The Bureau of Land Management is proposing changes to federal oil and gas leasing regulations that would sharply reduce financial assurance, or bonding, requirements for drilling companies and expand opportunities to lease public lands for development.
Cleanup bonds could fall by as much as 95%
Under the proposal, the minimum bond for an individual federal oil and gas lease would fall from $150,000 to just $10,000. A statewide bond covering all of a company’s federal oil and gas operations could drop from $500,000 to $25,000.
These bonds are intended to help cover the cost of plugging wells and restoring drilling sites once operations cease. When cleanup costs exceed the bond and an operator cannot pay, taxpayers may be left responsible for the difference.
“Bonding requirements should reflect the actual cost of plugging wells and restoring public lands,” said Los Padres ForestWatch Executive Director Jeff Kuyper. “Reducing them to levels established more than 60 years ago would virtually guarantee that the public is left holding the bill when drilling companies walk away. A $10,000 bond will not come close to restoring a damaged drilling site, but that is exactly the risk the administration is asking taxpayers to accept.”
California has documented more than 5,300 orphan, deserted, or potentially deserted oil and gas wells. According to the California Geologic Energy Management Division, plugging and abandoning a single well can cost anywhere from $25,000 to more than $1 million, depending on its location, depth, and complexity.
Proposal would expand leasing opportunities
The proposal would also require additional lease auctions in some circumstances and allow unsold parcels to remain available for noncompetitive leasing for up to two years.
The rule change comes as BLM considers offering 50 oil and gas parcels covering approximately 36,000 acres in Kern, Kings, San Luis Obispo, and Fresno counties.
Nearly 13,000 acres are located along the boundary of Carrizo Plain National Monument, with other parcels near communities, schools, and critical wildlife habitat.
Take Action
Los Padres ForestWatch is urging BLM to maintain bonding requirements that reflect realistic cleanup costs and to carefully evaluate whether additional public lands should be offered for oil and gas development.
The public has until August 24, 2026, to comment on the proposed rule.