The Highlights

• Third federal oil & gas lease sale in Colorado this year and the state's largest in more than 15 years. 

• In total, 156,000 acres of public land were offered and 134,000 were leased, all at below market rates. 

• The sale had an average bid of $256 per acre, with individual leases selling for between $11,000 and $10 per acre. 

• One third (43,000 acres) was sold for the legal minimum bid of $10 per acre. Two thirds were sold for less than $20 per acre. 

• TCS estimates taxpayers will lose $127 million in royalty revenue from future production on these leases. 

On June 16, the federal government leased 134,173 acres of public land in Colorado for oil and gas development at the recently reduced federal royalty rate of 12.5%. The result is an estimated $127 million in lost royalty revenue over the life of these leases.

This sale adds to mounting losses. TCS estimates that taxpayers have already lost more than $1.2 billion in projected royalty revenue from leases sold since July 4, 2025, when the One Big Beautiful Bill Act (OBBBA) reduced the onshore royalty rate to 12.5%—below what states and private landowners typically charge.

Today's sale was the state's largest in more than 15 years, offering 170 parcels of public land in Colorado, totaling 155,736 acres—more land than has been offered in the last 6 lease sales combined. More than two thirds of the available acreage was located in Moffat County, which produces little federal oil and gas. In 2026 alone, BLM is on track to offer more than 228,000 acres across 4 auctions in 2026 alone.

Results from today's lease sale:

Leasing decisions are driven by development potential and market conditions. Competitiveness in today’s sale varied widely. On the high end, one parcel containing 800 acres in Arapahoe County was sold for $11,000 per acre. On the low end, 39 parcels, containing a combined 42,893 acres, sold for $10 per acre, the legal minimum. An additional 80 parcels, containing a combined 83,443 acres, were sold for between $10 and $20 per acre.

Operators lease where there is strong development potential, a factor driven largely by the specific parcels included in a sale. Land in Weld County—the largest producer of federal oil in Colorado—generally received high bids, averaging roughly $3,000 per acre. Land in Moffat County generally received low bids, averaging roughly $35 per acre.

Competitive, market-based royalty terms do not deter industry interest or production decisions. Federal lease sales in Colorado have always varied greatly, with some auctions over the last decade generating over $4,000 per acre and others as low as $4 per acre, barely above the legal minimum bid at the time. This holds true under the 12.5% royalty rate and the 16.67% royalty rate. The one lease sale held under the 16.67% royalty rate, offering just one parcel, sold for $2,500 per acre. The next sale, held one year later under the 12.5% royalty rate, received bids between $10 and $5,000 per acre. Sale results are dependent on the specific parcels offered and global market conditions—not the royalty rate.

The same is true across the country. In fact, nationwide average bids were higher in 2023 and 2024 under the 16.67% rate ($2,149 and $1,085 per acre, respectively) than they had been in the previous decade ($288 per acre 2013-2022).

While the lower royalty rate does not make leases more competitive, it does reduce future royalty revenue. Our new report found that, in Colorado alone, taxpayers lost an estimated $937 million in revenue from CY2015-2024 under the 12.5% rate compared to an 18.75% rate. Because royalty revenue is shared between the federal government and states, Coloradans also lose funding that could otherwise support schools, infrastructure, and other public priorities.

The Bureau of Land Management estimates that the parcels sold today could yield 7.8 million barrels of oil and 629 billion cubic feet of natural gas over a conservative 10-year lifespan. Based on the White House budget office’s 2026 price projections—used to estimate federal royalty revenue from onshore leases—that production could be worth roughly $3 billion. At the 12.5% rate, taxpayers would receive about $379 million in royalty revenue, roughly $127 million less than we would under a 16.67% rate. 

Oil and gas resources developed on federal lands belong to the American people, and leasing terms should ensure those resources are not sold for less than they are worth.