Bill ends non-competitive oil and gas leasing on public lands
This week President Joe Biden signed U.S. Senator John Hickenlooper’s second bill into law, the Competitive Onshore Mineral Policy via Eliminating Taxpayer-Enabled Speculation (COMPETES) Act, which was incorporated into the Inflation Reduction Act. The bill will prevent oil and gas companies from leasing taxpayer-owned public lands for next to nothing. Forty percent of acres currently leased for drilling go through this non-competitive process.
“The COMPETES Act is a win for taxpayers, outdoor recreationists, and anyone who values public lands in the West,” said Hickenlooper. “Non-competitive leasing encouraged speculation on lands that could be conserved for all to enjoy. We’re thrilled this commonsense bill is now law.”
Under previous law, the Bureau of Land Management (BLM) was required to offer up federal lands that fail to attract bidders in oil and gas leasing auctions through a non-competitive leasing process for only $1.50 per acre, far less than the usual rate at auction. This led to abuse by allowing companies to nominate lands for auction with no intention of bidding on them, only to acquire them later at a minimal cost.
When public lands are leased and managed by BLM for production, that land is often not managed for outdoor recreation, conservation or other uses; all uses important to Colorado. Instead, taxpayers are on the hook for oil and gas companies’ speculation on public lands.
The Inflation Reduction Act also includes broad reforms to the federal oil and gas leasing system, raising the minimum royalty on offshore oil and gas from 12.5 percent to 16.66 percent.
Hickenlooper’s COMPETES Act was co-sponsored by U.S. Senators Martin Heinrich and Jacky Rosen.
It had a broad swath of supporters including:
- Coalition to Protect America’s National Parks
- Colorado Wildlands Project
- Conservation Colorado
- Conservation Lands Foundation
- Friends of the Earth
- Friends of the Missouri Breaks Monument
- Grand Canyon Trust
- Hispanics Enjoying Camping, Hunting and the Outdoors (HECHO)
- League of Conservation Voters
- League of Oil and Gas Impacted Coloradans (LOGIC)
- Montana Wildlife Federation
- National Parks Conservation Association
- National Wildlife Federation
- Natural Resources Defense Council
- Nevada Wildlife Federation
- Public Citizen
- Public Land Solutions
- Rocky Mountain Wild
- The Wilderness Society
- Western Organization of Resource Councils
- Western Colorado Alliance
- Wild Montana
- Wilderness Workshop
- Upper Missouri Waterkeeper
A 2020 Government Accountability Office report found that roughly 99 percent of lands leased non-competitively never produced oil or gas in paying quantities. They are leased so non-competitively, that these lands generated less than two percent of federal royalties, despite accounting for nearly 40 percent of acres leased.
With the passage of the COMPETES Act, it ends the process of non-competitive leasing and frees more public lands for outdoor recreation, conservation, and other uses.
Featured image: View over the Arkansas River toward the Sangre de Cristo Wilderness. During the Trump administration this area was considered to be opened for oil and gas exploration. Photo EcoFlight.