Ledes from the Land of Enchantment

BLM opens lands back up to oil and gas leases

With a small post on the Bureau of Land Management website, the open sign to lease new mineral exploration on federal lands is back up.

Notices for sale of oil and gas leases on public lands were posted this week following a judge’s order in 2021 that the Interior Department must begin auctions for land to be sold, ending the moratorium on the practice imposed by President Biden when he first took office. 

Federally controlled sites in Montana, Utah, Nevada, Colorado, Wyoming, Oklahoma and New Mexico are now available for energy companies. 

The bids in New Mexico are for one site in Chaves County between Artesia and Roswell and four sites in Lea County located near the Texas border. The five locations are overseen by the Bureau of Land Management. A 10-year lease will be issued to the successful bidder. 

In total, more than 520 acres will be auctioned off for mineral extraction in New Mexico. The largest parcel available is the 320 acres in southeast Chaves County.

Biden issued the moratorium to suspend new drilling lease agreements on federally managed public lands offshore sites the first week he took office. His directive also made the Interior Department review how it handles these transactions, and come up with a list of recommendations on how to improve community and environmental needs when land is sold for drilling.

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A little over a year ago, 13 states filed an injunction asking the court to end the moratorium. New Mexico is not part of the complaint. The judgment came from the Western District of Louisiana in June, prompting the Interior Department to finalize its environmental review of the sites and post them online.

Along with the auction notices, the Interior finished and released the report on federal oil and gas leases as Biden directed in his executive order.

Interior Secretary Deb Haaland said the review shows a need for greater consultation with communities, including Tribal leaders. On top of that, there are also recommendations to bring in more input on lease agreements from communities of color, “who bear a disproportionate burden of pollution,” from oil and gas operations nearby. The details of a path forward are still unclear, but the Interior indicated it’s ready to initiate conversations around the consequences of drilling.

“For too long, the federal oil and gas leasing programs have prioritized the wants of extractive industries above local communities, the natural environment, the impact on our air and water, the needs of Tribal Nations, and, moreover, other uses of our shared public lands,” Haaland said after the announcement of new leases became last week. 

According to the report, the Bureau of Land Management oversees 37,496 federal oil and gas leases that cover 26.6 million acres. However, more than half of that land issued for drilling is non-producing. This approach to follow the speculative market and hold land until the highest profit margin can be reached conflicts with the Biden administration’s plans for conservation.

“When land is under contract for potential oil and gas activity, the shared public lands cannot be managed for other purposes, such as conservation or recreation,” the report summarized. “As an overarching policy, BLM should ensure that oil and gas is not prioritized over other land uses, consistent with BLM’s mandate of multiple-use and sustained yield.”

A key recommendation in the report that is now part of the new lease auctions will impact how much money taxpayers will receive from these transactions. For the first time, the bureau will apply a higher royalty rate, today set at 18.75%, consistent with the rates charged by states and private landowners. 

The previous rate established in 1920 set minimum royalty rates at 12.5%. The outdated figure ultimately hurt taxpayers that “lost up to $12.4 billion in revenue from oil and gas drilling on federal lands from 2010 through 2019 because federal royalty rates are too low,” according to the report.

Public comment

Resuming oil and gas auctions on federally controlled lands also prompts public comment. The 30-day period ends May 18, 2022. Anyone with an objection to a sale can only submit their comment by emailing [email protected]. The subject line must read: “June 2022 Protest.”

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