A practice of leasing federal lands that critics say allows oil and gas companies to unfairly take control of public mineral resources has been eliminated by a bill sponsored by U.S. Senator John Hickenlooper that was included in the Act. President Joe Biden’s inflation cut that became law on Tuesday.
A quirk of federal land lease law allowed oil and gas companies to buy the rights to drill for just $1.50 an acre, far less than usual, if the land had already been leased. auction and no one is bidding on the plot. A press release from the Hickenlooper office says 40% of acres currently leased for drilling go through this non-competitive process.
This, Hickenlooper says, allowed companies to ask the Bureau of Land Management to put parcels up for auction when they had no intention of bidding on it, and then, when no one else was bidding at the auction, companies rented them at the bargain price because previous law required BLM to do so.
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“The COMPETES Competitive Onshore Mineral Policy via Eliminating Taxpayer-Enabled Speculation (COMPETES) Act is a victory for taxpayers, outdoor enthusiasts and anyone who appreciates western public lands,” Hickenlooper said. “Uncompetitive leasing has encouraged speculation over land that could be kept for everyone’s enjoyment. We are delighted that this sensible bill is now law.
“Senator Hickenlooper promised to walk down the aisle to get bipartisan legislation, so it’s hard to believe this legislation couldn’t have been improved with bipartisan support,” said Dan Haley, president and CEO. of the Colorado Oil & Gas Association. “Colorados continue to suffer from high gas prices, high energy costs and high inflation, and unfortunately this policy proposal will not help family budgets at all.”
When public lands are leased and managed by BLM for production, Hickenlooper’s press release says, “those lands are often not managed for outdoor recreation, conservation, or other uses.”
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According to the press release, “A 2020 report by the Government Accountability Office found that approximately 99% of non-competitively leased land has never produced oil or gas in revenue quantities. Moreover, these lands generated less than 2% of federal royalties, despite accounting for almost 40% of leased acres.
“Public lands leased for production are generally not managed for other uses, such as recreation and conservation, but taxpayers are left behind for oil and gas company speculation on public lands,” the report said. Press release.
It’s unclear how the speculative leases of unproductive plots that the GAO report mentions are “leaving taxpayers on the hook.”
According to Hickenlooper’s office, the idea is that by reducing the number of parcels up for auction, the BLM will be able to redirect the resources they save to managing the land for recreation and conservation.
“The oil companies are expected to stop speculating so much,” Hickenlooper press secretary Anthony Rivera-Rodriguez said.
“That doesn’t mean we should take public land for production. That means you shouldn’t be able to name and even not bid on it, just to take advantage of a lower price,” Rivera-Rodriguez continued.
Rivera-Rodriguez admits that BLM already has the authority to manage these lands for recreation and conservation purposes, even though the underground mining estate is under lease. But, he insists, the BLM does not, pointing to the GAO report.
Recreation on leased federal lands administered by the BLM is permitted, according to Eliott Hinckley, a BLM ranger and law enforcement officer.
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“We don’t have any regulations contrary to that, unless there are safety concerns or special recreational use permits,” Hinckley told The Denver Gazette.
According to Hinckley, surface use is permitted unless expressly prohibited.
An example cited by Hinckley was grazing leases, where public access is permitted on the allotment, but grazing animals are not. Similarly, security issues around wellheads may create the need to exclude the public. Another example is a city-operated developed ball diamond that is built on leased federal land where the managing authority can set rules for entry and use.
