The House Natural Resources Committee unveiled its part of the Republicans’ tax, national security and energy megabill Thursday night, detailing plans to meet the president’s “drill, baby, drill” agenda.
Committee Republicans and the Congressional Budget Office project the legislation would decrease the deficit by about $15 billion over a 10-year window, driven by increased revenue from expanded oil, gas and mineral production. Notably absent from the bill’s text are sales of public land, which Republicans had considered.
Chair Bruce Westerman (R-Ark.) has scheduled a markup on the legislation for Tuesday as nearly every House committee races to approve their corner of the Republicans’ budget reconciliation package, which would bypass the Senate filibuster.
The budget bill’s tax cuts alone are expected to carry a multitrillion-dollar price tag, making revenues raised by the Natural Resources bill critical to paying for it. Even so, they represent a fraction of the money that Republicans will need.
The bulk of the revenue in the Natural Resources plan would come from selling new leases for energy and mineral production. Specifically, the measure would mandate quarterly onshore lease sales, four new sales in the Arctic National Wildlife Refuge, and new offshore lease sales in the western Gulf of Mexico and Alaska’s Cook Inlet.
The ANWR sales are expected to draw opposition, particularly after the last two sales Congress mandated there flopped, bringing in meager revenues. To get around that, the committee says it is reducing some “roadblocks” that they believe made the prior lease sales untenable.
Republicans have blamed former President Joe Biden for the lack of success in ANWR, while Democrats maintain that the area is simply a bad investment for oil companies due to its harsh climate and lack of infrastructure.
“We’re trying to provide some more clarity and certainty there, so that a future administration couldn’t just on its own decide to revoke documents that were issued,” said a committee aide, who was granted anonymity to speak freely about the bill’s details.
“No one would want to bid on a lease sale or invest in production up there if a future administration could just again, unprompted, just come in and pull back an EIS [environmental impact statement] or a permit.”
Reduced royalty rates
The bill would return oil and gas royalties to pre-Inflation Reduction Act rates. That law, which Democrats passed using reconciliation in 2022, raised onshore and offshore royalty rates to 16.67 percent from 12.5 percent for 10 years. Offshore royalties were capped at 18.75 percent.
The lower royalty rate, the committee says, will produce more federal revenue by making lease sales more attractive to potential lessees.
“We believe the royalty rate never should have been increased,” the committee aide said. “Dropping the royalty rate obviously will increase interest and investment in increasing oil and gas production, which would bring in more revenues.”
Democrats are likely to pounce on that argument. Over the last 10 years, which encompassed both the first Trump administration and the Biden administration, royalties accounted for an overwhelming majority of federal natural resources revenues. Even in 2022, the best year for leasing in that span, leases brought in about $4.7 billion. Royalties raised $16.7 billion.
The bill would introduce some narrow changes to the permitting process to accelerate timelines. The bill aims for projects to receive their EIS within a year and environmental assessment within six months. It also includes litigation limits.
Project sponsors would be able to pay a fee for accelerated permitting, satisfying the needed budget nexus for reconciliation, according to the committee aide.
When it comes to coal and mining, the legislation would require the Interior Department to begin leasing known coal tracts. Notably, the bill does not contain any expedited approvals for specific mining projects, something Westerman once floated.
Federal lands, waters
While land sales appear to be off the table for now, Natural Resources is still making several changes on federal land management.
The committee bill would undo several resource management plans that were put in place by the Biden administration. According to a committee aide, those revoked plans would affect Wyoming, Montana, North Dakota and Colorado.
“These resource management plans took millions of acres offline for both mineral development and energy development,” the aide said. “By bringing those resources back online, we’re making them available for future production.”
The aide said the committee is also rescinding what it calls “slush funds” created by the Inflation Reduction Act at the Bureau of Land Management, the National Park Service, the Forest Service and NOAA.
For NOAA specifically, the committee aims to rescind unobligated funds from the Coastal Communities and Climate Resilience account and the NOAA Facilities and Marine Sanctuary account.
Renewable energy, timber sales
The new bill borrows language from the “Public Land Renewable Energy Development Act,” which has had versions in the House led by Reps. Paul Gosar (R-Ariz.). The bill would streamline permitting for renewable energy projects on public lands and create a revenue-sharing model.
According to the committee aide, the bill would split up revenues three ways: 25 percent to the county, 25 percent to the states and 50 percent to the federal government.
The Natural Resources legislation would mandate annual geothermal leasing. It would also mandate a timber harvest on federal forest system lands that is 25 percent larger than what was harvested in fiscal 2024.
The committee plan would spend some money to fund celebrations for the 250th anniversary of the United States, build a “National Garden of American Heroes” and fund some Bureau of Reclamation water infrastructure.
