This week the Bureau of Land Management (BLM), an agency within the Department of the Interior responsible for the federal onshore oil and gas program, held an oil and gas lease sale in the state of Nevada offering federal lands for oil and gas exploration and development.
While 48 parcels comprising over 110,000 acres of federal land were made available through the lease sale, the sale attracted bids on just two of those 48 parcels or four percent. Both parcels sold for the rock bottom price of $2 per acre – the lowest amount the BLM can legally accept. The two parcels of land amount to just under 4,000 acres with high bids totaling $7,950.
Prior to the sale, five companies registered to participate, but only a single company submitted bids, wining leases on the two parcels uncontested. Lack of industry interest has been a mainstay of federal oil and gas lease sales in Nevada. This is the fourth lease sale the BLM has held in the state of Nevada this year and the results of those prior sales are equally disappointing. Of 369 parcels offered in the last three sales just 34 were leased by industry, or nine percent.
Instead, companies and speculators are frequently using a loophole to lease parcels noncompetitively the day after lease sales and avoid paying the $2 per acre minimum bid at auction. In the last five federal lease sales in Nevada dating back to September 2018, twice as many parcels received noncompetitive offers the day after lease sales than competitive offers in the sales themselves.