The Highlights

• Second federal oil & gas lease sale in Utah this year
• In total, 54,114 acres of public land were offered and leased, all at below market rates.
• The sale had an average bid of $267 per acre (lower than the state’s 2025 average of $843), with individual leases selling for between $10 and $1,758 per acre.
• TCS estimates taxpayers will lose $66.4 million in royalty revenue from future production on these leases.

On June 24, the federal government offered and leased 54,114 acres of public land in Utah for oil and gas development at the recently reduced federal royalty rate of 12.5%. Based on projected production, taxpayers stand to lose an estimated $66 million in royalty revenue over the life of these leases.

This sale adds to mounting losses. TCS estimates that taxpayers have already lost more than $1.4 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.

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 40 acres in Uintah County was leased for $1,758 per acre. On the low end, one parcel containing 1,920 acres in Grand County was leased for $10 per acre, the legal minimum bid accepted at auction.

Approximately 70% of the acreage leased today was located in Grand County, which accounted for less than 1% of federal oil production and 2% of federal gas production in the state last year (FY2025). These parcels received an average bid of just $25 per acre. By contrast, 25% of the leased land was located in Uintah County, which is the state’s largest producer of federal oil and gas. These parcels received a much higher average bid of $974 per acre.

Competitive, market-based royalty terms do not deter industry interest or production decisions. In fact, nationwide average bids were higher in 2023 and 2024 under the 16.67% rate ($978 and $2,149 per acre, respectively) than they had been in the previous decade ($288 per acre 2013-2022).

Lowering royalty rates only shortchanges taxpayers by reducing future royalty revenue. In Utah alone, taxpayers lost an estimated $721 million in revenue from FY2013 to FY2022 under the 12.5% rate. Because federal mineral revenues are shared between the federal treasury and states, Utah taxpayers will also lose funds for schools, infrastructure, and other local priorities.

The Bureau of Land Management estimates that the parcels leased today could yield 20 million barrels of oil and 57 billion cubic feet of natural gas over a lifetime of development. 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 $1.6 billion. At the 12.5% rate, taxpayers would receive about $199 million in royalty revenue, roughly $66 million less than we would receive 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.