Environment — News & Analysis

"One Big Beautiful Bill" mandates fossil fuel lease sales through 2040, cuts industry royalties (July 4, 2025)

July 4, 2025 — In addition to its sweeping cuts to SNAP and Medicaid, the One Big Beautiful Bill Act includes major public lands and fossil fuel provisions, mandating rolling offshore oil and gas lease sales through 2040 in the Gulf of Mexico and Alaska's Cook Inlet, significantly reducing the royalty rates that companies pay when extracting publicly-owned oil and gas, and reducing the bonds that drillers must post before beginning extraction — making it easier for companies to walk away and leave taxpayers responsible for cleanup costs.

The Bureau of Land Management was directed to accelerate onshore permitting, having already issued new guidance in April setting a strict 28-day target for processing drilling permit applications. In late 2025, the BLM conducted massive lease sales across New Mexico, Wyoming, and Colorado. The law also directed the Interior Department to hold its first major offshore sale under the new mandate — the "BBG1" sale in December 2025, offering 80 million acres for offshore drilling. The law simultaneously reinstated preferential treatment for mining and pipeline projects, including the long-contested Ambler Road in Alaska.

Environmental groups noted the combined effect of the law's provisions: mandatory drilling on public lands regardless of market conditions or environmental assessments, reduced financial accountability for industry, and accelerated extraction of publicly-owned resources at below-market returns. The Alaska LNG pipeline — which would cross more than 800 miles of ecologically sensitive terrain — received renewed preferential permitting status. The Arctic National Wildlife Refuge, previously barred from leasing by court orders, was again opened to drilling.