On November 28^th 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 Wyoming. The sale offered more than 35,000 acres of federal land for oil and gas development across 37 parcels.

This was the third oil and gas lease sale held in Wyoming in 2023. In June, 69,149 acres of federal land were sold, generating a total of $14.8 million in revenue for state and federal taxpayers. In September, BLM sold an additional 35,701 acres of federal land, generating $13.2 million in total revenue.

In today’s sale, the Bureau of Land Management sold leases in more than half of the parcels, covering 21,495 acres. Just under half of the parcels sold, representing 9,864 acres, were acquired at the minimum bid of $10 per acre. The lease sales generated $3.4 million in total revenue, which is shared between federal and state taxpayers. This represents a decline in average bid per acre compared to the previous two lease sales offered this year, $211/acre and $376/acre respectively.

All lease sales in 2023 have included important reforms made in the Inflation Reduction Act (IRA), including:

• A federal onshore royalty rate of 16.67% (raised from 12.5%)
• Rental rates of $3/acre for the first 2 years, $5/acre for years 3-8, and no less than $15/acre for years 9-10 (raised from $1.50/acre for years 1-5 and $2/acre for years 5-9)
• Minimum bid of $10/acre (raised from $2/acre)

These reforms are an important step in bringing onshore federal oil and gas leasing into the 21^st century. For too long, the outdated federal leasing system cost Wyoming taxpayers millions in potential revenue and left the state with a growing number of abandoned oil and gas wells. In a report TCS released earlier this year, we detail how federal and Wyoming taxpayers lost $3.8 billion in potential revenue over the last decade due to outdated rates and fees. The reforms implemented in the IRA are an important step towards securing taxpayers a fair return from valuable, taxpayer-owned resources.

The BLM’s proposed leasing rule would codify the fiscal reforms made in the IRA and implement other needed changes, such as improving oil and gas bonding requirements. Outdated bonding requirements have long left taxpayers with unnecessary economic and ecological risk. Additionally, the rule would help direct leasing to appropriate locations and increase processing fees, allowing the BLM to cover the cost of administering the federal oil and gas program.

So far this year, 285,000 acres of federal land have been offered for oil and gas development of which 155,614 acres have been leased. Additional lease sales in New Mexico, Oklahoma, Nevada, and North Dakota will be held later this month and in December.