House Panel Seeks Boost For Oil, Coal On Fed Lands

In a major effort to reform U.S. energy policy, a House of Representatives committee will consider sweeping revisions to oil, gas, and coal drilling rules on federal lands and oceans. The proposal, likely to be included in an upcoming budget reconciliation bill, would significantly boost fossil fuel production by relaxing restrictions and lowering the cost for energy companies. This effort is consistent with the energy policy of former President Donald Trump, who focuses on increasing domestic fossil fuel production and decreasing regulatory barriers.

At the center of the proposed bill is a requirement for a minimum of 30 new oil and gas lease sales in the Gulf of Mexico—renamed by Trump as the "Gulf of America"—to be held over a 15-year span. This provision would pre-empt the current five-year leasing plan drawn up by the Interior Department, a major departure from the manner in which offshore energy production is mapped out and regulated. Furthermore, the bill would mandate six offshore lease sales in Alaska's Cook Inlet and four onshore auctions in the Arctic National Wildlife Refuge (ANWR) over the course of the next decade. The National Petroleum Reserve in Alaska would also see lease sales every other year under the plan.

The House Natural Resources Committee is expected to hold a markup hearing on Tuesday to review the energy provisions of the budget bill. This step is crucial before the legislation moves to the House floor for a vote. The bill is moving through the reconciliation process, whereby the Republican-dominated House can fast-track it with a simple majority and bypass Democratic approval. By taking this tactical route, the Republicans can approve the bill along party lines and circumvent possible obstructions from the opposition.

The legislation being proposed extends beyond lease sales. It also contains a significant financial incentive for Alaska in that it requires, beginning in 2035, 90% of revenue generated from leasing activities within the state to be distributed to the Alaska state government. Revenues would continue to be shared with the federal government until that time. This change could greatly enhance Alaska's economy while promoting greater energy development within the area.

The Republican staff of the House committee noted that the reforms are in answer to Trump's "American energy dominance" call, noting that the measures aim to be economically and scientifically driven. In a memo dated May 4, the committee noted that the committee believed that these changes would bring back the country's energy sector by streamlining the permitting process and reducing drillers' costs.

Financial estimates attached to the proposal are also large. Based on the committee's calculations, the new leasing system and accompanying policy reforms would save and bring about around $15 billion in revenue to the federal government. A major part of this calculation is the lowering of royalty rates for offshore and onshore drilling, which would be fixed at 12.5%. Supporters argue that this adjustment will make U.S. drilling operations more competitive and attractive to investors.

The oil sector has welcomed the legislation, with one executive saying the provisions will make it through the legislative process with minimal changes because of the industry's overall power in Congress. The executive admitted that certain provisions of the bill could face judicial challenges, especially from environmentalists and other opponents.

Opposition ranks have been quick to react. Jenny Rowland-Shea, the Center for American Progress' director of public lands, dismissed the proposal as a threat that undermines the basic way public lands are managed. She said that the plan only serves Trump's donors in the oil and mining sectors at the expense of potentially undermining environmental safeguards and public interests.

As the legislative process proceeds, the outcome of Tuesday's committee hearing will be closely watched. The proposed revisions constitute one of the most ambitious attempts in recent history to increase fossil fuel production on federal lands, paving the way for a renewed debate over the balance between energy development, environmental conservation, and economic development in the United States.