Federal oil and gas lease sales highest in 10 years

By Staff | February 12, 2018

Sales of oil and gas leases by the Bureau of Land Management (BLM) in 2017 increased 86 percent over the previous year, the agency reported. In addition, the nearly $360 million in revenue generated from the sales was the highest in almost 10 years.

"2017 was a big year for oil and gas leasing on federal lands, and these sales provide critical revenue and job growth in rural America,” said David Bernhardt, deputy secretary of the interior. “We will continue to work into the next year to identify and modify unnecessary regulations that impede responsible energy development."

BLM said the sale of oil and gas leases on federal lands advanced the Trump administration’s goal of promoting U.S. energy independence. Rights to 949 parcels covering 792,823 acres were sold last year.

Bonus bids from oil and gas leasing in calendar year 2017 came to more than $358 million in preliminary figures released by the BLM. This was the highest grossing sale year since 2008, when bonus bids came to $408.6 million. Sales in 2017 outpaced last 2016 sales of $192.5 million.

The BLM conducted 28 lease sales around the nation in 2017. In comparison, the agency held 20 onshore oil and gas leases in 2016. During September in New Mexico, BLM had the largest sale of the year, generating approximately $130.9 million in bonus bids. A BLM Wyoming sale in February generated $128.9 in total bonus bids.

Fifty percent of revenue from lease sales goes to the state where the activity occurred, while the rest goes to the U.S. Treasury. If the leases result in producing oil or gas wells, revenue from royalties based on production are also shared with the state.

A bonus bid is a one-time payment in exchange for exclusive access to explore a parcel and grants an exclusive lease for a set period of time. The BLM awards oil and gas leases for a term of 10 years and as long thereafter as there is production of oil and gas in paying quantities.

The BLM said that in fiscal year 2016, oil and gas development on agency-managed lands supported 201,000 jobs nationwide and contributed more than $42 billion in output to the U.S. economy.

"These results are hard proof that our sound energy policy is working for both public lands and Americans in terms of reliable power and job growth opportunities," said Brian Steed, BLM deputy director for policy and programs.