OBBBA Oil and Gas Leasing Program

The One Big Beautiful Bill Act (OBBBA) requires BOEM to hold at least one offshore oil and gas lease sale by Dec. 15, 2025, and establishes a predictable schedule of sales through 2040. These congressionally mandated lease sales provide certainty for industry, support investment in offshore infrastructure, and advance the Administration’s goals of expanding domestic energy production and reducing reliance on foreign sources of oil. These sales will as serve as the backbone of America’s offshore energy portfolio for years to come by ensuring there is a predictable stream of the new exploration and drilling needed to facilitate future production.

National Energy Role

The Gulf of America supplies about 14 percent of U.S. crude oil production, making it a cornerstone of America’s energy security. Offshore production supports hundreds of thousands of jobs, contributes tens of billions of dollars to the GDP, and generates billions in federal and state revenues each year.

Regional Focus

• Gulf of America: A minimum of 30 lease sales between 2025 and 2040, ensuring continued investment in one of the nation’s most productive offshore basins.
• Cook Inlet, Alaska: A minimum of six lease sales through 2032 to support Alaskan communities, local jobs, and long-term energy resilience in the region.

In Fiscal Year 2024 alone, offshore leasing contributed more than $7 billion to the U.S. Treasury through bonuses, rentals, and royalties. These revenues are distributed through programs that deliver direct benefits nationwide:

• Revenue sharing program established by 43 U.S.C. §1331: Revenue distributed to Gulf Coast states.
• Land and Water Conservation Fund (LWCF): Conservation and recreation projects across the country.
• Historic Preservation Fund: Protection of cultural and historic resources.
• U.S. Treasury General Fund: Supporting federal operations that benefit all Americans.

This predictable lease sale schedule supports America’s energy independence while fueling state and federal budgets, supporting infrastructure and education, and driving economic growth in coastal communities. 

OBBBA = One Big Beautiful Bill Act 
BBG = Big Beautiful Gulf; BBC = Big Beautiful Cook Inlet

The One Big Beautiful Bill Act (OBBBA) directs BOEM to hold regular lease sales, mandates specific lease terms and conditions, and establishes minimum acreage requirements for leasing. These provisions ensure predictability for industry while safeguarding public resources and delivering fair return to taxpayers.

What does the OBBBA require?

• Mandated sales: A predictable schedule of 36 lease sales through 2040. This includes:
  • One Gulf of America lease sale in 2025, to be held by December 15, 2025.
  • Two Gulf of America lease sales each year from 2026 through 2039, to be held by March 15 and August 15 of each year, respectively.
  • One Gulf of America lease sale in 2040, to be held by March 15, 2040.
  • One Cook Inlet lease sale in years 2026, 2027, 2028, 2030, 2031, and 2032, to be held by March 15 of each year.
• Geographic scope: Gulf of America and Cook Inlet, Alaska.
• Terms and Conditions: For GOA sales, OBBBA requires adoption of the same lease terms and economic conditions applied to Lease Sale 254 (held March 18, 2020), with royalty and primary term exceptions noted below. For Cook Inlet sales, OBBBArequires adoption of the same lease terms and economic conditions used applied to Lease Sale 244 (held June 21, 2017).
• Royalty Rate: Directs the Secretary of the Interior to set royalty rates to 12 ½ percent.
• Primary term: Establishes a 10-year primary term for deepwater GOA leases.
• Sale size: Requires not fewer than 80 million acres be offered in the GOA and not fewer than 1 million acres be offered in the Cook Inlet.
• Revenue-sharing: OBBBA increases the  Gulf of Mexico Energy Security Act of 2006 (GOMESA, Pub. L. No. 109-432) revenue sharing “cap” from $500 million to $650 million beginning in fiscal year 2025 and continuing through 2034.

OBBBA Lease Sales at a Glance

• Gulf of America: At least 30 sales through 2040.
  • Hold one sale by December 15, 2025, and then hold a minimum of two lease sales each year through 2039, with one sale by March 15 and another sale by August 15 of each calendar year, and at least one sale by March 15, 2040.
• Cook Inlet, Alaska: At least six sales through 2032.
  • Hold at least one sale in each of the calendar years 2026 through 2028, and in each of the calendar years 2030 through 2032, by March 15 of the applicable calendar year.

What does the Bureau of Ocean Energy Management (BOEM) do?

BOEM is the agency within the Department of the Interior that manages the development of the U.S. Outer Continental Shelf (OCS) energy, mineral, and geological resources in an environmentally and economically responsible way. BOEM manages thousands of offshore oil and gas leases covering millions of acres, most of which are in the Gulf of America.  

Learn more about leasing statistics here.

What is the One Big Beautiful Bill Act (OBBBA)?

The OBBBA is a federal law that requires BOEM to hold a predictable schedule of offshore oil and gas lease sales through 2040. It coincides with the traditional five-year National OCS Program with a statutory framework that provides certainty for industry, ensures fair return to taxpayers, and supports America’s energy independence.

Where and when are OBBBA lease sales held?

• Gulf of America: At least 30 lease sales between 2025 and 2040. This region currently supplies about 14% of U.S. crude oil production.
• Cook Inlet, Alaska: Six lease sales through 2032 to support local jobs, communities, and energy resilience.

Each sale is announced with a Final Notice of Sale (FNOS) published at least 30 days in advance.

How much oil and gas does the Gulf of America hold?

Based on BOEM’s 2021 Assessment of Undiscovered Oil and Gas Resources, the Gulf of America OCS is estimated to contain nearly 30 billion barrels of undiscovered, technically recoverable oil and over 50 trillion cubic feet of natural gas. These resources make it one of the most significant offshore energy basins in the world.

How much oil and gas does the Cook Inlet in Alaska hold?

Based on BOEM’s 2021 Assessment of Undiscovered Oil and Gas Resources, the Cook Inlet Planning Area in the Alaska OCS is estimated to contain 1.04 billion barrels of undiscovered, technically recoverable oil and 1.18 trillion cubic feet of natural gas. The Cook Inlet is one of the most active areas on the Alaska OCS for oil and gas exploration.  

What happens after a company acquires a lease?

Holding a lease does not authorize drilling. A company must first submit detailed plans for exploration or development, which BOEM reviews for technical and environmental considerations. The Bureau of Safety and Environmental Enforcement (BSEE) regulates operations and conducts regular safety and environmental inspections before and during production.

How long does an offshore oil and gas lease last?

By law, leases are issued for a primary term of 5 to 10 years, depending on water depth and conditions. To extend beyond that term, a company must be actively exploring or producing. Once in production, a lease may remain active for decades—often 40 to 70 years—provided it continues producing in paying quantities and meets all requirements.

Where does the money go from lease sales?

Offshore leasing generates billions of dollars each year through bonuses, rentals, and royalties. Revenues are distributed to:

• U.S. Treasury General Fund (benefits all taxpayers)
• Revenue sharing program established by 43 U.S.C. §1331 (funds for Gulf states and coastal communities)
• Land and Water Conservation Fund (nationwide conservation and recreation projects)
• Historic Preservation Fund (cultural and historic resource protection)

Do Gulf states benefit directly from offshore development?

Yes. Since 2009, billions of dollars in energy revenues have been shared with Alabama, Louisiana, Mississippi, Texas, and their coastal political subdivisions. These funds support coastal protection, restoration, and infrastructure projects.

Why is industry interested in OBBBA sales?

The Gulf of America remains attractive due to its:

• Resource potential (large oil and gas reserves)
• Established infrastructure (pipelines, refineries, and ports)
• Proximity to markets (meeting both regional and national demand)

These factors ensure ongoing interest, though participation may vary with market conditions and energy prices.

What does “Barrels of Oil Equivalent (BOE)” mean?

BOE is a standard unit that expresses the energy content of different hydrocarbons in terms of crude oil. One BOE equals the energy in one barrel of oil (42 gallons). Typically, 5,620 cubic feet of natural gas is considered equivalent to one BOE, allowing oil and gas volumes to be compared on the same basis.