4 ms·

You might think so, but the lease purchase isn't exactly competitive. I did some poking around and, anecdotally, the lowest lease I could find was $11-$27/acre

You might think so, but the lease purchase isn't exactly competitive. I did some poking around and, anecdotally, the lowest lease I could find was $11-$27/acre last year in California (https://www.reuters.com/article/usa-drilling-california/u-s-nets-46000-on-trumps-california-oil-gas-drilling-auction-idUSKBN28K1G2 https://www.reuters.com/article/usa-drilling-california/u-s-...). The highest was $15,000/acre (https://www.reuters.com/article/us-usa-trump-drilling/drillers-turn-out-for-last-chance-to-nab-federal-acreage-under-trump-idUSKBN29J1HS https://www.reuters.com/article/us-usa-trump-drilling/drille...) (Last year was a bad one for petroleum capitol expenses.) Overall, the BLM had 26,600,000 acres under lease in 2020 (down from 47M in 2008) (https://www.blm.gov/programs-energy-and-minerals-oil-and-gas-oil-and-gas-statistics https://www.blm.gov/programs-energy-and-minerals-oil-and-gas...) and received an average of $444,000,000 ("Total Receipts: The total amount of money generated from the Competitive Oil and Gas Lease Sale. This includes rents, bonuses, and administrative fees.") per year over the last 4 years or about $17/acre. (https://www.blm.gov/programs/energy-and-minerals/oil-and-gas https://www.blm.gov/programs/energy-and-minerals/oil-and-gas) BLM royalties, well, it's a confusing article. (https://www.blm.gov/programs/energy-and-minerals/oil-and-gas/about https://www.blm.gov/programs/energy-and-minerals/oil-and-gas...) Being generous, the BLM received $4B in 2018 on roughly the same 26M acres; that is $153/acre. For comparison, the Nature Conservancy received about $1B in 2019 (https://www.nature.org/en-us/about-us/who-we-are/accountability/annual-report/2019-annual-report/ https://www.nature.org/en-us/about-us/who-we-are/accountabil...). According to the paper you link to, the value of the petroleum was $269B (total value) and state/local tax revenues and the states' share of federal leases were about $28B (~10% tax rate; not bad).[1] Unfortunately it doesn't have the acreage that produced it. Being really, incredibly conservative and assuming the only land involved is BLM's 26M acres, that's $1077/acre. [1] According to the BLM, states receive half of its revenue; according to that paper, that amounted to $1.5B in 2013 which seems pretty reasonable according to the BLM numbers above.

neltnerb 5y ago
So if you're a big enough company that you can basically assume that a lease will be available whenever you want (which makes sense for a large number of leases, turnover must exist), you just bid enough to justify it once something looks worth the risk. And until it's worth the risk, leasing it is just a donation since no one would be trying to extract things from it anyway. It does start to sound like a corporate giveaway where only big companies ever really win. On a per-parcel basis it seems like it is beneficial (i.e. a local group maybe can keep a particular area protected), but on aggregate it doesn't seem likely to do much. The companies that want to extract resources have many options and lots of time to wait.

neltnerb 5y ago

So if you're a big enough company that you can basically assume that a lease will be available whenever you want (which makes sense for a large number of leases, turnover must exist), you just bid enough to justify it once something looks worth the risk. And until it's worth the risk, leasing it is just a donation since no one would be trying to extract things from it anyway. It does start to sound like a corporate giveaway where only big companies ever really win. On a per-parcel basis it seems like it is beneficial (i.e. a local group maybe can keep a particular area protected), but on aggregate it doesn't seem likely to do much. The companies that want to extract resources have many options and lots of time to wait.