House Natural Resources looks to energy leasing to raise billions for reconciliation

Republicans are looking to expand oil and gas lease sales and speed permitting for energy projects.

May 01, 2025

The House Natural Resources Committee released its portion of Republicans’ reconciliation package Thursday night with a pledge that it would far exceed its $1 billion deficit reduction target by mandating more frequent oil and gas lease sales and speeding permit approvals for energy projects. 

The committee plans to mark up the bill Tuesday. Speaker Mike Johnson has urged lawmakers to move quickly to enact the GOP’s sprawling domestic policy legislation that is expected to include tax cuts, beefed-up border security and measures to back President Donald Trump’s pro-fossil fuel energy policy. 

Republican House leadership has tasked Chair Bruce Westerman’s Natural Resources committee — which has jurisdiction over energy production, minerals and mining, and fisheries and wildlife on federal lands — with finding $1 billion to help offset a tiny portion of the $4.5 trillion in tax cuts they plan to pass on a party-line basis through the budget reconciliation process. 

But committee aides said the Congressional Budget Office had projected their bill would overshoot that amount and achieve $15 billion in deficit reduction through expanding oil and gas lease sales on federal lands and waters — after the Biden administration had slowed such auctions — while rescinding some small pots of funding from the Inflation Reduction Act. It would also raise money by allowing certain energy and infrastructure projects to be permitted through a streamlined process if developers pay a fee to the federal government. 

“I feel confident we’re going to hit the $1 billion number with substantially more. That’s the main objective,” Westerman told POLITICO Thursday. 

Experts, however, have cast doubt on Republicans’ revenue expectations from expanding oil and gas leasing. The industry has slowed its spending, a trend that is expected to be exacerbated by the declines in oil prices from the recession fears triggered by Trump’s trade war. 

The bill would mandate additional oil and gas lease sales in the Western Gulf of Mexico and Alaska’s Cook Inlet, along with four auctions in Alaska’s Arctic National Wildlife Refuge, which Trump reopened for drilling on his first day in office. 

Republicans’ last reconciliation package, the 2017 Tax Cuts and Jobs Act, ordered two lease sales in the region, both of which attracted little interest. 

Republicans have blamed those tepid sales on restrictions imposed by the Biden administration. 

Industry experts, however, have cast doubt on the viability of the region given the high cost of developing infrastructure in the Arctic and the more attractive drilling prospects in the lower 48 states. 

The bill would also reduce royalty rates for oil and gas producers back to pre-Inflation Reduction Act levels, which Republicans say will drive increased drilling and bring in more cash to federal coffers. And it would undo several resource management plans issued by the Biden administration that restricted fossil fuel production and mining on some federal lands in favor of conservation. 

On renewable energy, the bill would increase geothermal lease sales while maintaining existing royalty rates. It also includes a modified version of a long-proposed bill from Rep. Paul Gosar (R-Ariz.) that would create a revenue-sharing system for renewables, with the proceeds going to states, counties and the federal government. 

Gosar’s version would have directed the federal funds to speed permitting for renewables and conservation projects, but that portion was not included due to limitations of the reconciliation process. Democrats dropped their support for Gosar’s bill in 2021 and have proposed their own version that includes those provisions. 

In addition to the revenue-raising provisions, the bill directs $2.5 billion in spending for Bureau of Reclamation water infrastructure and $230 million for the nation’s 250th anniversary celebrations, including $40 million for the “National Garden of Heroes” proposed by Trump. 

The Natural Resources provisions are expected to draw broad GOP support and are not among the big fights that other committees are expected to face over issues like cuts to Medicaid and the fate of clean energy tax credits from the Democrats’ 2022 climate law. 

But Democrats, who are not expected to vote for the reconciliation bill, are still promising to throw up roadblocks by offering politically sensitive amendments in markup. 

“If they are trying to tear apart our public lands and our natural resources and our environmental laws, then I’m going to take the fight to them,” said Rep. Jared Huffman (D-Calif.), the committee’s ranking member. 

The bill does not contain carve-outs from federal permitting for specific energy projects, as Westerman had previously mulled. And it does not offer sales of federal lands as a means to build more public housing, which drew bipartisan opposition.


By:  James Bikales, Josh Siegel
Source: Politico Pro