U.S. holding slew of new drilling lease sales despite oil market slump
The Trump administration is moving ahead with oil and gas lease sales in four Western states beginning on Tuesday, bucking criticism from taxpayer advocates who say the auctions should be postponed because of a meltdown in energy prices.
The Bureau of Land Management is offering more than 210,000 acres (85,000 hectares) for leasing via online auctions in Wyoming, Nevada and Montana on Tuesday, and Colorado on Thursday.
The largest sale is for 105 parcels covering 118,292 acres (47,871 hectares) in Wyoming, the top U.S. state for gas production on federal lands and the second-biggest for oil production, according to the U.S. Energy Information Administration.
In Nevada, BLM will offer 45 parcels covering 70,110 acres (28,372 hectares) and in Montana it will auction eight parcels covering 5,180 acres (2,100 hectares). The Colorado sale is for 20 parcels on 18,960 acres (7,670 hectares).
Drilling on federal lands is a crucial part of President Donald Trump’s “energy dominance” agenda to maximize domestic production of fossil fuels. But the industry is in crisis as countries including the United States take unprecedented steps to contain the coronavirus pandemic that has curbed demand for products such as gasoline and jet fuel.
U.S. oil prices have dropped roughly half since the middle of February to about $24 a barrel.
Last week, the United States held an auction for oil and gas leases in the Gulf of Mexico that generated the lowest total of high bids for any domestic offshore auction since 2016. Earlier this month, BLM held a lease sale in Utah that received mostly minimum bids of $2 an acre.
“In this environment, it is impossible for the American taxpayer to expect anywhere near a fair return on oil and gas leases,” Taxpayers for Common Sense, a federal budget watchdog organization, and Conservatives for Responsible Stewardship, a non-profit conservation group, said in a joint statement last week.
Department of Interior spokesman Conner Swanson did not respond to a request for comment on Monday. Last week, he said lease sales were “being evaluated on a case-by-case basis.”
BLM is a division of the Interior Department.
Source: Reuters (Reporting by Nichola Groom in Los Angeles; Editing by Peter Cooney)