Mandatory Spending

Function 300 - Natural Resources and Environment

Change the Terms and Conditions for Federal Oil and Gas Leasing

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of dollars 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015-2019 2015-2024
Change in Outlays 0 * -0.4 -1.0 -0.7 -0.3 -0.8 -0.9 -0.4 -0.6 -2.1 -5.2

Notes: This option would take effect in October 2015. Estimates are relative to CBO’s August 2014 baseline projections.

* = between -$50 million and zero.

The federal government offers private businesses the opportunity to bid on leases for the development of most of the onshore and offshore oil and natural gas resources on federal lands. This option would change several aspects of those leasing programs. It would increase the acreage available for leasing by repealing the statutory prohibition on leasing in the Arctic National Wildlife Refuge and by directing the Department of the Interior to auction leases for areas on the Outer Continental Shelf that are unavailable for leasing under current administrative policies. The option also would impose a fee on all new leases of tracts from which oil or gas is not being produced. Finally, the option would eliminate payments of interest on overpayments of royalties by lessees. (Royalties are assessed on the value of oil and gas produced from leased areas.)