MRP 195: Will the Lower Energy Costs Act Benefit Mineral Owners

In this episode of the Mineral Rights Podcast, we discuss H.R. 1, the “Lower Energy Costs Act”, proposed legislation by the Republican majority in Congress that aims to reduce energy costs and promote the development of energy resources in the US. We highlight some of the most impactful bills included in the Act and how they could affect mineral rights and royalty owners.

Note: Since this episode was recorded, the House passed H.R. 1, but experts indicate that it is unlikely to pass a vote in the Senate. We’ll monitor the developments as to what legislation might be the focus of negotiations in the Senate and will keep you posted!

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Background

The Lower Energy Costs Act includes bills covering energy and commerce, natural resources, and transportation and infrastructure. The bills aim to streamline the environmental analysis and permitting process, hold more regular lease sales at the federal level, and ensure transparency and accountability in energy development on federal lands.

We highlight the importance of having a domestic supply of critical minerals, especially those used in electrification and battery storage. This is important because of the well documented human rights and environmental issues associated with sourcing these minerals from countries like China and Africa, where child labor and unsafe working conditions are prevalent.

Impact on Mineral Rights and Royalty Owners

The Lower Energy Costs Act has several bills that could affect mineral rights and royalty owners. The Protecting American Energy Production Act (H.R. 1121) gives states primacy in regulating hydraulic fracturing for oil and natural gas production on state and private lands. It also prohibits the president from declaring a moratorium on hydraulic fracturing unless authorized by an act of Congress.

The Transparency, Accountability, Permitting, and Production of American Energy Act of 2023 (H.R. 1355) is the most impactful bill for mineral rights and royalty owners. It overhauls the environmental permitting process and leasing on federal lands, restarting onshore and offshore oil, gas, and coal leasing. It would also ensure transparency in energy development on federal lands.

We emphasize the importance of stability and consistency in oil and gas regulations, allowing operators to work within a regulatory framework that is not changing every few years. A case can be made that the boom in the responsible development of natural resources in the US is largely due to private mineral ownership, and that without it, the US would not have the same level of energy independence.

Industry and Environmentalist Response

Industry groups, such as the American Petroleum Institute, support the Lower Energy Costs Act, while environmental groups, such as The Wilderness Society, oppose it. The bill has yet to pass through Congress, and there is still much horse trading to be done, but We are hopeful that some version of it will pass with bipartisan support.

Conclusion

The Lower Energy Costs Act aims to promote the development of energy resources in the US, reduce energy costs, and ensure environmental protection. Its impact on mineral rights and royalty owners will depend on the bills that ultimately pass through Congress. We encourage listeners to follow the progress of this proposed legislation and its potential impact on the energy industry, mineral rights owners, and the US economy.

Resources Mentioned in This Episode

• MRP 77: How a Fracking Ban on Federal Lands Could Affect Mineral Owners
• MRP 89: State and Federal Mineral Rights
• Information on H.R. 1 – Speaker of the House Website
• Summary of H.R. 1, the Lower Energy Costs Act
• Coalition of 25 oil and natural gas trade associations support the Lower Energy Costs Act
• H.R. 1121, the Protecting American Energy Production Act (Rep. Jeff Duncan (R-SC))
• H.R. 1355, Transparency Accountability, Permitting, and Production of (TAPP) American Energy Act of 2023 (Rep. Bruce Westerman (R-AR) – includes the following bills:
  • H.R. , Building United States Infrastructure through Limited Delays and Efficient Reviews (BUILDER) Act of 2023 (Rep. Garret Graves (R-LA))
  • H.R. 209, Permitting for Mining Needs Act (Rep. Pete Stauber (R-MN))
  • H.R. 356, Unleashing American Energy Act (Rep. Jerry Carl (R-AL))
  • H.R. 1042, Restore Onshore Energy Production Act (Rep. Matt Rosendale (R-MT))
  • H.R. 1430, Determination of NEPA Adequacy Streamlining Act (Rep. David Valadao (R-CA))
  • H.R. 1067, American Energy Act (Rep. Lauren Boebert (R-CO))
  • H.R. 1457, COAL Act (Rep. Harriet Hageman (R-WY))

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