Interior Dept Eases Rules To Raise Oil, Gas Output In US West

Interior Dept Eases Rules To Raise Oil, Gas Output In US West

President Donald Trump's tax cut law directs the Secretary to approve commingling applications

The U.S. Interior Department has proposed changes to rules, allowing energy companies, mostly in the U.S. West, to easily combine oil and gas output from multiple leases using the same well pad. By making operations more efficient, the industry would save $1.8 billion annually.

The current Bureau of Land Management regulations restrict commingling to leases having identical mineral ownership, royalty rates and revenue distribution.

However, President Donald Trump's tax cut law directed the Interior secretary to approve commingling applications.

The department maintained that the requirements would create barriers in parts of the West where mineral ownership is complex. The change will allow oil and gas operators to accurately track production and calculate the royalties drillers pay to the government and tribes for fossil fuels produced on public and tribal lands.

Interior Secretary Doug Burgum stated, "The current rules were written for a different era. The updates will help us manage public resources more efficiently, support responsible energy production, and make sure that taxpayers and tribes get every dollar they're owed."

The Western Energy Alliance has desired greater access to commingling, which increases onshore production. Several projects have been held up for years by the Interior's Bureau of Land Management due to non-approval of federal and private oil and gas in consolidated projects.

The US is the world's top oil and gas producer and President Trump’s ‘energy dominance’ policy has led the administration to reduce regulations on fossil fuels, much of which is meant to slow climate change and pollution.