Process

The Process

Six steps that turn public lands into private oil and gas leases

Step 1

Companies, not land managers, "nominate" public lands to be leased for drilling

Nearly 700 million acres of taxpayer-owned oil and gas—mostly lying under public lands—are overseen by the Department of the Interior’s Bureau of Land Management (BLM). The process to lease lands for oil and gas drilling is driven by private oil and gas companies who nominate land for leasing. Millions of acres of U.S. public lands, nominated by oil and gas companies, are leased for drilling every year.

Step 2

Land managers analyze nominations, with taxpayers footing the bill

After an oil and gas company nominates lands for drilling, the BLM pays for environmental analyses, deciding whether to put the lands up for lease. Between 2009 and 2016 the BLM made nearly 31 million acres of public lands available for oil and gas development at the behest of companies. Less than 8 million of those acres received bids from oil or gas companies, while more than 23 million acres went without bids. 

Step 3

Public land leases are sold through online auctions starting at low rates of $2 per acre

Currently, the minimum bid required to obtain public lands at an oil and gas auction stands at $2.00 per acre. This amount has not been increased in decades. Every year, oil companies buy leases to tens of thousands of acres of U.S. public lands at below market rates.

Step 4

Companies can sit on leases for 10 years or longer before drilling

Oil and gas companies stockpile leases, but fail to produce on many of them. The BLM allows companies to stockpile leases for 10 years or more, often “suspending”—effectively extending— leases for years or even decades.

Currently, for each leased acre producing oil and gas (about 12.8 million acres), one leased acres sits unused (about 14.4 million acres). What’s more, oil and gas companies are sitting on nearly 8,000 drilling permits, which are approved, have cleared all environmental reviews, and are ready to be drilled, but for whatever reason are not being used.

It costs only $1.50 per acre annually (and $2.00 per acre annually after five years) to leave leased public lands idle, which provides little incentive to generate oil and gas or avoid land speculation. Adjusting the rental rate up to just $3.00 for the first five years of a lease and $5.00 thereafter could generate tens of millions of dollars for taxpayers annually.

Step 5

Extremely low royalty rates for public land production mean less money for taxpayers

Oil and gas companies are required to pay royalties to taxpayers for oil and gas extracted from public lands. Royalty rates on U.S. public lands are set at 12.5 percent—a rate that was first established nearly a century ago. States across the West charge companies a royalty rate of between 16.67 percent and 25 percent for the right to produce oil and gas on state-owned lands.

The failure to update royalty rates has left the BLM’s oil and gas program on a Government Accountability Office’s High Risk List for fraud, waste, abuse, and mismanagement. A recent GAO report found that small increases to royalty rates would generate millions annually for taxpayers.

Step 6

Companies can abandon oil and gas wells, leaving taxpayers with the reclamation bill

Abandoned wells can be found throughout the West, posing both health and environmental risks. While companies are required to put up a bond—or insurance—to cover a portion of the reclamation costs, current bonding requirements are inadequate to cover the costs. And because the U.S. government has not updated bonding levels in over 50 years, the problem is only getting worse. According to one analysis, bonding for individual wells can run as low as $50, while reclamation costs can run up to more than $500,000 per well.

LEARN MORE: Reports, Blogs, & Fact Sheets

REPORT: Rigged: Access to drill

The real problem is too much access and the threat that industry’s relentless greed poses to our national parks, hunting and fishing grounds, and drinking water supplies.

Author: Western Values Project

REPORT: Rigged: Deadbeat tenants

Companies are systematically exploiting loopholes, subsidies and other special advantages that they enjoy.

Author: Western Values Project

BLOG: Congress is considering an egregious giveaway of publicly-owned oil, gas, and coal

Rep. Rob Bishop wants to let states run roughshod over endangered species while ripping off taxpayers.

Author: Center for Western Priorities

REPORT: Rigged: Industry already has the keys to the kingdom

Oil and gas companies can nominate our public lands for leasing anywhere and anytime they want to – that is an irrefutable fact.

Author: Western Values Project

BLOG: Out west, MAGA means steamrolling local perspective in favor of oil driller greed

Lost in Trump’s attacks on specific communities, a battle over the idea of community itself.

Author: ThinkProgress

BLOG: Leaked memo reveals how the Trump administration will fast-track drilling and mining on public lands

The order would turn the Bureau of Land Management into a rubber stamp for the oil industry.

Author: Center for Western Priorities

REPORT: Anywhere and Everywhere

The top ten most shocking places the oil and gas industry is trying to lease and drill.

Author: Western Values Project

REPORT: Oil and Gas Leasing & Permitting on State Lands

Recent trends in the Rocky Mountain West.

Author: Western Values Project

REPORT: Public Land Energy Development by The Numbers 2017

Despite what some politicians have been saying, the issue with energy development on public lands is excess, not access.

Author: The Wilderness Society

BLOG: Future Looking Like the Past

Interior Department sets out on alarming path to put fossil fuel companies first on public lands.

Author: The Wilderness Society

FACT SHEET: Acreage Open to Leasing – BLM Plans Around the West

Tracking public lands made available for oil and gas lease sales across Western states. 

Author: The Wilderness Society

REPORT: Open for business: Sage brush landscapes continue to drive Western economies

Conserving sagegrouse is fully compatible with maintaining robust economic activity and multiple uses on the public lands.

Author: Western Values Project

REPORT: Open for Business (and not much else)

How public lands management favors the oil and gas industry.

Author: The Wilderness Society

REPORT: Land Hoarders: How Stockpiling Leases is Costing Taxpayers

Oil and gas companies are supposed to develop the public land leases they are privileged to hold in a timely manner, or give them up.

Author: The Wilderness Society

REPORT: Fixing the BLM's Indiscriminate Energy Leasing

It’s time to update the BLM’s approach and give the public more of a say in managing our public lands.

Author: The Wilderness Society

REPORT: A Turning Point for the Bureau of Land Management

Public opinion data provides greater detail on Americans’ current priorities for their public lands and help explain why the Utah leasing debacle in 2008 provoked such a strong public outcry.

Author: Center for American Progress

REPORT: A Continued Push for Reform Is Needed on Public Lands’ Energy Leasing

Some BLM leaders in the West have been less than enthusiastic about the Obama administration’s reform agenda, making implementation of the changes uneven and slower than it should be.

Author: Center for American Progress

REPORT: Public Lands Oil and Gas Lease Tracker: 2014 Summary

In 2014, oil and gas companies leased a total of 606,722 acres of national public lands in seven Western states.

Author: Center for Western Priorities

BLOG: Trump administration auctions imperiled sage-grouse habitat to oil and gas companies for pennies on the dollar

Utah auction pulls in less than the price of one Ford Focus.

Author: Center for Western Priorities