What happened?

Some 5,707 oil and gas leases on federal land sat idle in fiscal year 2025, producing nothing, even as Congress debates whether the government is collecting enough money from energy companies drilling on public property. [](#ngr-50914c01-84a7-4b7d-a4ec-3b7cc456b38e)

The Congressional Research Service, the nonpartisan agency that researches policy questions for Congress, updated its report this month. It covers more than 700 million acres of federal land managed by the Bureau of Land Management (BLM), a federal agency inside the Department of the Interior. That land sits beneath much of the American West and holds oil, natural gas, and geothermal energy resources.

Why Does it Matter to Me?

Federal energy leasing affects gas prices, electricity costs, and how much money flows back to taxpayers from companies that drill on public land. Energy companies pay the government rent before production starts and royalties once they begin pulling resources out of the ground.

The minimum oil and gas royalty rate, the share of production value the government collects, is 12.5 percent. A recent law, P.L. 119-21, locked in that 12.5 percent floor, eliminated royalties on vented or flared methane, and brought back a process called noncompetitive leasing, which allows companies to acquire leases without going through a bidding process.

Geothermal energy, which taps heat from the earth to generate electricity, carries lower royalty rates: one to 2.5 percent for the first 10 years, rising to two to five percent after that.

Both sides, now

The central debate is whether federal rules strike the right balance between encouraging energy development and protecting land, water, and taxpayers.

Supporters of looser requirements argue that lower royalties, faster permits, and noncompetitive leasing encourage investment and boost domestic energy production. The recent law cutting the royalty rate and restoring noncompetitive leasing reflects that view.

Critics point to the nonproductive lease problem: in fiscal year 2025, 5,707 of 29,354 onshore oil and gas leases, roughly one in five, were not producing. On the geothermal side, 522 of 610 leases sat idle. Opponents of looser rules argue that companies can hold land without developing it, limiting both production and government revenue.

Bonding requirements, the money companies must set aside to clean up a well site, are also in dispute. A 2024 rule raised the minimum bond to $150,000 per lease and $500,000 statewide. A proposed rule published in June would roll those amounts back to $10,000 and $25,000, the previous levels.

What happens next?

The Congressional Research Service report lays out six areas for Congress to consider, including royalty rates, nonproductive leases, bonding requirements, noncompetitive leasing, permit timelines, and environmental review under the National Environmental Policy Act (NEPA), the law requiring agencies to assess environmental effects before approving major projects.

The proposed rule to lower bonding requirements is still in the rulemaking process, meaning it is open to public comment before it can take effect. Congress could also act through legislation to change royalty rates or lease terms further, but no specific bill has been scheduled for a vote.

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This article was generated by AI pulling from data. Each article is edited by an editor for accuracy and clarity.

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