The recently signed One Big Beautiful Bill Act (OBBBA) marks a seismic shift in U.S. energy policy, with major implications for Oil and Gas investors. With new mandates for expanded leasing, reduced royalty rates, and accelerated permitting—especially across the Gulf of Mexico, Alaska, and western states—the legislation signals a clear federal pivot back to fossil fuels and energy independence. For investors working with Crown Exploration, these developments unlock significant new opportunities in domestic oil and gas projects backed by strong federal support and long-term revenue potential. Check out the full article below to learn more about this Oil and Gas news.
The signing of the One Big Beautiful Bill Act (OBBBA) into law on July 4 represented an enormous victory for President Donald Trump, and it has huge implications for the U.S. energy industry.
An extremely complex bill, it passed by razor thin margins in the U.S. House of Representatives and the Senate, with Vice President JD Vance casting the tie-breaking vote. While the bill addresses a host of policy areas, including tax, Medicaid and immigration and border security, it represents a major step in implementing the president’s energy dominance agenda.
Mirroring what U.S. and global markets have been projecting over the past several months, the bill refocuses policy away from climate, ESG and renewable energy, and toward energy reliability, dispatchability and security. Fossil energy, nuclear, geothermal and, to an extent, hydrogen, emerged as winners, while wind and solar took a hit.
Permitting
Some of the most consequential pieces of the bill are directed at oil and gas leasing and permitting, both onshore and offshore. For example, the bill directs the Bureau of Land Management (BLM) to hold quarterly lease sales across nine western states over 10 years, increases the onshore drilling term from three years to four years, and lowers the federal onshore royalty rate from 16.67% back to 12.5%.
Offshore, the Bureau of Offshore Energy Management (BOEM) must hold no fewer than two lease sales every year for 15 years in the central and western Gulf of America, requiring at least 80 million acres to be included in each lease sale. Additionally, the legislation restores the federal minimum offshore royalty rate to 12.5% and increases the amount of offshore revenue to be distributed to states and conservation programs.
The bill also allows for comingling of onshore and offshore production under certain conditions, and delays until 2035 the so-called methane fee included in the Inflation Reduction Act that imposes royalties on all methane extracted from onshore and offshore federal leases.
There are significant incentives for oil and gas activities in Alaska. For example, BOEM must hold six Cook Inlet lease sales over 10 years, while BLM is required to hold six lease sales over 10 years in the National Petroleum Reserve - Alaska and four lease sales over 10 years in the Arctic National Wildlife Refuge. Additionally, 50% of bonus, rental and royalty receipts paid to the federal government from the oil and gas program must be paid to the State of Alaska in fiscal years 2025 through 2033, increasing to 70% beginning fiscal year 2034.
In total, Congress anticipates increased onshore oil and gas leasing will produce an additional $11 billion in federal revenues over 10 years, while offshore leasing will produce an additional $5 billion. It is estimated that Alaska oil and gas leasing will add another $1 billion.
OBBBA also includes language to encourage federal coal leasing and to make more leasing tracts available. It also reduces the royalty rate for federal coal production from 12.5% to 7% through 2034 to boost coal production.
Tax policy
OBBBA changed the tax deduction benefits for intangible drilling costs, allowing companies to receive the benefits more quickly. It amends the tax credits created in the Inflation Reduction Act (IRA) by cutting and accelerating the phase-outs for “clean” energy sources, especially wind and solar, while providing exceptions for energy sources deemed to be more thermal and dispatchable, such as nuclear and geothermal.
The final OBBBA text also retained some benefits for biofuels and hydrogen, and it largely maintained incentives for carbon capture and storage (CCS). A credit was also added to encourage the mining of metallurgical coal, which is used for steelmaking and is often exported. Producers of metallurgical coal will receive a 2.5% tax break as part of the 45X advanced manufacturing production tax credit.
Regulatory reform
Language that would have accelerated project approvals for pipeline projects in exchange for a $10 million fee, and LNG export projects for a $1 million fee, was struck from the final package for not complying with Senate rules. Language in the final bill did establish accelerated NEPA reviews on projects that trigger NEPA reviews, in exchange for a fee of up to 125% of the project cost. Those developments underscore the need for additional permitting reform, which could take place through additional legislation later this year or next year.
OBBA also provides increased funding for the Strategic Petroleum Reserve (SPR), including $218 million for maintenance and repairs, and $171 million for the acquisition of new petroleum products.
Reaction
While the oil and gas industry’s reaction to OBBBA has been strongly supportive and favorable, renewable energy producers and proponents, and environmental NGOs have been understandably critical of the law and its implications for renewable energy.
Their concerns have been echoed by some economists and analysts in the financial community who have expressed concerns that the loss of tax incentives and project funding for renewable energy will reduce power generation and reliability at a time when demand for energy is soaring.
The Trump administration, however, believes that reduced regulation, greater access to resources and an improved investment climate are key to the U.S. meeting its energy dominance goals.
It is betting on natural gas, nuclear and geothermal energy sources to meet future demand. This represents, of course, an enormous challenge for the natural gas value chain. OBBBA creates a huge boom in gas demand to support AI, meet the needs of industrial-led electricity demand, fulfill obligations to global LNG markets, serve piped natural gas markets in Mexico and meet NGL needs in Asia.
Under current market dynamics defined by stagnant commodity prices and demand, constrained pipeline takeaway capacity in U.S. producing basins and shortfalls in gas turbine availability, the challenges to meeting this new surge in gas demand will be immense.
Time will tell if the industry can deliver.
Source: Belcher, Jack. “Belcher: How the Big Bill Impacts Oil and Gas.” Hart Energy, 18 July 2025, www.hartenergy.com/exclusives/belcher-how-big-bill-impacts-oil-and-gas-213587.
