The One Big Beautiful Bill Act (OBBBA) was passed and signed into law on July 4, 2025. This is an extremely large and complicated law which combines a number of Trump administration priorities into one piece of legislation. While we do not intend to cover every aspect or line item of this legislation, we are providing a summary of a few key aspects of the legislation for our clients as it relates to taxes, investments and the wider economy.
Our focus here will be the provisions included in the legislation related to the Energy sector of our economy. The OBBBA reorients US energy policy by increasing rules to ease permitting, support traditional oil and gas energy investments, and to reverse a number of provisions that were passed under the Inflation Reduction Act (IRA) in 2022. We’ve compiled this information utilizing an analysis performed by Holland & Knight, LLP. Please see a summary of the OBBBA below relating to energy policy.
- Increases validity of drilling permits issued by BLM to four years and amends Mineral Leasing Act to allow for public leasing of all eligible public lands
- Commingling or pooling of production from multiple leases to ensure appropriate allocation of royalty obligation of the various lessees.
- Adjusts rents and fees for wind and solar projects on public lands.
- Requires renewable energy revenue share with states – 25% of rentals, fees and charges to be paid from US Treasury to state where the project is located and another 25% to the counties where revenue was generated.
- Required Lease Sales
- Requires minimum oil and gas lease sales on public lands and offshore waters
- Requires quarterly oil and gas lease sales on public lands. Requires US Department of the Interior’s Bureau of Land Management (BLM) to hold quarterly sales in nine Western states (including Alaska), including requiring BLM to offer not less than 50% of available parcels nominated by the industry for development.
- Minimum lease sales in Gulf of America annually
- Requires at least 6 lease sales in Cook Inlet Planning Area in Alaska
- Requires at least 4 lease sales in Coastal Plain Oil and Gas Leasing program; directs 50% of proceeds to be paid to state of Alaska for 2025-2033, and 70% beginning in 2034.
- Restores coal leasing activities conducted prior to Biden administration, reduces royalty rate to 7% (from 12.5%) and requires Secretary of Interior to make at least 4 million acres available within 90 days
- Requires US Forest Service to sell minimum amounts of timber and set minimum number of long-term contracts
- Amends Gulf of Mexico Energy Security Act of 2006 (GOMESA) to increase distribution from lease sales to coastal states that is used for conservation and coastal restoration projects.
- $150 million for events and celebrations in observance of the 250th anniversary held on public lands
- Strategic Petroleum Reserve (SPR) – appropriates $28 million for maintenance and $171 million for acquisition of petroleum products for storage in SPR
- Amends Department of Energy Loan program to fund traditional energy projects and critical mineral projects that advanced American energy dominance and appropriates $1 billion to revised program
- Data ready for AI – $150 million for DOE and US Industry to curate and ensure DOE’s scientific data is suitable for use by AI
- Restoration and Increased Capacity for Existing Water Conveyance and Storage facilities – $1 billion appropriated for construction and related activities
- EPA Methane emissions fee paused for 10 years.
- Limits decision timeframes for Environmental Impact Statements (EIS) and Environmental Assessments (EA)
- NEPA Update – creates optional permitting fee mechanism
- Repeals CAFE standards penalty
- IRA Revisions
- Repeals minimum royalty provisions
- Reinstates frequency of oil and gas leases on public lands and waters held prior to the Biden administration
- Reinstates BLM’s authority to issue noncompetitive leases, reverting to “first come, first serve” system
- Restores royalty rate of 12.5% reversing the higher 16.67% under the IRA
- Repeals requirement for methane royalties paid on methane extracted from federal onshore and offshore oil and gas leases
- Repeals and rescinds unobligated funds from following IRA progams
- remaining funds for National Park Service and BLM
- several IRA loan authorities and credit subsidy; replaces these with Energy Dominance Financing authority capitalized with $1 billion to focus on traditional energy and include projects that improve grid reliability or increase capacity and output
- funding from EPA IRA clean energy and vehicles programs
- funding from White House IRA clean energy and vehicles program
- funding from FHWA IRA clean transportation and vehicles program
- funds intended to create new policies and for old-growth forests, establish new grants for climate projects and support urban tree planting
- State-Based Home Efficiency Contractor Training Grants
- Funding for Dept of Energy Loan Office
- Energy infrastructure reinvestment financing issued by Loan Program Office
- Tribal energy loan guarantee program
- Transmission facility financing
- Grants to facilitate the siting of interstate electricity transmission lines
- Interregional and offshore wind electricity transmission planning, modeling, and analysis
- Advanced industrial facilities deployment program