Rigged: Industry already has the keys to the kingdom

Two weeks ago, in an eleventh-hour decision, the Bureau of Land Management (BLM) bowed to opposition from Governor Herbert of Utah, several communities in southwestern Utah and 25 local businesses – not to mention over 40,000 members of the public – and pulled three proposed oil and gas leases on the doorstep of Zion National Park.  It was the right decision, but make no mistake –had local officials, businesses and concerned citizens not engaged, this dangerous proposal would likely have gone forward.

But how did we even get to a point where the BLM would even think about offering oil and gas leases on the doorstep of the most visited national park in Utah, which generated over $333 million for local communities in 2016, particularly when:

Because the system is rigged in favor of the oil and gas industry.  Oil and gas companies can nominate our public lands for leasing anywhere and anytime they want to – that is an irrefutable fact.  They do not need to have the financial or technical wherewithal to drill.  They do not need to show that there are actual oil or gas resources beneath the lands they nominate.  And they can freely target our communities, water wells, parks, hunting and fishing spots and biking and hiking trails.

It’s a free-for-all that threatens the precious water, wildlife and recreation resources that so many western communities, weary of the boom-and-bust cycles of the oil and gas industry, increasingly depend on for steady revenues and jobs.  It also encourages rampant speculation across public lands owned by all Americans and wastes taxpayer dollars.  And when industry does nominate these resources for oil and gas leasing, the burden falls on western communities – local officials and business and land owners – to justify why leasing is bad for their ranch, local economy or favorite hunting area.

The Leasing Free-for-All – Coming to An Elementary School, National Park, Grazing Pasture, or Recreation Area Near You!

There was that time industry tried to lease the majestic red-rock country featured on the State of Utah’s license plate – that was fun.  Or that other time industry asked to lease most of Palisade, Colorado’s municipal watershed.  Western Values Project documented several other notorious examples a couple of years ago – of industry nominating cemeteries, farms and schoolyards for oil and gas leasing.

Little has changed, unfortunately, as industry has already targeted a number of sensitive areas for oil and gas leasing in 2017, including:

“I’m Just Here for the Water.”

“I’m just here for the water.”  That is the sentiment that drove a Utah real estate agent to sally forth on a quixotic mission to (somehow) turn oil and gas leases into water rights.  It’s almost quaint, except that it’s not an isolated example.  Speculation is pervasive and just another by-product of a system rigged in industry’s favor.  In fact, of the companies that purchased oil and gas leases from BLM over the past decade, over half are “inactive,” according to state oil and gas agencies:

Companies Issued Leases by BLM (Past 10 Years)[1] Companies Issued Leases by BLM (Past 10 Years) – Not Recognized as Active[2] % of Inactive Operators
Colorado 142 89 63%
Montana 103 47 46%
New Mexico 122 84 69%
Utah 106 50 47%
Wyoming 434 209 48%
Total 907 479 53%

While some of these companies may very well partner with legitimate drilling companies, many will not.  They are just gambling with our public lands, hoping to flip their leases for a quick buck – and when leases sell for $2/acre, it’s house money they’re playing with and taxpayers who are losing.  These speculators will never step foot on their leases or bother reaching out to community leaders or property owners.  They’ll never stake a single well or make even one royalty payment to federal and state taxpayers.  Like the Utah real estate agent, they’re just here for the water.

Nah, Nevermind.

It’s an elegant system, if you’re an oil and gas company.  You don’t worry about doing much due diligence, because you’ve conscripted BLM employees into doing it for you.  And, of course, since there are no filing fees for oil and gas nominations, no penalties for nominating lands that don’t pass the sniff test and nominations can be made anonymously, you opt for a scattershot approach – a few nominations over here, a few more over there and so on.  And then you wait.  It’s no skin off your back because the heavy lifting falls to BLM – and anyone else who cares about keeping our western rivers clean, wildlife herds robust and national parks majestic.

Some time passes and, well, maybe prices don’t come up like you’d hoped, or you’ve found better opportunities elsewhere.  So, on the day of the sale, even though it was you who nominated these lands for leasing, initiating a review process funded with federal tax dollars, you say – nah, nevermind and don’t bother showing up.  Sound far-fetched?  Nope – in fact, it’s so common that in 2015, the oil and gas industry bought less than 24 percent of the leases offered for sale by BLM – leases that the industry itself had asked for.

But, surely, it’s different now, given the cozy ties between the administration and the oil and gas industry?  Wrong again.  Here are results from the last three lease sales held by BLM:

MT – June 13, 2017 156 49 31%
UT- June 13, 2017 20 8 40%
NV- June 14, 2017 106 3 3%
Total 282 60 21%

The problem isn’t a lack of opportunities – there’s obviously no shortage of those.  It’s the lack of a rational system for identifying public lands for oil and gas leasing – one that is driven not by the industry’s greed, but by what is best for our public lands and western communities.

[1] Data from BLM LR2000 – “Oil and Gas Leases Issued”, available at https://rptapp.blm.gov/menu.cfm?appCd=2.

[2] Data from Colorado Oil and Gas Conservation Commission, Montana Board of Oil & Gas, New Mexico Energy, Minerals and Natural Resources Department, Utah Division of Oil, Gas and Mining, and Wyoming Oil and Gas Conservation Commission.

Join the effort to strengthen the American West.