As wildfires exacerbated by climate change ravage the western United States, the Trump administration is fueling future climate disasters by continuing to hand over pristine public lands to private fossil fuel developers at breakneck pace.
That would be bad enough, but this fire sale of public lands is happening at arguably the worst possible moment for the American taxpayer: Global energy prices are at record lows, which means oil and gas developers are unwilling or unable to pay a fair price for access to these lands.
A normal approach to a decline in prices is to delay selling an asset until demand, and prices, recover. So a rational administration would look at the decline in demand for oil and gas leases and see it as an opportunity to hit pause and come up with a fiscally and environmentally smarter way to manage these lands.
Instead, the Trump administration is rushing ahead with these lease sales, locking in more harmful greenhouse gas emissions while failing to earn a decent return for American taxpayers.
Roughly 12 percent of the nation’s lands are managed by the Department of the Interior through its Bureau of Land Management, which sells leases to private companies allowing them to drill on specific parcels. Bidding starts at $2 per acre, but an often-used loophole allows developers to scoop up any unsold land leases after the auction for no fee at all. If drilling occurs, a 12.5 percent royalty is imposed on the revenues.
Interior briefly paused oil and gas lease sales over the summer due to Covid-19, but has since resumed them at a rapid pace. Over the past two weeks, the department has offered for lease over 100,000 acres of public land across nine states, predominantly in the West and the South, with six more sales scheduled before 2021. These sales open the door to drilling in habitats for endangered and threatened species in Montana, immediately adjacent to Fishlake National Forest in Utah and in the Arapaho National Wildlife Refuge in Colorado.
The lease sales defy economic logic. Oil prices have declined by one-third from prepandemic levels, which may dampen the oil market for years or decades to come. As a result, developers have drastically cut back on drilling and shown reluctance to invest in leasing. The bureau has not offered a rationale for why they are proceeding, but has said that market conditions do not determine the timing of its lease sales.
In a federal lease sale held last month for parcels in Nevada, most of the parcels either received no upfront bids or sold for the minimum bid of $2 per acre, causing a giveaway of over 10,000 acres for less than $90,000. Some lease sales in the spring fared even worse. And with drilling likely to be limited in the near term due to the pandemic-depressed oil market, expected royalty income is also low.
Meanwhile, for parcels already in development, the government has been granting frequent requests in recent months to sharply reduce the royalties paid by fossil fuel producers. Royalty payments make up the bulk of income that the federal government earns from leasing public lands. Allowing private companies to engage in environmentally harmful drilling at low cost means that taxpayers will wind up footing the bill for the resulting climate change and public health impacts of drilling
These giveaways have become the norm for the Trump administration. In one extraordinary example, it allowed a single company to obtain over 113,000 acres of federal land — the size of over 80,000 football fields — for under $190,000, less than the median price of an American home. The Trump administration offered more acres for lease in its first two years than were offered under President Barack Obama’s entire second term. Last year, the Trump administration offered 1.6 million acres, seven times the amount offered in 2016.
By leasing so much public land and granting developers a 5- to 10-year option to drill, the administration not only deprives the public of the land’s other beneficial uses — such as conservation, recreation and renewable energy development — but also ties the hands of future administrations to enact responsible climate policies.
This recklessness is reminiscent of an era at the turn of the 20th century deemed the “Great Barbecue” for the buffet of federal mineral, grazing and forest lands offered to settlers and prospectors for paltry fees, ultimately leading to rapid and wasteful resource exploitation. Congress and regulators eventually adopted a more rational conservation policy, resulting in the establishment of agencies like the U.S. Forest Service and Interior’s Bureau of Land Management that are directed to manage public lands for public benefit.
Today’s flurry of bargain fossil-fuel lease sales could be called a second “Great Barbecue” for creating the conditions for producing the heat-trapping greenhouse gases that fuel climate change. Already, U.S. public lands would rank fifth in the world for greenhouse gas emissions if they were their own country. Continuing to produce large amounts of federal coal, oil and gas contradicts what climate science says we must do to prevent catastrophic climate damages: transition rapidly away from producing and burning fossil fuels.
Opponents have occasionally succeeded in forcing Interior to press the brakes on its leasing plans; for instance, following a public outcry, Interior removed 87,000 acres of public land near Arches and Canyonlands national parks in Utah from its September lease sale. Many of the parcels would have impaired recreation, wildlife habitat and scenery in the picturesque Moab area — a proposal the city warned would harm the region’s tourism-heavy economy. Unfortunately, this example represents the exception rather than the norm.
Rather than doubling down on unprofitable and environmentally harmful leasing, Interior should halt this year’s remaining lease sales and begin to manage public lands to reduce climate risks — not exacerbate them. New strategies should include using public lands to increase carbon sequestration, recreation and conservation, as well as prioritizing renewable energy development and transmission. In 2019, the 96 utility-scale solar, wind and geothermal projects operating on public lands generated enough energy to power over 2 million homes, while paying millions to federal, state and local governments. Public lands already identified as suitable for renewable energy could accommodate hundreds more utility-scale solar and wind projects, conferring billions of dollars in capital expenditures and royalty payments.
Any major policy changes almost certainly hinge on a different administration taking office in 2021. But in the meantime, as a matter of basic economic rationality, Interior should at least end the current spate of needless fire sales of public lands.