These warnings come even as Trump has installed friendly faces to regulate the oil and gas sector, including at the Department of Energy, the Environmental Protection Agency, and the Department of the Interior, the latter of which manages federal lands and is gearing up to auction more oil and gas leases on those lands.
“There’s a lot of enthusiasm for a window of opportunity to make investments. But there’s also a lot of caution about wanting to make sure that if there’s regulatory reforms, they’re going to stick,” said Kevin Book, managing director of research at ClearView Energy Partners, which produces analyses for energy companies and investors.
The recently enacted One Big Beautiful Bill Act contains provisions requiring four onshore and two offshore lease sales every year, lowering the minimum royalty rate to 12.5 percent from 16.67 percent, and bringing back speculative leasing—when lands that don’t invite enough bids are leased for less money—that was stopped in 2022.
“Pro-energy policies play a critical role in strengthening domestic production,” said a spokesperson for the American Petroleum Institute, the top US oil and gas industry group. “The new tax legislation unlocks opportunities for safe, responsible development in critical resource basins to deliver the affordable, reliable fuel Americans rely on.”
Because about half of the federal royalties end up with the states and localities where the drilling occurs, “budgets in these oil and gas communities are going to be hit hard,” Rowland-Shea of American Progress said. Meanwhile, she said, drilling on public lands can pollute the air, raise noise levels, cause spills or leaks, and restrict movement for both people and wildlife.
Earlier this year, Congress killed an EPA rule finalized in November that would have charged oil and gas companies for flaring excess methane from their operations.
“Folks in the Trump camp have long said that the Biden administration was killing drilling by enforcing these regulations on speculative leasing and reining in methane pollution,” said Rowland-Shea. “And yet under Biden, we saw the highest production of oil and gas in history.”
