Nonprofits Call For Increased Oil, Gas Leasing Fees On Public Lands

Oct 4, 2019

A recent report from a pair of environmental advocacy groups says a third of the public lands leased for oil and gas development came with a price tag of $2 per acre or less.

The groups argue the current lease rate shortchanges taxpayers.

According to the report released on September 19 from the Center for Western Priorities and the Wilderness Society, the federal government leases over 1.8 million acres of public land in Montana to oil and gas companies for development. Fifty-seven percent of that land is leased for $2 or less.

Jesse Prentice-Dunn is the Policy Director for the Center for Western Priorities, a Denver-based nonprofit that advocates for responsible conservation and energy practices in the west.

"It’s really hard to access data about what’s going on with those oil and gas leases. So we did a first of its kind analysis to help the public see where this leasing is taking place and where there is some conflicts with a lot of our wild places and wildlife,"  Prentice-Dunn said.

Prentice-Dunn says almost half of leased acres remain unused by oil and gas companies. This means they only generate about $1.50 per acre for taxpayers annually. 66% of land leased by oil and gas in Montana sits idle.

Kim Stevens with the Wilderness Society, a nonprofit that advocates for wilderness protections, said raising base rates to $10 an acre could decrease the amount of unused land leased by oil and gas companies.

"We are hoping that we can see congressional action to make sure that our public lands are being managed for all Americans and not just one industry," Stevens said.

But Alan Olson with the Montana Petroleum Association says higher base rates for oil and gas leases could affect state, county and federal revenue.

"So if you’re going to raise the minimum price for a bid up to $10 an acre you’re probably not get some of this land leased. If you don’t lease the land, the state of Montana doesn’t get any revenue off of that regardless of if a well is made or not," Olsen said. 

Al Nash works with the Bureau of Land Management and says raising base rates for oil and gas leases could mean more money initially, but could limit opportunities for production revenue.

“It’s an extraordinarily complicated process. And I realize that those who aren’t intimately familiar with it find it a little hard to grasp how the process works and where those opportunities are for the taxpayer to benefit from the federal minerals,” Nash said.

The Center for Western Priorities and the Wilderness Society’s map and accompanying information also highlight different conservation efforts that are affected by oil and gas leases, including preserving sage-grouse habitat in Montana and Wyoming.

The groups say energy development has decreased the population of the sage-grouse by 30% since 1985.