The U.S. Department of the Interior is moving to modernize federal oil and gas regulations by proposing updates that could streamline operations on public lands and save the industry billions. But while the move is being welcomed by industry advocates, it’s drawing concern from environmental and tribal voices who warn that increased flexibility could weaken accountability.

The proposal would update Bureau of Land Management (BLM) rules around commingling—the process of combining production from multiple leases using a single well pad. Right now, this practice is restricted to leases with identical ownership structures, royalty rates, and revenue-sharing agreements. The new rule would ease those restrictions, even when lease conditions differ.

“This is about common sense and catching up with today’s technology,” said Interior Secretary Doug Burgum. “The current rules were written for a different era. These updates will help us manage public resources more efficiently, support responsible energy production, and make sure taxpayers and tribes get every dollar they’re owed.”

The Interior Department says the proposed changes would reduce environmental impact by minimizing the need for duplicative infrastructure and surface disturbance. At the same time, advanced metering and measurement systems now allow operators to accurately track production from individual leases and ensure that royalties are fairly allocated.

If implemented, the new regulations could yield up to $1.8 billion in annual industry savings, according to the Department. Officials argue that the savings could be reinvested into new energy development and infrastructure upgrades.

But critics warn that the proposed flexibility might come at a cost to oversight and transparency. Environmental groups and some tribal representatives have expressed concern that expanded commingling, especially when leases differ in ownership or royalty terms, could obscure how much oil or gas is being extracted from specific parcels—and whether mineral rights holders are being properly compensated.

While the Interior Department says modern tracking systems can prevent such issues, watchdogs argue that less stringent regulatory requirements may make it harder for the public and third parties to verify production volumes and royalty payments.

The proposal aligns with broader Trump administration priorities to reduce regulatory barriers and encourage energy production on public lands. A formal rulemaking process under 43 CFR Subpart 3173 will follow, including an opportunity for public comment where these concerns are likely to feature prominently.