Miles SmithThe Department of the Interior (DOI) has proposed updates to Bureau of Land Management (BLM) oil and gas regulations that would relax rules that currently prohibit developers with federal leases from using the same equipment to mix and produce oil and gas from different leases.
The changes would allow companies to commingle output, or combine oil and gas pulled from different subterranean surfaces in the same surface facilities.
These updates would make it easier for operators to combine onshore production from multiple leases, the DOI said, noting that current metering and measurement technologies can now track production and allocate royalties at individual wellheads to BLM standards.
The changes — which are part of a federal directive to increase fossil fuel production in the One Big Beautiful Bill Act — are being proposed as the White House seeks to bolster production of fossil fuels.
Current BLM regulations restrict commingling to leases that have identical mineral ownership, royalty rates and revenue distribution.
The proposed changes would allow commingling even when these conditions differ, unlocking greater energy potential, the DOI said.
Federal officials anticipate the updated rules could result in $1.8 billion in industry savings annually, providing operators the ability to reinvest in new energy production and reducing the need for duplicative production infrastructure.
Next steps include:
- Updating regulations under 43 CFR Subpart 3173, which outlines BLM requirements for site security and production handling of oil and gas operations on federal and Indian onshore leases.
- Beginning the formal rulemaking process, which will include periods for public comment.
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