The Highlights

• Third federal oil & gas lease sale in Nevada this year.
• None of the 20,600 acres of public land offered for oil and gas development were leased.
• Today’s sale results were not unsurprising. Leases offered in Nevada frequently go unsold or are issued at the $10 per acre legal minimum bid.
• Today’s auction will trigger a replacement sale—meaning that, despite a demonstratable lack of industry interest, BLM will be required to hold yet another lease sale to “replace” this one.
• 20,600 acres will now be available to be leased noncompetitively—outside of competitive auction and without paying even the $10 per acre minimum bid.

On September 16, the Bureau of Land Management (BLM) offered 14 parcels of public land in Nevada, totaling 20,600 acres, for oil and gas development. Nothing sold.

Thousands of acres of federal land in Nevada are offered every year for oil and gas development, despite little production in the state and limited industry interest at past auctions. The federal government offered 2.7 million acres of public land in Nevada at auction between 2016 and 2025, the second most in the country behind Wyoming. Less than 10% of what was offered actually sold. The last two oil and gas lease sales in Nevada tell a similar story, leasing a combined 30,000 acres at the legal minimum of $10 per acre. Today’s results follow this trend.

Federal lease sales in Nevada have never been competitive. Over the last decade, auctions in the state generated an average bid of $4.72 per acre — far below the nationwide average of $500 per acre or the average in high-production states like New Mexico ($5,200 per acre). Continuing to lease areas with little industry interest and low development potential ties up public lands while delivering little return to taxpayers.

Leasing More Acres of Federal Land Does Not Guarantee Greater Production or Public Return

While Nevada’s federal oil and gas program is small by national standards, it’s leased acreage is large—totaling nearly half a million acres. This makes the central question even sharper: if so much public land is being leased, why are taxpayers getting so little in return?

Today’s lease sale, combined with Nevada’s auction history, illustrates how offering more land does not guarantee high company interest or an increase in oil and gas production. BLM anticipated little future production from the leases offered. In its analysis of its leasing impacts, BLM stated that “54 wells could be drilled on the 14 lease parcels during the initial 10-year lease term and that 6 of those wells would be put into production.” And even their estimate of 6 producing wells was overly optimistic for this region; BLM further reported that since the 1950’s the region averaged one drill hole per year and, in recent years, that number has gone down to less than one drill hole per year.

Despite this lack of interest from operators, the federal government continues to offer thousands of acres of public land in Nevada every year for pennies on the dollar. This means federal agencies waste resources holding auctions that industry didn’t ask for and that any leased land is unlikely to enter production, unlikely to generate significant revenue for taxpayers, and will potentially block alternative uses such as recreation opportunities and other more economically valuable land uses.

No Bids Triggers Replacement Sales That Waste Agency Resources

Today’s sale will trigger a “replacement sale”, a new requirement created by Congress in the One Big Beautiful Bill Act (OBBBA). When a quarterly lease sale in certain states—Alaska, Colorado, Montana, Nevada, New Mexico, North Dakota, Oklahoma, Utah, and Wyoming—fails to receive bids on 25% or more of the acreage offered, BLM must hold a replacement sale. The same requirement applies if an auction is canceled, delayed, or deferred. Between 2015 and 2024, more than one-third of all lease sales would have triggered a replacement sale, suggesting this provision could significantly increase the administrative burden on BLM.

Since its enactment, only two replacement sales have been held—and both had poor results. The first replacement sale, held on December 30 to “replace” the fourth-quarter auction held in Wyoming, attracted bids from just two companies, each acquiring a single 80-acre parcel for the legal minimum bid of $10 per acre. In total less than 1% of the available acreage was leased. The second replacement sale, held on January 8 to “replace” the fourth-quarter auction held in Colorado, attracted no bids.

According to OBBBA and related BLM guidance, the replacement sale must be held “within 30 days, or before the end of the fiscal year, whichever is sooner”— meaning they must hold a sale within the next 14 days. Re-offering land with little to no proven industry interest, especially immediately after a failed lease sale, costs taxpayers in administrative time and resources.

Parcels Not Bid on At Auction Are  Available for Noncompetitive Leasing

The 20,600 acres not leased at today’s sale or in a future, replacement sale will become eligible for noncompetitive leasing. Under this process, parcels are awarded to the first applicant willing to pay an administrative fee, set by BLM at a minimum of $75 regardless of acreage, plus the first year’s rent. No competitive bid is required. This process, repealed by Congress in 2022, was reinstated in 2025 and enables companies to bypass market competition entirely.

More than half of the 500,000-plus acres currently leased in Nevada were sold noncompetitively.

Leases issued noncompetitively generate less revenue and are significantly less likely to ever enter production. According to BLM, only 1 percent of noncompetitive leases issued nationwide begin producing during their primary lease term. The Government Accountability Office found that noncompetitive leases generate five times less revenue than competitively leased land.

To make matters worse, 260,000 acres of federal land in Nevada were leased the day after competitive auction, meaning that companies were interested in leasing this land but intentionally chose to not participate at auction in order to save millions of dollars—money that should have gone to federal and state taxpayers. In one case, BLM leased more than 36,000 acres noncompetitively—more than was leased at competitive auction the previous day— for an administrative fee of $8,715, translating to just $0.25 per acre. This process shortchanges taxpayers while benefiting speculators and oil and gas companies looking to acquire cheap lands to claim more ‘untapped acres’ on their ledgers.

Leasing Terms Must Support Responsible Development, Generate Revenue, and Protect Taxpayers

Federal oil and gas belong to the American people, and leasing terms should ensure taxpayers receive a fair return from the development of our valuable resources. Offering and leasing public land that is unlikely to ever produce oil and gas is a waste of our tax dollars and our public lands.

Responsible energy development and fiscal responsibility are not mutually exclusive. Curbing speculation, updating royalty rates, maintaining stronger bonding requirements, and tightening oversight should be common sense measures in our federal leasing system.

Learn more about federal oil and gas leasing in Nevada in our recent report, No Dice in Nevada: Decades of Federal Leasing Have Cost Taxpayers

Note: Several minutes after the auction was completed, the results listed on Efficient Markets, the online platform that hosts competitive onshore oil and gas auctions, were changed. For each parcel, the Bid Status was changed from “No bids received” to “Cancelled” and the Closing Information was changed from “This Parcel is closed for bidding” to “This Parcel has been cancelled.” This analysis assumes that the lease sale was indeed held, not cancelled. TCS will continue to update it as new information comes to light.