The federal government has acceded to common sense and postponed several federal oil and gas lease sales over the last few weeks. The Department of the Interior’s Bureau of Land Management, the agency responsible for the federal onshore oil and gas program, has postponed seven lease sales originally scheduled for May and June in Colorado, New Mexico, Montana, Mississippi, Nevada, Utah, and Wyoming.
Current law requires the Bureau of Land Management to recover fair market value from leasing federal lands and the development of taxpayer-owned oil and natural gas within them. The tumultuous state of the oil and gas industry, persistent low oil prices and global over-supply make achieving a fair return impossible in the current environment. Taxpayers for Common Sense has been calling on the Department of the Interior to recognize reality and suspend both onshore and offshore oil and gas leasing for some time. Postponing these lease sales is the right decision even if way overdue.
Delaying oil and gas leasing sales saves taxpayers from receiving measly revenues from valuable federal resources. The BLM has been tight lipped on its reasoning behind the postponement of the lease sales. Only BLM’s Montana office has provided a statement regarding the decision citing “workload and staffing considerations.” Halting federal leasing is nonetheless a win for taxpayers.
The federal oil and gas leasing system already charges below market rates that costs taxpayers millions of dollars in foregone revenue each year. Continuing to hold oil and gas lease sales in the current economic climate would only exacerbate taxpayer losses.