“For many outside our world, this change may sound like a procedural footnote,” says Adam Ferrari, CEO of Phoenix Energy. “But for those of us inside it — engineers, operators, landowners — it represents a decisive shift in how we manage resources, risk, and returns.”

As a chemical engineer and founder of an energy company operating across the western U.S., Ferrari sees this as a commonsense update that supports energy efficiency reform without compromising accountability or oversight. “If implemented with care, this change could enhance environmental stewardship and operational integrity while saving the industry an estimated $1.8 billion annually,” he claims.

What is commingling — and why now?

At its core, commingling is the practice of producing hydrocarbons from different leases or formations through a single wellbore or well pad. Previously, producers operating on federal lands faced restrictions that required segregating production by lease — a rule born in an era with far less sophisticated metering and digital tracking capabilities.

“That approach may have made sense in the past, but today’s digital oilfield has outgrown it,” Ferrari says. “We now have real-time monitoring, flow allocation algorithms, and volumetric precision tools to track production accurately, eliminating the need to split operations across multiple pads. In fact, commingling reduces surface disturbance, shortens development timelines, and avoids duplicative infrastructure — precisely the kind of innovation that serves both economic and environmental interests.”

Efficiency that honors land and mineral value

Critics of commingling often raise valid concerns. For private mineral owners, the reform raises questions about access to audits, royalty transparency, and how production data is allocated.

“When done responsibly, commingling doesn’t dilute accountability,” Ferrari says. “It demands enhanced transparency. With proper enforcement, mineral owners can receive faster returns, supported by cleaner, more consolidated data. Strong digital reporting systems and consistent federal oversight will be critical for maintaining trust and ensuring fair returns.”

For operators, it means aligning economic discipline with environmental care — less concrete, fewer trucks, and smaller footprints.

“I’ve seen firsthand how operational agility, supported by targeted regulatory reform, can accelerate development from concept to cash flow more quickly and sustainably,” Ferrari remarks. “In many Western states where federal leases dominate, this rule could be the difference between development stalling and succeeding.”

Regulatory reform without political drama

According to Ferrari, this recent rule change is part of a larger shift in federal energy policy and a broader recalibration of federal energy permitting and U.S. oil and gas regulation. This shift toward pragmatic permitting reform recognizes the balance between production needs and process efficiency. 

“By removing bottlenecks that no longer serve today’s capabilities, we create space for investment, job creation, and improved environmental performance,” Ferrari says. “The answer isn’t more regulation, but better regulation that is flexible, science-driven, and rooted in practical experience.”

Trust is the linchpin

For this rule to succeed, Ferrari highlights that all parties, including regulators, operators, and landowners, must agree on a shared baseline of trust. “That means auditable reporting, consistent standards, and open data,” he says. “Technology is already there; what remains is implementation with integrity.”

Moreover, the success of the rule depends on how thoroughly it’s implemented and enforced. Without standardized auditing and reporting tools across federal leases, inconsistencies could undermine the rule’s intent.

A step toward smarter energy production

“Progress in energy doesn’t always mean drilling more,” Ferrari clarifies. “Sometimes, it means doing more with what we already have. The updated commingling rule shows how thoughtful changes can reduce waste, save money, and preserve land.”

In today’s industry, efficiency and responsibility aren’t in conflict; they’re interdependent. When done right, operational flexibility supports both profitability and sustainability. 

“This policy change is a step in the right direction, and one we should welcome,” Ferrari concludes. “Let’s move forward with precision, partnership, and purpose.”