On Tuesday, October 1, 2019, the Bureau of Land Management (BLM), an agency within the Department of the Interior, held its third sale of the year for federal oil and gas leases in Nevada. The lease sale offered up 141 parcels totaling 269,000 acres of federal lands for oil and exploration and development. Like usual in Nevada, there was little interest in the auction, and the lease sale generated only $70,000 in revenue.
|Total High Bids: $40,130|
Only 11 of the 141 available parcels, or eight percent, received a bid. Ten of the 11 parcels that received a bid were leased for $2 per acre, the minimum BLM can accept under current law. The 11th parcel leased in the sale was the only one to receive multiple bids and sold for $5 per acre.
This left 130 parcels of federal land in Nevada comprising more than 250,000 acres unleased. Any interested party can now lease those acres without paying a bid at auction through the noncompetitive leasing process for up to two years. In fact, BLM documents indicate that 15 noncompetitive offers were submitted for 13 parcels the day after the lease sale. That is, more parcels were leased noncompetitively than at the competitive sale.
Overall, the lease sale underscores the findings of our recent report Gaming the System, that BLM policies undermine competitive leasing and reduce the return from federal oil and gas development in Nevada.
The results of Nevada oil and gas leasing are especially underwhelming when compared with federal lease sales in other states. In the September lease sale in New Mexico, for example, oil and gas companies bid more for each of 11 different parcels than the Nevada sale raised altogether.