New Mexico Oil and Gas Lease Sale Nets More Than $58 Million: DOI

This is the first lease sale under the One Big Beautiful Bill Act which lowered royalty rates for oil and gas production.

An oil well pump jack is seen at an oil field supply yard near Denver, Colo., on Feb. 2, 2015. Rick Wilking/Reuters

The Bureau of Land Management (BLM) New Mexico State Office has generated over $58.26 million in revenues through oil and gas lease sales for the most recent quarter, the Department of the Interior (DOI) said in a July 24 statement.

The revenue came from the lease sale of 16 parcels totaling roughly 7,501 acres and represents the “third highest value for highest bid/acre for a parcel for BLM,” it said. The revenues from lease rentals and bonus bids will be distributed between New Mexico and the federal government.

This is the first lease sale done under the One Big Beautiful Bill (OBBB) Act that was signed into law by President Donald Trump on July 4.

OBBB reset the minimum royalty rate for new federal onshore oil and gas production to 12.5 percent. The Biden administration had hiked the rate from 12.5 percent to 16.67 percent in compliance with the Inflation Reduction Act.

The royalty rate reduction brings down the cost of doing business on public lands, thus making oil and gas development a more attractive proposition for businesses. The rate reduction is expected to trigger more leasing and drilling, DOI said.

The lease sale at New Mexico BLM is “another strong step toward restoring American Energy Dominance,” said Secretary of the Interior Doug Burgum.

“By reversing burdensome Biden-era royalty hikes, we are unleashing the full potential of our public lands, lowering energy costs for hardworking Americans and strengthening our national and economic security,” he said.

“Under President Trump’s leadership, we are putting energy back in the hands of the American people and securing a brighter, more prosperous future.”

BLM said the lease sales were in line with Trump’s Jan. 20 executive order, Unleashing American Energy.

The order said the United States was “blessed with an abundance of energy and natural resources,” but that the development of these resources has been impeded over recent years due to “burdensome and ideologically motivated regulations.”

“It is thus in the national interest to unleash America’s affordable and reliable energy and natural resources,” it said.

Trump then issued an executive order on Feb. 14 to formally create the National Energy Dominance Council, a White House panel that will coordinate and direct energy policy to ensure the United States achieves “energy dominance.”

Under the Trump administration, the DOI has made several changes to its policies. On May 12, the agency revealed a policy revision aimed at speeding up the leasing process of oil and gas on public lands.

The updated policy allows the BLM to finish a parcel review process for such transactions within six months from the beginning of scoping. This is a reduction from the eight to 15 months BLM previously took to complete the parcel review process.

On July 7, DOI proposed a new update to BLM oil and gas regulations, which would make it “easier for operators to combine production from multiple leases—a practice known as commingling.”

“This will implement the One Big Beautiful Bill’s directive to the Secretary of the Interior to approve onshore commingling applications. This approach allows oil and gas to be produced from different leases, often under different ownership, using the same well pad, which reduces environmental impacts, lowers operating costs, and increases overall efficiency,” the agency said.

Meanwhile, new revelations regarding America’s energy potential were made in an announcement on June 18, when the DOI released a U.S. Geological Survey (USGS) report regarding undiscovered oil and gas resources in federally managed public lands.

USGS estimated there were 29.4 billion barrels of oil and 391.6 trillion cubic feet of gas that are technically recoverable under these lands. If these resources are tapped, it would be enough to meet the country’s gas demand for 12 years and oil needs for four years.

“American Energy Dominance is more important than ever, and this report underscores the critical role science plays in informing our energy future,” said Burgum.