Oil and gas drilling permit fees extended to 2037 under new "License to Drill Act"

A law signed by the president on October 20, 2026 extends the federal government's authority to charge oil and gas companies a fee each time they apply for a permit to drill on federal land. The measure, titled the License to Drill Act, became Public Law 119-134.

The law amends the Mineral Leasing Act to extend, through fiscal year 2037, the Bureau of Land Management's authority to collect a processing fee for each new application for a permit to drill — known as an APD. Under prior law, that authority was set to expire at the end of fiscal year 2026. The fee, indexed to inflation, was $12,850 per application in fiscal year 2026.

The money goes into the BLM Permit Processing Improvement Fund. When a company wants to drill on a federal oil and gas lease, it must first file an APD and the BLM reviews it for compliance with laws such as the National Environmental Policy Act, the Endangered Species Act, and the National Historic Preservation Act, typically including an on-site inspection. The fund, first created under the Energy Policy Act of 2005, pays mostly for the labor of the field staff who process those applications, with the aim of clearing backlogs and speeding approvals. Since 2020, all of the fee revenue has gone to the fund. The new law directs that all fees collected for fiscal years 2027 through 2037 go to the fund.

The bill was introduced in March 2026 by Representative Mike Kennedy, a Republican of Utah, and was handled by the House Committee on Natural Resources, which reported it favorably without amendment. On the House floor, Kennedy said the bill "ensures the Federal Government has the operational resources to process energy permits efficiently without unnecessary delay," and argued that its industry-funded fee model means "energy companies foot the bill for the administrative costs of these reviews" at no cost to taxpayers. Representative Bruce Westerman of Arkansas, the committee chairman, said reauthorizing the fees "will help ensure that BLM has the resources necessary to process the permits."

The bill drew support from both parties as it moved through Congress. Representative Melanie Stansbury of New Mexico, a Democrat, rose in support on the House floor, calling it "a commonsense permitting program" and warning that letting the authority lapse "would have serious consequences for staffing and permitting efficiency." The House passed the bill by voice vote on June 2, 2026, and the Senate passed it by unanimous consent on September 30, 2026 — the day the existing fee authority was set to expire. Senator Mike Lee of Utah, who managed the bill on the Senate floor, said the fees "help fund the people and resources that process those permits" and that the law extends the authority "through fiscal year 2037."

Outside groups also weighed in during committee consideration. The American Petroleum Institute and the Independent Petroleum Association of America, which represent oil and gas producers, submitted statements supporting the bill and the user-funded fee model. The Wilderness Society, a conservation group, also told the subcommittee it supported the bill, saying the fund provides dedicated money for permitting staff and "requires the oil and gas industry to foot the bill."

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