The Biden administration will postpone Wyoming’s first-quarter oil and gas lease sale.
Originally scheduled for the week of March 15, the lease sale will take place at a later date, the Bureau of Land Management told the Star-Tribune on Friday. The agency had originally announced plans to offer 383 parcels across about 483,017 acres in Wyoming.
The delay will provide the new administration with time to “get up to speed” and “go over environmental reviews” related to the sale, a spokeswoman at the BLM Wyoming office explained.
The BLM holds lease sales four times a year in states across the West, auctioning off parcels of federal minerals to oil and gas companies for development.
But the practice has garnered significant attention in recent weeks, after President Joe Biden issued an executive order on Jan. 27 directing the Interior Department to stop issuing new leases to oil and gas firms.
The order threw Wyoming’s first-quarter sale into question and came on the heels of a separate secretarial order requiring senior officials to approve any new leases and permits.
Allies of oil and gas operators here have maintained the agency has a legal obligation to regularly offer authorized parcels in the competitive lease sale.
“Obviously, we believe lease sales need to go forward quarterly, as provided in statute and would hope that the BLM would honor those obligations,” said Ryan McConnaughey, communications director for the Petroleum Association of Wyoming. “Some of our small to mid-size operators don’t have luxury of applying for parcels of land and leases in great numbers, so this could really impact our smaller lease operators disproportionately if it does not allow them to access opportunities for drilling in Wyoming.”
The federal government manages 13,270 authorized leases in Wyoming, as of Jan. 28. These leases cover a total acreage of 8.8 million acres. The Interior Department has said drilling activity can continue on these existing leases.
This isn’t the first time an oil and gas lease auction has been postponed. The Trump administration delayed a June sale due to the COVID-19 pandemic. Some parcels nominated for the June sale were included in later sales.
Federal mineral extraction provides significant tax revenue to states like Wyoming, flowing from these lease sales, federal royalty payments, severance taxes and ad valorem taxes. In addition, oil and gas companies must pay property taxes, as well as sales and use taxes.
In the last four years, the BLM has collected over $438 million from lease sales in Wyoming. About half of that money has come back to the state. But leasing activity did slow last year when oil prices nosedived and the pandemic hit.
But the federal leasing program has faced scrutiny from taxpayer advocates and conservation groups. Some have called on the federal government to charge more money for leasing public lands, or place additional weight on the costs drilling poses to the climate before leasing.
“We are pleased the Biden administration announced the postponement of the upcoming oil and gas lease sales,” Autumn Hanna, vice president of Taxpayers for Common Sense, said in a statement. “Instead of adding more leases to the pile, this decision will give the administration time to ensure that our public lands policies are reformed to ensure a fair return for taxpayers. We applaud the administration’s commitment to stop the waste and look forward to concrete next steps to bring the federal leasing system into this century.”
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