On January 8, the Department of the Interior (DOI) held a replacement sale in Colorado, re-offering 20,451 acres of federal land for oil and gas development. It received no bids. While disappointing for taxpayers, the result was unsurprising. The parcels were the same ones industry had ignored at auction just one month earlier.

The “replacement sale” is a new requirement created this summer in the One Big Beautiful Bill Act (OBBBA). When a quarterly lease sale in certain states—Alaska, Colorado, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Utah, and Wyoming—fails to receive bids on 25% or more of the acreage offered, DOI must hold a replacement sale. The same requirement applies if an auction is canceled, delayed, or deferred. Between 2015 and 2024, more than one-third of all lease sales would have triggered a replacement sale, suggesting this provision could significantly increase the number of auctions DOI is required to hold.

Today’s lease sale “replaces” the fourth-quarter auction held in Colorado on December 9. That sale offered 60 parcels, covering nearly 51,000 acres of federal land, and leased just 60% of the available acreage. The roughly 20,000 acres that went unleased were re-offered today—and once again, not leased.

This is the second time a replacement sale has been triggered. The first replacement sale, held on December 30 to “replace” the fourth-quarter auction held in Wyoming, produced similarly poor results. The auction attracted bids from just two companies, each acquiring a single 80-acre parcel for the legal minimum bid of $10 per acre. In total less than 1% of the available acreage was leased.

Questions remain about how replacement sales will be implemented in the future. The OBBBA does not specify which parcels must be included in a replacement sale. While both replacement sales to date have repeated the same nonsensical pattern of re-offering parcels that drew no bids in prior auctions, DOI may have the authority to change this approach moving forward.

There is also uncertainty about in how replacement sales intersect with the noncompetitive leasing process, which Congress reintroduced this summer. Under noncompetitive leasing, companies can acquire parcels of land that go unsold at competitive auction for a minimum fee of $75, without placing a bid. By contrast, competitive bids start at $10 per acre and reached as high as $2,000 per acre in the most recent Colorado lease sale. In theory, any parcels that are not leased at a competitive auction should be available noncompetitively the very next day. But if BLM re-offers those same parcels in competitive “replacement” sales, it remains unclear whether that land ever was—or will be—available through the noncompetitive process.