President Trump has signed the One Big Beautiful Bill Act into law, marking a significant shift in federal energy and natural resources policy. As I analyze the legislation’s impact, Title V stands out as particularly comprehensive, covering everything from oil and gas leasing to water infrastructure. Let me break down what these changes mean for Americans across different sectors.
Oil and Gas: A Return to Aggressive Leasing
The Act fundamentally reshapes federal oil and gas policy by repealing key provisions of the Inflation Reduction Act and mandating expanded drilling opportunities. The legislation requires the Department of Interior to immediately resume quarterly onshore lease sales across nine states: Wyoming, New Mexico, Colorado, Utah, Montana, North Dakota, Oklahoma, Nevada, and Alaska.
This represents a substantial acceleration of energy production. The law mandates that at least 50 percent of available parcels nominated for development must be offered in each sale, and if a sale experiences low bidding activity, replacement sales must be conducted within the same fiscal year. The implications for energy companies are significant, as this provides greater certainty and expanded access to federal lands.
For offshore drilling, the legislation is equally ambitious. The Act requires a minimum of 30 region-wide lease sales in the Gulf of America through 2040, with specific timing requirements ensuring at least two sales annually in most years. Alaska’s Cook Inlet will see six additional offshore lease sales between 2026 and 2032. These provisions should substantially increase domestic energy production capacity over the next decade.
Mining: Reduced Costs and Expanded Access
The coal industry receives considerable support through reduced royalty rates and expanded leasing opportunities. Most notably, coal royalty rates drop from 12.5 percent to 7 percent through September 2034, representing substantial cost savings for mining operations. The legislation also requires the Interior Department to make at least 4 million additional acres of federal land available for coal leasing within 90 days.
Existing coal operations benefit from streamlined approval processes, with the Act requiring Interior to complete environmental reviews and lease sales for qualified applications within 90 days. This accelerated timeline should reduce regulatory uncertainty for mining companies while potentially increasing federal revenue from expanded operations.
Federal Lands: Timber Production and Renewable Energy Fees
The legislation significantly increases timber harvesting requirements on federal lands. The Forest Service must sell an additional 250 million board-feet annually through 2034, while the Bureau of Land Management faces a 20 million board-feet annual increase. These requirements are subject to existing forest management plans, ensuring sustainable harvesting within established guidelines.
For renewable energy projects, the Act introduces new fee structures that will increase costs for wind and solar developments on federal land. Projects will pay acreage rent until production begins, followed by capacity fees equal to either the acreage rent or 3.9 percent of gross electricity sales proceeds, whichever is greater. Wind projects may qualify for a 10 percent reduction if at least 25 percent of the project area supports other activities.
The legislation establishes revenue sharing for renewable energy projects, with 25 percent of collected fees going to states and 25 percent to counties where projects are located. This provision should help build local support for renewable energy development while providing additional revenue streams for local governments.
Strategic Energy Infrastructure
The Act appropriates $389 million for Strategic Petroleum Reserve maintenance and petroleum acquisition, demonstrating continued commitment to national energy security. Additionally, $1 billion in loan guarantee authority supports energy infrastructure development, with eligibility expanded to include projects that enhance grid reliability and support critical minerals development.
The legislation also allocates $150 million for artificial intelligence initiatives within the Department of Energy, specifically targeting the development of AI models for scientific research and next-generation microelectronics. This investment reflects recognition of AI’s growing importance in energy innovation and national competitiveness.
Water Infrastructure Investment
Title V concludes with a substantial $1 billion appropriation for water infrastructure improvements through the Bureau of Reclamation. These funds will support construction and enhancement of existing water conveyance facilities and surface water storage capacity through 2034. Importantly, these investments require no matching funds or cost-sharing from local entities, representing direct federal investment in water security.
Broader Implications
The cumulative effect of Title V represents a significant shift toward increased domestic energy production and resource extraction. The legislation prioritizes energy security and economic development while maintaining environmental review processes under existing laws. For businesses in affected sectors, the Act provides greater regulatory certainty and expanded opportunities, though renewable energy developers will face increased costs on federal lands.
Local communities, particularly in western states, should see increased economic activity from expanded energy and mining operations, along with new revenue streams from renewable energy development. The legislation’s emphasis on domestic production aligns with broader energy independence goals while supporting job creation in traditional energy sectors.
As implementation proceeds, the success of these provisions will depend on agency execution and industry response to new opportunities and requirements. The Act’s comprehensive approach to energy and natural resources policy marks a clear departure from previous administration priorities, with implications that will unfold over the coming decade.
For more content, check out the following:
- Understanding Title I of the One Big Beautiful Bill Act: What These Agricultural and Nutrition Changes Mean for You
- Breaking Down the One Big Beautiful Bill Act: What Title II Means for Defense and National Security
- Breaking Down the One Big Beautiful Bill Act: Title III and Its Impact on Financial Oversight
- Breaking Down Title IV of the One Big Beautiful Bill Act: What It Means for Commerce, Science, and Transportation
