Lease Sale Results Show Need for Rulemaking

Rugged mountain peaks covered by snow with natural gas injection well and storage facility in the foreground.
Gas Well Near Pinedale Wyoming, Photo by Bryan Nealy, Bureau of Land Management, from Flickr (CC BY 2.0)

In late June, the Bureau of Land Management (BLM) held its first onshore oil and gas lease sales since early 2021. The sales offered parcels in seven states, including Colorado, Montana, New Mexico, and Wyoming. Seventy percent of the leases up for sale were purchased by the oil and gas industry. 

Improvements to the Sale Process

Prior to the lease sales, the Department of the Interior (DOI) implemented several commonsense reforms for the sales, including limiting the public lands that were offered for lease in order to avoid leasing in wildlife habitat and migration corridors, cultural areas, and areas with little to no development potential, and increasing the required royalty rate for any leases sold to 18.75 percent to provide a fairer return to taxpayers. In states where industry bought up all or many of the offered leases, like New Mexico and Wyoming, it’s clear that these changes were critical for protecting our public lands, waters, and wildlife from the irresponsible oil and gas leasing that had previously gone on for far too long. 

Making the Improvements Permanent

The Biden administration has the ability to make the changes that were introduced in these lease sales permanent and go even further to protect our public lands and the many uses they offer. The Biden administration must act quickly to initiate a rulemaking aimed at bringing the antiquated federal oil and gas leasing system into the 21st century. At a minimum, new rules for the onshore leasing program must include the following reforms, some of which were already put in place in last week’s sales: 

  • Evaluate nominated lease parcels against criteria that can be used for ensuring leases are not offered in important wildlife habitat, migration corridors, and other sensitive areas (as Rocky Mountain Wild does with our ABI Screen); 
  • Continue to charge an 18.75% royalty rate to better align returns for taxpayers with the rates required on state lands across the country, and increase the minimum lease bid and annual rental rates to ensure that companies are required to pay market rate for leasing publicly-owned resources and to guarantee that taxpayers get a fair return;
  • Avoid wasteful, speculative leasing in areas of low potential for oil development and take important steps to curb noncompetitive leasing;
  • Require oil and gas companies to fully pay for potential clean-up costs, so that public lands and wildlife aren’t put at risk from the threat of orphaned wells and so that taxpayers aren’t stuck with the bill for the wells industry leaves behind. 

A majority of westerners already support these reforms, and making them permanent is the right thing to do for our public lands, wildlife, and way of life. 

Congress can also take action, and some western leaders have already gotten started by introducing legislation in the United States House of Representatives and the Senate to make the same changes outlined above. 

The path to reforming the federal oil and gas leasing system is already clear. It’s time for President Biden, Secretary Haaland, and Congress to fix the broken system in order to protect wildlife, clean air and water, frontline communities, and taxpayers for years to come.

Take Action to Reform Oil and Gas Leasing