On March 18, the Bureau of Land Management (BLM), under the Department of the Interior (DOI), held an auction for oil and gas leases on federal land in Nevada. The sale offered twelve parcels, totaling 23,202 acres. Nine parcels, containing 75% of the acreage available at auction, were sold to a single bidder for $10 per acre, the lowest acceptable legal minimum bid. One additional parcel, containing 10% of the acreage available at auction, was sold for $12 per acre.

This was the fourth federal onshore lease sale of 2025. Pervious sales were held in New Mexico, Montana and North Dakota, and Wyoming.

During onshore oil and gas lease sales, interested companies have to offer bids higher than the legal minimum of $10 per acre, with the highest bidder securing a lease that grants them the right to drill for oil and gas on federal lands. In locations with high potential for oil and gas development, lease auctions can garner lots of interest from the oil and gas industry, resulting in a competitive bidding process and significant revenue. However, in locations with little potential for development, like Nevada, lease auctions attract few bidders and generate minimal revenue for taxpayers. These sales may also lock valuable federal land into non-producing leases, keeping them from other productive uses like recreation.

Today’s disappointing lease sale results come as no surprise. Nevada has a history of sparse industry interest in federal lease sales. From 2011 to 2020, federal oil and gas lease sales in the state received an average bid of $10.81 per acre. This trend continued today, with nearly 20,000 acres leased in Nevada for an average bid of just $10.25 per acre.

Only 3 bidders participated in today’s auction. The majority of land leased—17,500 acres ­— went to a single bidder for the legal minimum of $10 per acre. Two other bidders expressed interest in a single, 2,433-acre parcel, with the winner securing the rights to develop oil and gas for just $12 per acre.

Today’s lack of bids is consistent with recent trends: Nevada’s sole lease sale in 2024 offered over 4,000 acres for oil and gas development but received no industry interest. And in 2023, one lease sale in Nevada received no bids, while the other attracted bids on less than a quarter of the acreage offered.

For decades, outdated oil and gas leasing policies—including noncompetitive leasing, low bid minimum bids, and no expression of interest fee—resulted in private entities or speculators acquiring leases on federal lands without the intention of ever producing oil and gas. Out of the 2,467 leases encompassing 6.2 million acres that were obtained through noncompetitive means in Nevada since 2000, none of them have ever entered production.

Recent, reforms helped modernize oil and gas development by ensuring companies pay competitive market rates and reducing financial risks for taxpayers. These changes include:

• Higher royalty rates: Increased to 16.67% from 12.5%, still lower than rates charged by states like Texas.
• Updated rental rates: $3/acre for the first two years, $5/acre for years 3-8, and no less than $15/acre for years 9-10 (up from outdated 1987 rates set under President Reagan at $1.50/acre for years 1-5 and $2/acre for years 6-9).
• Increased minimum bids: Raised to $10/acre from $2/acre set in 1987.
• Eliminated noncompetitive leasing: Ended the ability for companies to lease federal land the day after an auction without paying the minimum bid.
• Modernized bonding requirements: Updated bonding rates, adjusted for the first time since the 1950s and 1960s to better reflect market conditions and protect taxpayers from costly cleanup liabilities.
• More strategic leasing: Focusing on appropriate locations makes auctions more competitive and ensures oil and gas production benefits taxpayers.

However, more can be done to ensure taxpayers a fair return from the leasing federal lands and development federal oil and gas resources.

Leasing federal land with low oil and gas potential results, like in Nevada, results in lost revenue for taxpayers, while tying up valuable public lands, making them unavailable for other productive uses. Smart leasing practices can support domestic energy production, raise important revenue for taxpayers, and protect us from future costs. Focusing leasing efforts on locations with higher development potential reduces speculative leasing and minimizes the idle acreage held by oil and gas interests, yielding greater returns for taxpayers.