In Praise of the Pause
President Biden’s executive order pausing oil and gas leasing gives us a chance to finally reform a broken system
For the last several years, the Bureau of Land Management has been holding a near-perpetual fire sale of public lands in Montana, auctioning off millions of acres to the lowest possible bidders.
Indeed, our oil and gas leasing system, which hasn’t been updated in decades, is broken. It’s high time to reform it so that the BLM can shift its focus towards conservation and an industry that isn’t plummeting, but is only getting stronger and stronger – our $7 billion outdoor recreation industry.
That’s why we applaud the executive order that President Biden signed today, pausing all oil and gas leasing on public lands. This will give the Biden administration and Congress time to enact new policy and pass laws that will reform the country’s oil and gas leasing system and steer management of public lands toward improving wildlife habitat, monitoring water quality, and maintaining and building public land infrastructure, such as trails, trailheads, fishing access sites, boat ramps, and many other things that are critical for Montana’s outdoor way of life.
Steering management toward conservation and maintenance will also help create more jobs and support more businesses that rely on our outdoor recreation economy – driven as it is by hunting, fishing, hiking, wildlife viewing, and other activities that, all in all, generate some $7 billion a year for our state.
Currently, 65% of all oil and gas leases in Montana, covering 1.2 million acres of public lands, are not being used. That’s primarily because there is very little oil and gas potential on public lands in Montana. A shocking case in point: there isn’t a single oil rig in the state that’s currently operating.
But that low potential hasn’t stopped the BLM from offering up hundreds of leases in recent years at regularly scheduled auctions. During the Trump administration, the BLM offered up 442,000 acres in Montana for oil and gas development. Thirty percent of the leases the BLM auctioned off during that time went for the minimum bid of $2 an acre. Many leases not bid on were sold noncompetitively for $1.50 an acre. In fiscal year 2018 alone, the BLM leased more than 262,000 acres of public lands in Montana for that amount.
Last summer, Sen. Jon Tester introduced a bill that would go a long way toward reforming our oil and gas leasing system. Called the Leasing Market Efficiency Act, the bill would put an end to noncompetitive leasing.
Also in desperate need of reform are bonding rates to cover reclamation costs for plugging and cleaning up all producible wells on federal lands. Center for Western Priorities estimates that it could cost a potential $6.1 billion to reclaim lands on which leases have been developed, exceeding the $162 million in reclamation bonds that the Government Accountability Office last estimated our country has collected from oil and gas producers.
According to the Western Organization of Resource Councils, there are 57,000 unplugged wells across the West, 16,000 of them in Montana. Of those, 215 have been abandoned, with no company to hold accountable for them.
Making matters worse, the royalty rates paid to local communities from nearby oil and gas production is woefully out-of-date. Taxpayers for Common Sense estimate that Montanans lost out on approximately $56 million in rental revenue on federal oil and gas leases between FY 2009-2018.
America’s current oil and gas leasing system is working against the American public and only serves Wall Street investors and wildcat speculators. We appreciate President Biden giving us a break while we take a hard look at this system and can move forward with meaningful reforms to protect our wildlife and water and boost our economy.
Please add your name to our open letter to President Biden, thanking him for taking this bold, necessary step for much better management of public lands in Montana and across the country.
Eastern Montana Field Director
Aubrey works with communities to protect eastern Montana’s prairies, badlands, and island mountain ranges. She spends her time skiing, hiking, and running, volunteering with civic organizations in Billings, exploring public lands with her two dogs, and napping on the couch with her two cats.