Interior Secretary Doug Burgum on Friday will update a Biden-era federal rule regarding energy development as a major cost-saving measure to private firms, one day after taking a visit to a liquefied natural gas (LNG) export facility on the Gulf Coast.
A source familiar with the workings of the rule said it essentially will ‘massively deregulate’ a rule passed between the two Trump administrations and should further bolster Gulf Coast oil and gas production by providing lower startup costs for energy firms.
The rule outlines criteria that producers and grantholders must provide as financial assurance, with a 2024 Bureau of Ocean Energy Management (BOEM) estimate that $6.9 billion in new supplemental assurance would be required to protect against oil lessees’ default.
The Interior Department said that $6.9 billion added up to the $665 million in estimated additional insurance premiums for energy companies, which stifled how much they could spend to expand their operations and pursue what President Donald Trump has called ‘American energy dominance.’
Burgum told Fox News Digital that the rule revision will ‘enable our nation’s energy producers to redirect their capital toward future leasing, exploration, and production all while financially protecting the American taxpayer.
‘Cutting red tape will level the playing field and allow American companies to make investments that strengthen domestic energy security and benefit Gulf of America states and their communities,’ he said.
BOEM will continue to require lessees on the outer continental shelf to provide financial assurances, while the Trump administration writ large works toward more balanced regulations, the department said in an exclusive statement.
During Burgum’s visit to the Gulf, he met with energy workers at the LNG facility and discussed how the department under his leadership wants to better support the industry.
The Gulf of America currently produces approximately 1.8 million barrels of crude oil daily and 2 billion cubic feet of natural gas per day.