leasing rule increased bonding rates for wells on public lands from $10,000 to $150,000 per lease and statewide bonding for multiple wells (known as a blanket bond) from $25,000 to $500,000. In addition, it ended the practice of nationwide bonding that had allowed companies to post a single bond for all of their wells nationwide at an amount far below the actual cleanup costs, in another huge gift to industry. This had meant that the average bond per well was about $2,100, and the average nationwide bond worked out to $890 per well—around 1 percent of the actual average cleanup costs.

Even with the reforms that were adopted in the 2024 rule, the U.S. Government Accountability Office continues to designate the BLM’s management of oil and gas as a “high-risk” program, a dubious distinction that the BLM has held for decades. This distinction is an unfortunate demonstration of how the BLM continues to fail to enforce basic accountability measures to protect the U.S. taxpayer. Rather than protecting the public, the Trump administration is counterintuitively deciding to increase these risks even further, overturning important fiscal and environmental reforms that have overwhelming public support and providing even more subsidies to the oil and gas industry.