Noncompetitive Oil and Gas Leasing is Ripping Off Taxpayers

Please join us in calling on Montana Sen. Steve Daines to support the Leasing Market Efficiency Act

By Roger Otstot

The Bureau of Land Management regularly holds auctions to sell oil and gas leases to land owned by you, me, and all other American taxpayers. But many leases are not bid on during these auctions because they involve parcels of land that hold little, if any oil and gas potential. The BLM sells those leases the day after for about the price of a cup of coffee – a mere $1.50 an acre.

So why does the Bureau of Land Management bother selling these leases if they are not going to lead to oil and gas production, jobs, royalties, or anything else that might benefit American taxpayers? Why bother when processing and managing those leases cost millions in taxpayer dollars the BLM should be using to do its job of caring for our public lands on behalf of the American public?

It’s because of a 100-year-old law that obligates the government to sell noncompetitive leases, a law that no longer serves the American public, a law that now only benefits speculators who scoop up these leases mostly just to pad their portfolios and please investors.

Thankfully, Montana Sen. Jon Tester introduced legislation in July that will put an end to this wasteful practice of noncompetitive leasing. The Leasing Market Efficiency Act will require all BLM oil and gas leases to be issued through a fair, competitive process. The new system will increase transparency, cut down on government waste, and – most importantly – ensure that the BLM is using taxpayer dollars to care for our public lands, not manage hundreds of leases that offer no benefit whatsoever to the public.

There is an urgent need for this bill to pass, especially in Montana.

At the end of July, the BLM finalized a management plan for 650,000 acres of public lands in central Montana. They include some of the last intact prairie grasslands in the U.S. and some of the best habitat in North America for upland birds, elk and other big game.

The plan opens up 95% of this area to oil and gas leasing, even though there’s very little potential in this part of the state for oil and gas production. The original version of this plan would have protected well over 100,000 acres of the 200,000 acres that the BLM identified as having wilderness character, lands that adjoin the Upper Missouri River Breaks National Monument and the Charles M. Russell National Wildlife Refuge.

But that version was drafted before William Perry Pendley stepped into the role of BLM’s acting director. The final version, which Pendley touted in a recent op-ed, offers hardly any protection for crucial wildlife habitat and instead opens the floodgate to noncompetitive oil and gas leasing throughout central Montana, which means that the BLM will be dedicating taxpayer money, time, and resources to administering leases, and not enough to managing these lands.

(An outspoken advocate for selling off public lands and former lead counsel for a company trying to drill in the Badger-Two Medicine, Pendley was recently withdrawn as the nominee for BLM director because of the terrible reputation he has in western states, especially in Montana. Astonishingly, he remains as the de facto acting director.)

Tester’s Leasing Market Efficiency Act would prohibit the BLM from wasting millions on noncompetitive leases in central Montana and elsewhere, and instead use that money for improving wildlife habitat, protecting water quality and fisheries, maintaining trails, building boat launches, creating fishing access sites, and everything else the BLM is supposed to be doing for the American public with our taxpayer dollars.

Please join us in calling on Montana Sen. Steve Daines to support the Leasing Market Efficiency Act.

Roger Otstot of Billings is a retired economist with the Bureau of Reclamation.

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