These are public resources that should be managed for the good of the American people.
Denver, CO (PRWEB) December 15, 2015
Misuse of a federal leasing tool is allowing companies to hoard America’s public lands and cheat tax payers out of millions of dollars according to public data detailed in The Wilderness Society’s report, Land Hoarders.
Oil and gas operators have made a habit of exploiting loopholes in a Bureau of Land Management policy known as “lease suspension.” These companies effectively take control of the lease out of the hands of public officials and off the books— stockpiling leases. Millions of acres of public lands sit in limbo under suspended leases and can remain that way for decades. At the same time, the American public is losing out on use of these lands and opportunities for conservation because they are tied up by the oil and gas industry.
“This misuse of a sometimes necessary tool is creating a number of problems and cheating taxpayers out of millions of dollars,” said Nada Culver, Senior Director for Agency Policy at The Wilderness Society. “A review of decades of suspension justifications found that while leases may be appropriately put on hold, the Bureau of Land Management’s current approach to granting and managing lease suspensions is flawed and must be fixed. A deeper investigation by Congress and others could find this problem to be even greater than what the limited public data shows."
Current law allows leases to be “suspended” so that the leases do not expire even while companies are not paying rent and are not required to make progress on developing energy resources that would then require royalty payments. This shortchanges taxpayers and blocks processes that are meant to prevent hoarding of our public lands by individual companies.
The Wilderness Society reviewed decades of suspension justifications and found that while leases may be appropriately put on hold, the Bureau of Land Management’s current approach to both granting and managing lease suspensions is flawed.
- 3.25 million acres of federal leases are currently held in suspension accounting for nearly 10% of the total federal minerals under lease by the oil and gas industry.
- Many suspended leases have been under suspension for decades. Of the 3.25 million acres of federal leases currently in suspension, 30% have been in suspension since before 1990.
Taxpayers and future generations have already lost out on more than $80 million in lost rents on these leases and the number continues to mount. Moreover, that $80 million doesn’t take into account royalties that would have been generated if those lands were in production.
“This is another example of industry dictating the terms of federal leases,” said Ryan Alexander, president of Taxpayers for Common Sense. “The Bureau of Land Management has a fiduciary responsibility to taxpayers to manage these lands in a way that ensures a fair return, not letting the fox guard the hen house. The agency’s cavalier extension of leases, in some cases for 25 years is unacceptable.”
Our review found that the BLM does not adhere to its own standards and policies, instead granting last minute requests by companies to suspend leases simply because they have failed to make sufficient efforts until their leases are close to expiration. For example:
- In Colorado, the BLM granted four lease suspensions for an Application for Permit to Drill (APD) filed at 5:03 p.m. on the first day of the month the leases were set to expire. Also in Colorado, 3 leases were granted suspensions to allow for NEPA review associated with an APD. Although the associated APD was received by the BLM approximately 35 days before lease expiration, and a suspension request letter was filed only four days after the APD, the BLM granted a suspension “due to an unforeseeable administrative delay,” which is clearly contrary to applicable legal standards.
- Similarly, in Utah, a lease was suspended based on a Notice of Staking (NOS)—a form completed prior to drilling—received approximately thirty-five (35) days prior to lease expiration even though the BLM’s guidance requires evidence that such activity “has been stopped by actions beyond the operator’s control.”
There are a number of steps that can be taken immediately to stop the hoarding of America’s public lands.
- The BLM must identify and end suspensions that are no longer justified and should have expired years ago.
- The Government Accountability Office (GAO) should initiate an investigation and produce a report to further define the scope of the problem and remedial actions.
- The BLM should issue new policy and training to guide future lease suspensions and ensure suspensions are only granted when truly needed and actively monitored and managed to ensure they end in a timely manner.
- The BLM should also issue a new policy requiring greater opportunities for public participation, transparency (including annual reporting) and oversight of both new suspension requests and existing suspensions.
“Lease suspensions were never intended to be a tool for the oil & gas industry to pad their balance sheets or keep leases until they feel like it’s the best time to develop them – these are public resources that should be managed for the good of the American people,” said Culver. “The BLM must update its lease suspension guidelines to protect American tax payers and our public lands.”
Land Hoarders Blog: https://wilderness.org/blog/land-hoarders-oil-and-gas-companies-are-stockpiling-your-public-lands
Land Hoarders Full Report: https://wilderness.org/sites/default/files/TWS%20Hoarders%20Report-web.pdf
Land Hoarders Fact Sheet: https://wilderness.org/sites/default/files/Land%20Hoarding-%202%20page-web.pdf