The federal government just approved more drilling permits in 2025 than in any year over the past 15 years. If you're an oil and gas operator with projects on federal lands, the permitting landscape looks nothing like it did 12 months ago. The Interior Department's emergency permitting procedures have compressed what used to be a multi-year approval process into as few as 28 days. Combined with EPA's extended methane compliance deadlines and FERC's rate certainty through mid-2026, operators have a window. The question isn't whether to move, it's how fast you can.
But there's a catch. Steel and equipment tariffs could push your 2026 capital costs up 4 to 40 percent. And state-level regulations haven't gone away. Here's what you need to know to plan your year.
What Changed: The Permitting Revolution
On April 23, 2025, the Department of Interior implemented emergency permitting procedures under the national energy emergency declared by Executive Order. The numbers tell the story:
Drilling Permits: BLM approved 4,595 new oil and gas permits between January 20 and December 31, 2025. That's 56% more than the Biden administration approved during the same period, and the highest total for any fiscal year in 15 years.
Processing Time: The emergency procedures reduced permitting from years to 28 days at most. This isn't just faster bureaucracy. It's a fundamentally different process, built on permit-by-rule authority and streamlined NEPA review.
Lease Sales: Interior held 16 lease sales in 2025, generating over $187 million from 206 parcels covering 165,681 acres across 10 states.
The Unleashing American Energy executive order also eliminated environmental impact statement requirements for approximately 3,224 oil and gas leases across 3.5 million acres in Western states.
Alaska Opens Up
The administration reopened 82% of the National Petroleum Reserve in Alaska for leasing and reinstated the full 1.56 million-acre Coastal Plain of the Arctic National Wildlife Refuge for oil and gas development. If you've had Alaska ambitions on hold, the legal landscape has shifted.
EPA's Methane Delay: Two More Years of Runway
While permitting accelerated, compliance timelines extended. In July 2025, EPA finalized rule extensions for the OOOOb/c methane regulations:
- Leak detection requirements: Pushed to 2027
- Control device mandates: Pushed to 2027
- Super-Emitter Program: Implementation delayed to 2027
The Waste Emissions Charge, which would have imposed $1,500 per metric ton of methane emissions in 2026, was repealed by Congressional Review Act. It can't be reimposed until 2034.
What This Means for Your Budget
You now have additional runway before major equipment upgrades are mandatory at the federal level. Operators who budgeted for 2025 or 2026 compliance spending can reallocate that capital, at least for federal requirements.
A word of caution: state implementation plans for OOOOc were also extended, with submissions now due to EPA by January 22, 2027. However, some states, particularly in the Intermountain West, may maintain stricter timelines than the federal baseline or move forward with original schedules. Check your state environmental agency before revising compliance schedules.
FERC's December Orders: Rate Certainty and Pipeline Approvals
FERC's December 18, 2025, meeting delivered two things operators care about: rate predictability and project approvals.
Oil Pipeline Rates: The Commission confirmed the rate index established in December 2020 stays in effect through June 30, 2026. Shippers who sought refunds for the March 2022 through September 2024 period lost their bid. The Commission denied those petitions, though it allowed pipelines to recover applicable rate differences for that locked-in period.
Natural Gas Pipeline Approvals:
- Mountain Valley Pipeline received approval to amend its certificate, reducing the route from 75 miles to 31.3 miles with a 30-inch diameter in Virginia and North Carolina
- Golden Pass LNG Terminal secured approval for a 0.22-mile, 42-inch supply lateral in Sabine Pass, Texas
- Draft presidential permits were sent for Texas Pipeline Exports facilities at the U.S.-Mexico border
LNG Export Capacity Surge
The U.S. is adding 5 billion cubic feet per day in LNG export capacity in 2025 and 2026. EIA projects total exports will reach 16 Bcf/d in 2026, up from 12 Bcf/d in 2024. Plaquemines LNG and Corpus Christi Stage 3 are the major additions.
For upstream producers, this means sustained natural gas demand well into the decade. For midstream operators, Gulf Coast positioning matters more than ever.
The Tariff Risk You Can't Ignore
Here's where the story gets complicated. Deloitte's 2026 outlook projects that material and service costs could increase 4 to 40 percent due to tariffs on steel, aluminum, and imported equipment.
Nearly 70% of U.S. oil and gas companies plan to restructure portfolios and divest non-core assets this year. That's not pessimism. It's adaptation. Offshore greenfield projects exceeding $50 billion may get pushed to late 2026 or beyond as operators wait for cost clarity.
Deal Terms Impact
If you're in active negotiations for equipment procurement, joint ventures, or asset acquisitions, expect counterparties to push for:
- Tariff escalation clauses in long-term equipment contracts
- Force majeure definitions that include trade policy changes
- Price adjustment mechanisms tied to steel indices
- Domestic content requirements in partnership terms
The operators who lock in equipment pricing early will have a meaningful advantage. Those who wait may find 2026 budgets strained by factors entirely outside operational control.
MD/DC Regional Considerations
Maryland maintains its hydraulic fracturing ban, limiting in-state exploration. For operators in the DC/MD region, the federal permitting changes are most relevant to:
- Cove Point LNG: Maryland's sole LNG export facility, which benefits from the broader export capacity expansion
- Supply chain and procurement companies: Faster federal permitting means more project activity, driving demand for regional services and manufacturing
- Downstream and midstream operations: Mountain Valley Pipeline's Virginia terminus improves regional natural gas supply dynamics
State-level air quality regulations remain in effect for any downstream facilities. The EPA compliance extensions apply to federal requirements, not state environmental agency rules.
Practical Takeaways
Resubmit pending federal permit applications under the new 28-day emergency procedures. The processing queue has cleared significantly.
Revisit your 2026 methane compliance budget. With federal deadlines pushed to 2027, you may have capital to redeploy, but verify your state agency's timeline first.
Lock in equipment contracts now. Tariff escalation could add 4-40% to steel and equipment costs by mid-2026.
Add tariff escalation clauses to any equipment procurement or JV agreements currently in negotiation.
Monitor your state's OOOOc timeline. While federal state plan submissions were extended to January 2027, some states may maintain original compliance schedules. Check with your state environmental agency.
Review Alaska project economics. With ANWR and NPR-A fully reopened, previously shelved projects deserve fresh analysis.
Assess LNG export demand impact on your natural gas production strategy. An additional 5 Bcf/d of takeaway capacity creates sustained demand.
Update your board materials with the changed regulatory landscape. Directors who last reviewed oil and gas policy in 2024 are working with outdated assumptions.
Watchlist
EPA methane rule reconsideration: Agency indicated it's reconsidering Section 111 regulations. Final action expected Q1 2026.
FERC oil pipeline rate index review: Mid-year 2026 review could adjust rate ceilings.
State implementation of OOOOc: Federal deadline extended to January 2027, but individual states may adopt stricter timelines.
Steel and aluminum tariff escalation: Additional trade actions could push equipment costs higher than current projections.
Congressional action on IRA provisions: Energy-related tax provisions remain targets in reconciliation discussions.
The Path Forward
2025 delivered the fastest federal permitting environment in years. 2026 offers the opportunity to capitalize on that speed, if you move before tariff pressures and eventual regulatory recalibration close the window. The operators who align their project timelines with this reality will be positioned differently than those who don't.
The path forward is open. The question is execution.