Citing the success of its recent Eastern States online oil and gas lease sale, the US Bureau of Land Management announced on Oct. 13 that it would hold four more sales during December. The Western Energy Alliance (WEA) in Denver said it supports the move, especially in light of protests against the Dakota Access crude oil pipeline, threats to workers, and sabotage of other pipelines.
The agency is moving Montana's sale, originally set for Oct. 18, and the Colorado sale set for Nov. 10, to online auctions held on Dec. 8. A sale in Utah, originally scheduled for Nov. 15, and another Eastern States sale, which was set for Dec. 8, will move to online auctions held on Dec. 13.
BLM said it moved to online sales under authority it received when Congress passed the Fiscal 2015 National Defense Authorization Act, which amended the 1920 Mineral Leasing Act to allow online auctions. This statutory change was followed by updates to regulations enabling the BLM to utilize either in-person or online auctions.
The legislative and regulatory changes were based on the results of a successful BLM online auction pilot in Colorado in 2009. Based on that sale's results, the agency estimated that internet-based auctions could increase aggregate lease sale revenues by about $2 million/year.
BLM said the Eastern States sale on Sept. 20 was the first auction under this new authority and was deemed very successful by several measures. Fourteen parcels were offered, totaling about 4,214 acres in Mississippi and Kentucky. There were multiple bidders on each parcel, generating $80,223.50 in total receipts, which will be split between the US Treasury and the state where the lease is located.
Online sales have the potential to generate greater competition and higher bonus bids by making participation easier, because bidders do not have to travel to a central location. Online sales also provide an opportunity to reduce administrative costs associated with lease sale activities and to provide greater transparency to the public. Observers may log on to the EnergyNet platform at energynet.com to see a sale as it progresses.
"The extremism we see from anti-oil and gas protesters, such as the vandalism and sabotage in North Dakota, is cause enough for BLM to hold leases sales online," said Kathleen Sgamma, WEA's vice-president of government and public affairs. "Keep-It-in-the-Ground protests of BLM lease sales are another reason. BLM Director Neil Kornze perceptively equated protesters' threatening actions to armed militiamen, and since his testimony their actions have only grown more dangerous."
She said, "We strongly support BLM rescheduling next month's lease sales and moving them online since it will increase safety and remove a platform for radical protesters who want to stop American energy production."
