Both the variety of our energy sources and the historical changes to how we make, move, and use energy have resulted in a fragmented and overlapping patchwork of federal, state, and local laws. The governing regimes are often complex and can depend on a variety of factors, including the energy source involved, where and how it is produced, how it is transported, the end-use, and how it affects the environment.
Federal and state energy policies are also increasingly dynamic and hotly contested.
In some instances, the same types of laws will apply to many different energy projects regardless of source. For example, public input, interagency consultation, and multiple studies and reports are common requirements for all projects. Some laws, however, are technology-specific or location- or impact-dependent. The suite of agencies that may be involved in a single decision or project can be substantial, but not always consistent from project to project. Decisionmaking may rest with federal entities, state PUCs, one or more state executive agencies, and/or county commissions and municipal zoning authorities.
For more detail on the energy project lifecycle, from financing and siting to operations and decommissioning, across different technologies and resources, see [Legal Processes and Frameworks].
A. Fossil Energy
Fossil fuels get their name from their ancient lineage—they are derived from plant or animal matter buried millions of years ago. Over time, these materials were subjected to intense heat and pressure underground that transformed them into energy-dense fuels like coal, oil, and natural gas.
They are extracted in their raw form by mining or drilling, usually require subsequent refining, and mostly are burned to release their stored energy.
Fossil fuel combustion also releases GHGs such as CO2, which trap heat in the atmosphere, raising global temperatures and causing climate change (see [What is Causing Climate Change?]).
Carbon capture and storage (CCS) technologies may eventually provide one method for capturing those emissions and sequestering them in long-term storage underground, although their effectiveness depends on capture rates and preventing leakage.
As fossil fuels became central to America’s energy use in the latter half of the 19th century, federal energy regulation began with antitrust laws to limit the monopoly power of oil and other industry interests.
While the federal government focused on punishing abuses of power by that age’s “robber barons,” it left regulation of production (e.g., of coal mines and oil wells) to the states.
When petroleum, natural gas, and electricity gained traction and increasingly crossed state lines, the U.S. Congress began to get involved and asserted greater federal authority over the energy system, including by enacting the Mineral Leasing Act (1920), Public Utility Act (1935), and Natural Gas Act (1938). Energy conservation laws enacted in the 1970s added another dimension of governance.
Today, the regulatory structures governing extraction, production, transportation, and sale of fossil fuels can vary greatly depending on the type of fuel, location and size of the project, and anticipated impacts, among other factors. For example, drilling for oil and gas or mining coal on federal land, constructing an interstate natural gas pipeline, and operating a fossil-fuel power plant all implicate different laws and agencies.
This is a fast-moving area of law and numerous issues related to fossil fuels remain in flux, including major federal regulations as well as state and local policies that seek to restrict or enhance fossil fuel extraction or otherwise affect energy companies and the public. National Environmental Policy Act (NEPA) lawsuits are also common, and have included discussions about the scope of agency requirements to consider the climate impacts of a proposed action.
Land Acquisition
Before a developer can extract coal, oil, or natural gas, it must acquire or lease the property, or at least the rights to the subsurface.
Most extraction happens on private land, meaning extraction-related land disputes are likely to feature property and contract law issues. However, roughly 40% of coal, 25% of oil, and slightly more than 10% of natural gas production happens on federal land.
Decisions to withdraw or open certain federal lands from exploration have led to legal challenges.
The federal land leases to extract coal, oil, and natural gas are administered by the U.S. Department of the Interior’s (DOI’s) Bureau of Land Management (BLM) and are awarded to the highest bidder at auction. Leaseholders then pay rent and royalties to the federal government at rates set by statute.
State agencies follow similar procedures when issuing leases to extract on state public land.
Leases for oil and gas drilling in offshore federal waters are similar, but are administered by another agency within DOI, the Marine Minerals Administration (MMA).
These leases are for use of the seafloor, not the entire water column, meaning that any energy project within a leased area must not interfere with other uses, such as navigation, fishing, or military operations.
Leasing and drilling in state waters (within three miles of the shore) is administered by state agencies.
Coal Extraction
Historically, coal was mined underground, where miners would descend into deep shafts to access mineral seams. While that method endures, today the majority (63%) of U.S. coal comes from surface mines (sometimes called strip mines), where land is scraped or blasted away to reveal coal deposits underneath. Three-quarters of all U.S. coal production occurs in five states—Wyoming, West Virginia, Pennsylvania, Illinois, and Montana.
Broadly, surface mines are governed by the federal Surface Mining Control and Reclamation Act, which is implemented and enforced by the Office of Surface Mining Reclamation and Enforcement, establishes standards for environmental protection, and institutes a bond requirement for post-mining cleanup. Surface mines can also impact nearby waterways and require Clean Water Act (CWA) permits.
Oil and Gas Extraction
Oil comes mostly from land-based wells located in Texas (42% in 2025) and New Mexico (16.5%). Oil drilling also happens offshore, primarily off the Gulf Coast. Natural gas extraction in Texas, Pennsylvania, and Louisiana accounts for more than 60% of the nation’s gas production, with a very small portion (~2%) coming from offshore sources.
For oil and gas wells on federal lands, BLM must ensure that drilling activities are consistent with multiple-use and sustained-yield principles embedded in the Federal Land Policy and Management Act (FLPMA); and any drilling-related approvals must also comply with federal environmental review, wildlife, historical preservation, and water protection laws.
For drilling on state lands, state legal frameworks vary significantly, including with respect to both agency authority and substantive requirements related to setbacks, financial assurances, baseline water testing, and local government control.
Notably, fracking is exempt from most federal permitting requirements, though some states and municipalities regulate fracking through bans, moratoria, or other restrictions to reduce drilling.
Litigation about extraction has raised questions about the impacts on affected communities,
whether extraction is consistent with federal land management statutes,
and the process and adequacy of disposal, cleanup, and remediation,
among other issues.
Moving Fuels From Extraction to Use
Fossil fuels typically must be moved to be useful—usually by rail for coal and by pipeline for oil and gas.
Railroads transport nearly three-quarters of all coal
and a relatively small amount of petroleum products. Freight rail is overseen at the federal level by the U.S. Surface Transportation Board (STB),
while safety standards are administered by the Federal Railroad Administration (FRA).
Pipeline developers must secure rights-of-way from private landowners, and interstate pipelines must also obtain approval from FERC.
FERC also regulates offshore pipelines under the Outer Continental Shelf Lands Act (OCSLA), as well as liquefied natural gas (LNG) terminals that are used for export.
Intrastate pipelines fall under state jurisdiction, often a PUC. For pipelines wholly on tribal lands, tribal codes or ordinances and federal regulations (such as NEPA or the Indian Mineral Leasing Act) apply.
End-Uses
After extraction and transport, most fossil fuels are burned to create electricity, heat homes, or power vehicles (see Box 2).