A view of oil and gas development on Bureau of Land Management lands in Colorado, on July 11, 2017. (Bob Wick/BLM/Public domain)
While it often feels like there’s more dividing than uniting us, vast majorities of Coloradans across political, racial and demographic lines strongly believe we should be protecting our state’s public lands.
Polling conducted earlier this year shows nearly 4 out of 5 Colorado voters believe we should strictly limit or entirely stop oil and gas drilling on public lands.
A November report from the U.S. Department of the Interior gives Colorado’s delegation in Congress some guidance for how they can follow the will of the voters and better protect our public lands. In the report, the department conducted a review of federal oil and gas leasing and permitting practices and provided recommendations for improving the system.
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The report found that the current federal oil and gas leasing program is outdated and broken. It benefits oil and gas companies at the cost of harm to public lands and habitats, exacerbates climate change, and causes us to spend public money that could otherwise be invested in schools, roads and other priorities.
Under current law, the Bureau of Land Management holds regular lease auctions to oil and gas companies. The law also calls for the highest bidder to pay a minimum bid of $2 per acre.
Unfortunately, many times when the auction period ends without any bids, the unsold parcels are allowed to be sold to the first bidder at a minimum rate of $1.50 per acre.
This practice of “non-competitive” leasing creates incentives for companies not to participate in auctions and acquire land later. The DOI report recommends increasing this minimum bid amount to limit speculations and to provide more tax revenue.
Before production can begin on public lands, oil and gas companies are required to pay an annual rent amount of $1.50 per acre. Since this is very low, many of the parcels sit unused. According to BLM, 47% of the nearly 21 million actively leased acres in the western United States are currently sitting idle, including more than 946,000 acres in Colorado.
After production begins on leased land, BLM receives royalties — a share of production value — from producers. This rate, currently 12.5%, hasn’t increased in 100 years. It’s also significantly lower for new leases on federal land than new leases on private lands (18%-19%) or state trust lands (20%) in Colorado.
Updating the federal royalty rate to 18.75% would have a negligible impact on production levels and consumer energy prices, and it could raise up to $2.1 billion per year in additional revenue that could help individuals and communities by investing in schools, infrastructure and health care.
However, the report does not address climate change or contain any specific climate recommendations in relation to federal oil and gas leasing. Damage from climate change was estimated at $100 billion in 2020, and burning fossil fuels extracted from federal public lands accounts for 20% of greenhouse gas emissions in the U.S.
We need bold climate action now.
While there will be far more work to do, the budget reconciliation bill, also known as the Build Back Better Act, addresses many of these issues. It will do more to protect our public lands from the impact of oil and gas drilling and ensure oil and gas companies pay the full costs of their operations. Build Back Better also includes historic and badly needed investments and policies to limit much of the pollution driving climate change.
Congress should move quickly to pass it, and then turn its attention to protecting our climate and way of life before it’s too late.
Coloradans are counting on it.
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