DENVER—The Bureau of Land Management just wrapped up its first onshore oil and gas lease sale under the Biden administration, offering around 120,000 acres of public land in Wyoming across two days. A number of smaller lease sales in other states, totaling less than 10,000 acres altogether, are underway today.
Oil and gas companies leased around 60 percent of the total acreage offered in Wyoming. The BLM raised the royalty rate for this lease sale to 18.75 percent to align with royalty rates charged by states. The BLM has charged a 12.5 percent royalty rate in the past.
The Center for Western Priorities released the following statement from Executive Director Jennifer Rokala:
“The results of today’s lease sale show that oil and gas companies are fine paying market-rate royalties on oil and gas leases, despite their claims to the contrary leading up to this sale.
“The Interior Department was right to use its discretion to remove 80 percent of the acres originally planned for this lease sale. Oil and gas companies already have millions of acres of our public land locked up in unused leases and thousands of unused drilling permits.
“Shrinking this sale and raising federal royalty rates to align with those levied at the state level shows that the Biden administration is listening to those who are tired of seeing our public lands sold at bargain basement prices. Now, the administration needs to go beyond these temporary changes with top-to-bottom reform of the oil and gas leasing system. The era of oil and gas companies locking up our public lands while ripping off taxpayers needs to end.”
It’s also important to note that this lease sale will have no immediate effect on gas prices—nor will the administration’s decision to raise royalty rates. It takes 4 years on average for a new onshore lease to produce, so no oil and gas from the parcels leased today will be sold anytime soon. Meanwhile, oil and gas companies are sitting on nearly 9,000 approved but unused permits to drill that could produce oil today. But energy companies are choosing not to drill in order to plow their record profits into stock buybacks and dividends for investors, as well as bonuses for their CEOs.
Learn more:
- By the numbers: Onshore oil and gas leasing and drilling under the Biden administration (dashboard updated regularly) [Center for Western Priorities]
- The oil industry’s forfeited public lands stockpile [Center for Western Priorities]
- Biden increases oil royalty rate, scales back lease sales [Associated Press]
- Onshore Competitive and Noncompetitive Lease Revenues [Government Accountability Office]