Washington, D.C. December 9, 2020 – Chair Raúl M. Grijalva (D-Ariz.) and Rep. Alan S. Lowenthal (D-Calif.), Chair of the Subcommittee on Energy and Mineral Resources, today released a Government Accountability Office (GAO) report showing that the Bureau of Land Management’s (BLM) practice of noncompetitive oil and gas leasing allows companies to lock up millions of acres of public lands for decades while U.S. taxpayers receive pennies in return.
The report, Oil and Gas: Onshore Competitive and Noncompetitive Lease Revenues, available at https://www.gao.gov/products/GAO-21-138, finds that 98.8 percent of noncompetitive BLM oil and gas leases sold between 2003 and 2009 did not enter production in their 10-year primary term, meaning millions of acres of public lands were held by fossil fuel companies and blocked from other uses while generating very close to zero revenue for taxpayers.
GAO found that from 2003 through 2019, the federal government sold 100,281 leases for drilling rights on federal lands. Of those lease sales, 27 percent (27,535) were noncompetitive, making up about 38 percent of total acreage sold (34 million of 89 million acres). Only 1.2 percent of those noncompetitive leases ended up producing oil and gas.
Currently, companies pay nothing to nominate parcels for oil and gas leasing, which then undergo environmental review at taxpayer expense. If a parcel receives no bids during an auction, they are available on a first-come-first-served basis for two years for only $1.50 per acre. Companies that lease parcels of federal property through drilling auctions or noncompetitive bids may hold the land for 10 years before the leases expire, regardless of what they do with the property itself. While the leases are active, the land is unable to be used for other purposes, including conservation, outdoor recreation, or renewable energy development.
Yesterday, BLM held an oil and gas lease sales in Utah that offered nearly 24,000 acres of public land. Only 4,284 acres (18 percent) of public land received a bid. As of today, 19,539 acres are now available for noncompetitive leasing.
On Sept. 30, the Natural Resources Committee passed the Restoring Community Input and Public Protections in Oil and Gas Leasing Act (H.R. 3225), which modernizes BLM’s leasing process by eliminating noncompetitive leasing, shortening the primary lease term to 5 years, and increasing the minimum bid, rental rate, and royalty rates.
“Americans have been getting ripped off and losing access to their public lands for decades, and the only reason not to fix it is to keep Big Oil happy,” Grijalva said today. “Ending this kind of expensive polluter giveaway is a big step in rebuilding a more sustainable economy with good paying jobs. It’s time to end our country’s helplessness around fossil fuels, clean our air and water and put more money in family pockets.”
“This important GAO report finds what we have long suspected, that the American taxpayers have been paying for their federal public lands to be given away to the oil and gas industry for no return on their investment,” Rep. Lowenthal said. “More than thirty million acres of land were locked up by noncompetitive leasing that would have been better used for renewable energy development, public recreation, protection and conservation, or even not used for anything. Any of these would have been a better investment to the American taxpayers. I look forward to working with the new Biden administration as well as my colleagues in the Natural Resources Committee and throughout Congress to improve this flawed bidding and leasing process.”