# 2026-12738: BLM Updates Royalties on Wasted Federal Oil and Gas

2026-12738, Royalty for Oil and Gas Lost From Onshore Federal and Indian Leases, is a Federal Register proposed rule from Interior Department, Land Management Bureau published 2026-06-24, effective Send your comments on this proposed rule to the BLM on or before August 24, 2026. The BLM is not obligated to consider any comments received after this date in making its decision on the final rule.; deemed significant under Executive Order 12866; PRIA reads it as touching household money (as of 2026-07-01).

- Canonical: https://policyrisk.com/federal-register/2026-12738
- As of: 2026-07-01
- Plain-text twin of the page above; the HTML and this file carry the same facts.

## Facts
- Document number: 2026-12738
- Title: Royalty for Oil and Gas Lost From Onshore Federal and Indian Leases
- Type: Proposed Rule
- Agencies: Interior Department; Land Management Bureau
- Citation: 91 FR 37906
- Published: 2026-06-24
- Effective: Send your comments on this proposed rule to the BLM on or before August 24, 2026. The BLM is not obligated to consider any comments received after this date in making its decision on the final rule.
- Comments close: 2026-08-24
- Significant: yes (FR_METADATA)
- Touches household money: yes
- Regulation identifier numbers: 1004-AF33
- Last updated: 2026-07-01

## In one line

BLM Updates Royalties on Wasted Federal Oil and Gas

## Summary

The Bureau of Land Management is updating rules about royalties on oil and gas lost from onshore Federal and Indian leases. These changes make it easier for operators to follow the rules and speed up how royalties are figured out. If you’re involved, get your comments in by August 24, 2026, because this could affect how much money is paid or saved.

## Abstract

In response to the One Big Beautiful Bill Act, enacted on July 4, 2025, and Executive Order (E.O.) 14154, entitled, "Unleashing American Energy," dated January 20, 2025, the Bureau of Land Management (BLM) is proposing to modify its existing regulations pertaining to royalties due on oil and natural gas lost on Federal and Indian leases. These modifications would reduce unnecessary compliance burdens for operators and streamline the BLM's royalty determinations on lost oil or natural gas.

## Effects PRIA read

- Remove APD Waste Plan Requirement: benefit, medium. If you operate oil or gas wells on Federal or Indian leases, the BLM proposes to remove the rule that required a Waste Minimization Plan (WMP) or a 100% gas-capture self‑certification with an application for permit to drill (APD). The BLM estimated the recurring cost of that requirement at $400,000…
- Drop LDAR Program Requirement: mixed, medium. The BLM proposes to eliminate the 2024 Rule's required Leak Detection and Repair (LDAR) programs for operators. The agency estimated LDAR would cost operators $16.8 million annually while producing about 555,000 Mcf of additional captured gas with an annual royalty value of $210,000.
- Eliminate Flaring Limits (Mcf/Bbl): mixed, medium. The proposed rule would remove the 2024 Rule limits on royalty-free flaring that set per-month thresholds of 0.08, 0.07, 0.06, and 0.05 Mcf per barrel of oil for years 1–4 and thereafter. Removing these numeric caps would reduce accounting and royalty obligations for operators but also reduce some…
- No Royalties on Unmerchantable Gas: benefit, low. The BLM proposes to add that flaring of gas deemed unmerchantable—when the operator demonstrates poor gas quality—would be treated as an unavoidable (royalty-free) loss. Operators who can show the gas is unmerchantable would not pay royalties on that gas.
- New Venting/Flaring Measurement ID: cost, low. The proposed rule would add a new requirement that operators apply for a Venting and Flaring Measurement Point (VFMP) number to use for monthly production accounting on Oil and Gas Operations Reports (OGORs). This creates a new administrative task for operators to track venting and flaring at a des…

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## Sources
- [2026-12738 on federalregister.gov](https://www.federalregister.gov/documents/2026/06/24/2026-12738/royalty-for-oil-and-gas-lost-from-onshore-federal-and-indian-leases)
- [2026-12738 as published (PDF)](https://www.govinfo.gov/content/pkg/FR-2026-06-24/pdf/2026-12738.pdf)

## Related
- [Previous: 2026-12734, Oil and Gas Leasing](https://policyrisk.com/federal-register/2026-12734)
- [Next: 2026-12742, Joint Request for Comment on Swap and Security-Based Swap Data Reporting](https://policyrisk.com/federal-register/2026-12742)
- [All Federal Register documents](https://policyrisk.com/federal-register)

Source: PRIA, https://policyrisk.com/federal-register/2026-12738 (as of 2026-07-01).