Land management bureau lessens requirements for oil and gas royalty cut requests

The Bureau of Land Management (BLM) has changed its guidance for companies that want to see their royalty payments for oil and gas leases reduced, lessening the requirements for what companies need to prove in order to get the rate cuts. The bureau’s prior guidance, issued in April, stated that companies applying for royalty relief on leased federal lands had to show that leases are “uneconomic at the current royalty rate, but would be economic with a royalty rate reduction.” The new guidance, however, requires only that the leases are “uneconomic at the current royalty rate.” Democrats, in a letter to the Interior Department, which oversees the bureau, argue that this change puts the bureau in violation of the Mineral Leasing Act, which gives the department the authority to grant royalty relief if applicants show “that a reduction of that rate is necessary to promote development of the lease.” The BLM, in a statement to The Hill, disagreed with the lawmakers’ interpretation of the Mineral Leasing Act. “Neither the MLA nor the regulations require a BLM determination that a royalty reduction renders a lease to be economic,” the agency said, adding that the new guidance “clarifies and more closely aligns with the statutory and regulatory standards.”...MORE