The Interior Department plans to resume its auction of oil and gas drilling rights, the first since March, of more than 500,000 acres of federal land, including some in northwest Oklahoma.
The sales will begin Aug. 26 and continue over the next six weeks reported Bloomberg Law.
Environmental groups are calling the lease upcoming lease sales a last-minute land rush for the oil industry prior to the November election. But oil industry group say the auctions are necessary to ensure the security of future jobs.
The Bureau of Land Management, part of Interior, will begin a series of nine oil and gas lease sales nationwide starting Aug. 26, auctioning the drilling rights to more than 535,000 acres of federal public land and minerals in 13 states from Nevada to Michigan.
The auction will cover leases of federal land in three Oklahoma counties—Ellis, Custer and Dewey, all in the northwest part of the state. The largest tract is 58.60 aces in Dewey County where the minimum bid is $2 an acre or $378.27 including an administration fee. The trat is located at T. 19N R. 15W in Dewey County.
Nearly 30 acres will be auctioned for lease in Ellis County at T. 18N R. 21W, also with a minimum $2/acre bid or $275.90.
In Custer County, the BLM will auction a lease for 16.55 acres at T. 15N R. 14W with a minimum bid of $1 an acre or $230.01.
Amid the coronavirus pandemic and economic turmoil in the fossil energy industry, the land bureau canceled all oil and gas lease sales it had previously scheduled for the summer.
“While 2020 has been a challenging time for the industry, the world will continue to demand more energy in the long-run, not less,” said Lem Smith, a vice president of the American Petroleum Institute.
“Every lease sale is also an opportunity to deliver economic boosts to the states where they are held while simultaneously adding to U.S. energy security,” Smith said.
Lease sales scheduled through the end of September will affect land in Michigan, Alabama, Mississippi, Louisiana, Texas, Oklahoma, New Mexico, Colorado, Utah, Wyoming, North Dakota, Montana and Nevada.
The planned summer lease sales were to take place in states across the West, including Colorado, where the last federal lease sale was held March 26. The leases in that sale either received no bids or sold for the lowest possible price of $2 per acre.
Of the 20 Colorado parcels included in the auction, nine received bids from energy companies. Once leased, companies have the right to drill for 10 years.
The bureau said in June that it was postponing some summer online lease sales due to pandemic-related safety reasons, not economic ones.
Land bureau officials declined to respond to detailed questions about why the summer lease sales were canceled and how market conditions may have contributed to the upcoming lease sales.
“Lease sales scheduled for June and July have been added to scheduled lease sales in August and September,” Christopher Tollefson, land bureau public affairs chief, said in an email Friday.
Source: Bloomberg Law