Take back public lands from private corporations

For several decades now, oil and gas companies have been receiving a sweetheart deal from the federal government when it comes to leasing public lands across the West. That deal has come at the expense of the people who own those lands — you and me. It has also come at the expense of wildlife habitat, air and water quality, and the outdoor recreation economy.

Given how much Montanans depend on public lands and how little benefit the public currently receives from the oil and gas industry’s pervasive use of them, we support a proposed rule the Department of the Interior and the Bureau of Land Management recently released for public comment.

This rule would implement a number of reforms to the oil and gas leasing program passed in last year’s Inflation Reduction Act, reforms that will help ensure the program works for everyone, not just oil and gas companies. The reforms include:

Holding oil and gas companies responsible for capping oil and gas wells and cleaning up the sites after production has ended.

Ensuring taxpayers receive a fair return on private industry’s use of land and resources that belong to all of us.

Ensuring that companies can no longer get away with paying as little as $1.50 an acre for leasing public lands.

Left uncapped, oil and gas wells leak methane, benzene, and other toxic chemicals that end up contaminating our air, water, and land. Incredibly, the Interior Department hasn’t raised the minimum bonding rate companies must pay to ensure the wells are capped and the sites reclaimed after production since 1954. That rate stands at $10,000 per well even though the cost to clean up a well site averages about $75,000 nationwide, with some jobs costing as much as $1 million.

With oil and gas companies paying such an inadequate bond rate, taxpayers are left on the hook for cleaning up the well site after companies walk away with the profits. To prevent that from continuing, the oil and gas rule would raise the minimum federal bonding rates to better reflect the true costs of cleaning up well sites. Under this rule, that bond would increase to a minimum of $150,000 per well, incentivizing companies to do the work themselves, or at least ensuring the BLM has plenty of cash on hand should a company fail to fulfill its responsibilities.

For decades, the oil and gas leasing program has stood in the way of the public receiving a fair return on the leasing and drilling of public lands. It has also stood in the way of the BLM being able to manage our public lands for multiple-use. The BLM used to require a minimum bid of $2 an acre at lease auctions, a rate that, until the Inflation Reduction Act passed last year, hadn’t changed since 1987. That created a situation that allowed predatory speculators to scoop up the leases on hundreds of thousands of acres of public lands in Montana for pennies on the dollar. With those lands essentially locked up, the BLM hasn’t been able to effectively manage those lands for hunting, fishing, conservation, or in any other way that benefits the public.

Thankfully, the Inflation Reduction Act raised the minimum bid to $10 an acre. It also raised the royalty rate from 12.5% to 16.67%. The proposed BLM rule would codify those rates and require the Interior secretary to increase them in accordance with inflation. But we’re calling on the Interior Department to adjust the rule so it compels the Interior secretary to ensure these rates remain also on par with current economic conditions and with the true costs associated with oil and gas leasing and development in the future.

The proposed rule would, once and for all, also put an end to the insidious practice of noncompetitive leasing, which allows leases not bid on at auction to be sold for $1.50 an acre. Though these cheap leases serve no public good, the BLM has had little choice but to sink taxpayer money into processing and administering them, leaving the agency with far fewer resources for taking good care of our public lands and providing the infrastructure we need to recreate on and enjoy them.

Please join us in support of this proposed oil and gas rule that will allow the BLM to manage our public lands for the greater public good, and not just for helping oil and gas companies turn a profit at taxpayer expense. You can comment on the rule now at www.wildmontana.org/ogrule.

Randy Hafer is cofounder of Billings-based High Plains Architects.