Like Giving Late Homework an A++: Suspended Leases are Costing Taxpayers Millions Annually

A new report released today finds that the Bureau of Land Management (BLM) has been turning a blind eye to delinquent leaseholders—costing taxpayers tens of millions of dollars in the process.

The report, entitled “Lease Hoarders: How Stockpiling Leases is Costing Taxpayers,” details how poor agency decision-making and inadequate tracking, monitoring, and transparency have all contributed to allowing more than 3 million acres of public lands to be locked up by suspended leases. For context, that’s nearly 10% of all the federal minerals currently under lease by the oil and gas industry.

How do these lease “suspensions” work? In general, suspensions are used when there’s been a hold-up in development through no fault of the lessee—for example, in the case of environmental reviews. These lessees are granted an extension on the normal ten-year term of the lease, and they’re often excused from paying rent on the lease.

But industry has been seeking, and the BLM routinely granting, suspensions for delays that aren’t legitimate—extensions for late homework, so to speak. Making matters worse, according to the report, BLM rarely tracks and monitors the suspensions they grant, meaning they can last indefinitely for no good reason, well after the conditions that justified the suspension no longer exist.

And keep in mind that many suspended leases aren’t producing any kind of rent or revenue for taxpayers. Just counting the leases that are currently suspended, BLM has lost out on over $80 million in tax revenue from just rental payments. Utah alone has nearly one million acres of suspended leases, and New Mexico taxpayers have lost over $1.3 million on leases suspended before 1980—more than 30 years ago.

The bottom line is that this type of lease mismanagement is a lose-lose situation for American taxpayers: they’re deprived of valuable revenue at the same time as they’re locked out of their own public lands. It’s time to reform this broken system and ensure that suspensions are granted for the right reason and with appropriate agency and public oversight—so that taxpayers can earn a fair share on our American public lands.

You can read the full report here.

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