On March 4, the Bureau of Land Management (BLM), under the Department of the Interior (DOI), held an auction for oil and gas leases on federal land in Wyoming. The sale offered four parcels totaling 2,443 acres—all of which were leased. This was the third federal onshore lease sale of 2025, following lease sales in New Mexico and Montana and North Dakota, where all available leases were also sold.

The average bid in today’s sale—$2,745/acre—is more than 17 times higher than the average bid for Wyoming lease sales between 2010 and 2020, before fiscal policies were updated. It is also the highest for a single sale in Wyoming in over a decade.

While still lower than bids in high-producing oil and gas states like New Mexico (roughly $21,500/acre average bid in 2024) and North Dakota (roughly $3,960/acre average bid in 2024), the dramatic increase demonstrates how recent reforms to the federal onshore leasing program help ensure American taxpayers receive a fair return on the oil and gas resources we all own.

The critical reforms, first passed in 2022, have helped modernize oil and gas development by ensuring companies pay competitive market rates and reducing financial risks for taxpayers. These changes include:

• Higher royalty rates: Increased to 16.67% from 12.5%, still lower than rates charged by states like Texas.
• Updated rental rates: $3/acre for the first two years, $5/acre for years 3-8, and no less than $15/acre for years 9-10 (up from outdated 1987 rates set under President Reagan at $1.50/acre for years 1-5 and $2/acre for years 6-9).
• Increased minimum bids: Raised to $10/acre from $2/acre set in 1987.

• Modernized bonding requirements: Updated bonding rates, adjusted for the first time since the 1950s and 1960s to better reflect market conditions and protect taxpayers from costly cleanup liabilities.
• More strategic leasing: Focusing on appropriate locations makes auctions more competitive and ensures oil and gas production benefits taxpayers.

A recent TCS analysis of federal onshore lease sales in 2024 shows a strong fiscal case for maintaining critical updates to the onshore oil and gas leasing program. Last year, lease sales across all states averaged $2,149/acre, generating more than $164 million at auction. These high bids underscore how recent reforms have strengthened the leasing process, leading to higher returns for federal and state taxpayers. Since half of all federal leasing revenue is shared with the state where leasing occurs, these reforms directly benefit state budgets.

Wyoming has ranked as the top federal natural gas producer and the second-largest federal oil producer over the last decade. The state also accounts for nearly one-third of all federal acreage leased for oil and gas development. However, despite leading in new acreage leased over the past two years, Wyoming has generated a much smaller share of total bid revenue. Average bids in the state were $245/acre in 2023 and $483/acre in 2024—the highest in Wyoming since 2017 but still significantly lower than other top-producing states like New Mexico and North Dakota. In 2024, 30% of acres leased in Wyoming sold for just $10/acre, the legal minimum bid.

Prior to the changes enacted by Congress in 2022, taxpayers lost billions in potential revenue due to below-market royalty rates, particularly in states with significant oil and gas production like Wyoming. If the current royalty rate of 16.7%—instead of the outdated rate of 12.5%—had been applied to oil and gas production on federal lands in Wyoming from FY2013 to FY2022, taxpayers would have received an additional $2.4 billion in revenue.

Taxpayers have also faced substantial liabilities from under-bonded wells on federal land. Companies leasing federal lands must post a bond to cover land reclamation after production ends. However, outdated bonding requirements failed to account for rising cleanup costs, leaving taxpayers exposed to an estimated $88 million in potential liabilities from producible wells in Wyoming at the end of FY2022.

Updated leasing policies are essential to ensuring fiscal accountability and protecting taxpayer dollars by appropriately valuing America’s natural resources. Focusing leasing efforts on locations with higher development potential reduces speculative leasing and minimizes the idle acreage held by oil and gas interests, yielding greater returns for taxpayers. Smart leasing practices can support domestic energy production, raise important revenue for taxpayers, and protect us from future costs.