The Biden Administration recently released its most recent agency rulemaking calendar.  In their update, the Administration underscored priorities among federal agencies over the next 6 months. Several proposed rules address federal lands management and energy development.

Notably, the most recent version of the Unified Agenda contains tentative releases dates for several highly anticipated final rulemakings. A number of proposed rules are expected as well.

 
TCS has already commented on many of these proposed rules and will continue to engage with them as the Administration releases final proposals over the next year.

Federal Onshore Oil and Gas Leasing

The Bureau of Land Management (BLM), under the Department of the Interior (DOI), is responsible for managing the development of the 700-million-acre federal subsurface mineral estate, which contains valuable, taxpayer-owned oil and gas resources. Two proposed rules seek to reform federal onshore leasing terms to increase taxpayer returns and reduce methane emissions.

• Bureau of Land Management –  Fluid Mineral Leases and Leasing Process
  • The proposed rule would codify reforms to the federal onshore oil and gas leasing system passed by Congress in 2022 through the Inflation Reduction Act – such as increasing fees, rents, and royalties –  and implement additional reforms, including updating federal oil and gas bonding requirements and directing leasing away from land that has a low potential for oil and gas development or has high environmental, recreational, or cultural value.
  • The final rule is expected in April 2024. The proposed rule was published on July 24, 2023.
  • TCS submitted comments on the proposed rule applauding BLM’s effort to implement these much needed reforms and urging the agency to institute a higher royalty rate to ensure a fair return to taxpayers: Comments to the Department of the Interior on Fluid Mineral Leases and Leasing Process

• Bureau of Land Management – Waste Prevention, Production Subject to Royalties, and Resource Conservation
  • The proposed rule aims to reduce methane waste from oil and gas production on federal lands by restricting routine venting and flaring requiring operators to take affirmative actions to reduce waste and maintain a waste minimization plan.
  • The final rule is expected in January 2024. The proposed rule was published on November 30, 2022.
  • TCS submitted comments on the proposed rule urging the BLM to finalize a stronger rule that prohibits routine venting and flaring: Comments on Bureau of Land Management Proposed Methane Rule

Federal Onshore Renewable Energy Development

In addition to oil and gas development, federal land is also used by private entities for renewable energy development. A proposed rule seeks to modify how federal land is leased for solar and wind projects.

• Bureau of Land Management – Rights-of-Way, Leasing and Operations for Renewable Energy
  • The proposed rule seeks to expediate responsible solar and wind energy project development on public lands, including by decreasing rents and capacity fees, allowing noncompetitive leasing inside Designated Leasing Areas (DLAs), and extending maximum lease terms.
  • The final rule is expected in April 2024. The proposed rule was published on June 16, 2023.
  • TCS submitted comments on the proposed rule, recognizing the importance of incentivizing clean energy development, but urging the agency to do so without compromising getting a fair return for taxpayers: Comments to the Bureau of Land Management on Renewable Energy

Incorporating Climate Change in Federal Lands Management

The costs of climate change are rising for American taxpayers. The Administration has proposed two rules to better incorporate the realities of climate change into federal lands management and better mitigate its impacts.

• S. Forest Service – Forest and Grassland Climate Resilience
  • The advanced notice of proposed rulemaking asks for comments on how the U.S. Forest Service can adapt its policies to manage our national forests in the face of climate change.
  • A proposed rule is expected in November 2024. The advanced notice of proposed rulemaking was published on April 21, 2023.
  • TCS submitted comments on the advanced notice of proposed rulemaking, urging the agency to make sure the proposed rule conserves mature and old growth forests, creates climate resilience, protects communities, and decreases long-term liabilities associated with wildfire risks: Comments to U.S. Forest Service on Forest and Grassland Climate Resilience

• Bureau of Land Management – Conservation and Landscape Health
  • The proposed rule would clarify and support the principles of multiple use and sustained yield in the management of public lands, and designate conservation as a use under the multiple use framework.
  • The final rule is expected in January 2024. The proposed rule was published on April 3, 2023.
  • TCS submitted comments on the proposed rule, supporting BLM’s proposal to recognize conservation as an important use of our public lands that should be put on equal footing as other energy development uses: Comments to the Bureau of Land Management on Conservation and Landscape Health

Methane Emissions Reduction Program (MERP)

The Methane Emissions Reduction Program (MERP) was established by the Inflation Reduction Act and grants new authority under Section 136 of the Clean Air Act to reduce methane emissions in the petroleum and natural gas sector. The MERP has three primary components: financial incentives for methane mitigation and monitoring, waste emissions charge, and updating existing EPA GHG reporting requirements. The administration has proposed rules to address the latter two components of the MERP.

• Environmental Protection Agency – Greenhouse Gas Reporting Rule: Revisions and Confidentiality Determinations for Petroleum and Natural Gas System
  • The proposed rule seeks to fill gaps in the current Greenhouse Gas Reporting Rule by increasing the quantity and quality of emissions data reported from petroleum and natural gas facilities that emit more than 25,000 metric tons of carbon dioxide equivalent annually.
  • The final rule is expected in April 2024. The proposed rule was published on August 1, 2023.
  • TCS submitted comments on the proposed rule supporting EPA’s effort to update the GHG reporting requirements and making GHG emissions data more transparent and accessible: TCS Comments to the EPA on the Greenhouse Gas Reporting Rule

• Environmental Protection Agency – Methane Emissions and Waste Reduction Incentive Program for Petroleum and Natural Gas Systems
  • The proposed rule would impose a fee for lost gas from oil and gas operations that emit more than 25,000 metric tons of carbon dioxide equivalent annually, pursuant to the IRA.
  • A proposed rule is expected in December 2023.

Elective Payment & Transferability of Certain Energy Tax Credits

For certain taxpayers, many of the clean energy tax credits created or modified in the Inflation Reduction Act (IRA) – including the 45U Zero-emission Nuclear Power Production Credit and 45Q Carbon Oxide Sequestration Credit – can be claimed as a direct payment or transferred to other, unrelated taxpayers. The Treasury Department has released two proposed rules to govern implementation of these features. In our comments, TCS acknowledged how these two provisions would greatly monetize the energy tax credits expanded and/or created under the IRA and urged the IRS to establish oversight mechanisms to prevent fraud, waste, abuse of tax credits that benefit from these provisions.

• Department of the Treasury – Elective Payment of Applicable Credits Under Section 6417
  • The proposed rule would codify Section 13801(a) of the Inflation Reduction Act, which allows certain taxpayers to elect credits as a direct payment rather than a credit against their federal income tax liabilities.
  • The final rule is expected in June 2024. The proposed rule was published on June 21, 2023.
  • TCS submitted comments on the proposed rule here: TCS Comments to the IRS on Elective Payment

• Department of the Treasury – Transfer of Certain Credits Under Section 6418
  • The proposed rule would codify Section 13801(b) of the Inflation Reduction Act, which allows the transfer of eligible credits from eligible taxpayers to an unrelated taxpayer.
  • The final rule is expected in June 2024. The proposed rule was published on June 21, 2023.
  • TCS submitted comments on the proposed rule here: TCS Comments to the IRS on Transfer of Certain Credits