On September 29, the Bureau of Land Management within the U.S. Department of the Interior held its final auction for oil and gas leases on federal lands in fiscal year (FY) 2020. In the sale, the Bureau offered up leases on 23 pieces of federal land, or ‘parcels,’ in Utah that together span roughly 27,400 acres. All parcels received bids, but like most sales in Utah, those bids generated very little revenue for taxpayers.
Of the acres up for auction, two-thirds were located in Sevier County, while the rest were spread out over five other counties. Of all parcels up for auction, the highest bid was recorded for one parcel in Uintah County, which was leased for $32 per acre. Altogether, participants in the auction bid just $7.72 per acre, on average. That is 80 percent less than the $36.80 average bid in all Utah lease sales over the last five years (FY2015-2019).
The average bid in the sale was pulled down by 7 parcels that received the minimum legal bid of $2 per acre. 6 additional parcels sold for $10 per acre or less. Unfortunately for taxpayers, a lease sale with 30 percent of parcels selling for the minimum bid, and more than half selling for $10 per acre for less matches the long-term trend for auctions in Utah.
The Bureau’s decision to hold the lease sale despite ongoing weakness in the oil and gas market likely contributed to the sale’s poor results. But taxpayers are unlikely to see consistently higher returns, during a pandemic or not, until the federal oil and gas leasing process is reformed.
Results of Bureau of Land Management Oil & Gas Lease Sale
Utah – September 29, 2020
|Leases||Acres||Total Bid||Avg. Bid/Acre|