On June 24, 2026, the Bureau of Land Management (BLM) released a proposed rule “Royalty for Oil and Gas Lost From Onshore Federal and Indian Leases” that would roll back commonsense standards set in 2024 to reduce the waste of taxpayer-owned methane on federal lands during oil and gas development.
American taxpayers own the valuable natural resources on federal lands and BLM oversees the development of federal oil and gas by auctioning off leases for oil and gas exploration and development to private companies. In return for the right to extract our taxpayer-owned resources, these companies pay taxpayers a royalty—a set percentage of the value of oil and gas they produce.
Yet for far too long, oil and gas companies have been allowed to vent, flare, and leak methane—the main component of natural gas—much of it royalty-free. In the ten-year period from FY2012 to FY2021, oil and gas operators reported losing 300 billion cubic feet (bcf) of natural gas from leases on federal lands, which had an estimated value of $949 million. In 2024, the BLM finalized a rule titled “Waste Prevention, Production Subject to Royalties, and Resource Conservation Rule” to address this egregious waste of natural gas on federal lands. The BLM estimated that the 2024 rule would generate $51 million in additional royalty revenue per year for gas that is flared above the royalty-free volume. This proposed rule would effectively roll back most of the provisions set forth in the 2024 Waste Prevention rule.
This isn’t the first time that efforts to reduce methane waste have been pushed back. BLM first finalized a rule to address methane waste in 2016, but the first Trump Administration issued another rule in 2018 that would in effect repeal the 2016 rule, although both were eventually vacated in 2020. Following the passage of Inflation Reduction Act, which required all methane extracted from federal lands that are not unavoidably lost be charged a royalty, BLM issued the Waste Prevention rule in 2024. At the end of 2025, BLM announced that it would delay enforcement on two provisions of the 2024 rule, which was finalized earlier this year. And now, the proposed rule would in effect reverse most of the reforms made in the 2024 rule.
Below is a summary of the proposed rule and how it would effectively roll back the 2024 rule if finalized:
Technologies to detect and reduce methane waste, such as satellite monitoring, infrared cameras, and drones, have gotten more cost-effective and are already used by many oil and gas operators. But the regulatory uncertainty that has spanned almost a decade now has stalled investment by penalizing operators who have invested while rewarding those who have not. Methane mitigation also creates job opportunities and generates economic value, benefiting the industry, communities most affected by methane waste, and the public. The proposed rule would increase the waste of a valuable domestic energy resource, costing federal taxpayers millions in foregone revenue. It would also expose nearby communities to avoidable health and safety risks, leading to liabilities that will likely be shouldered by taxpayers.
