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Oil and gas leasing system is holding Montana back

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For the last several years, the Bureau of Land Management has been holding a near perpetual fire sale of public lands in Montana, selling out hundreds of thousands of acres to the lowest bidders.

Our broken oil and gas leasing system has not been updated in decades, and it’s holding Montana back, depriving us of what we need to create more jobs in the biggest sector of our economy and protect public lands from mismanagement and neglect. It’s high time to reform the system so the BLM can shift its focus from an industry that is plummeting towards one that is thriving — our $7 billion outdoor recreation economy.

That’s why we applaud the executive order that President Biden signed recently, pausing all oil and gas leasing on public lands. This will give the new administration and Congress time to enact new policy and pass laws that will reform the country’s oil and gas leasing system, and steer management of public lands towards bolstering conservation, improving public land access, and supporting business and economic opportunities that fuel our outdoor recreation economy.

Currently, 65% of all oil and gas leases in Montana, covering 1.2 million acres of public lands, are not being used. That’s primarily because there is very little oil and gas potential on public lands in Montana. A shocking case in point: there currently isn’t a single operating oil rig in the state.

But that low potential hasn’t stopped the BLM from selling out our public lands to wildcat speculators. During the Trump administration, the BLM offered up more than 442,00 acres of public lands in Montana for oil and gas development. Thirty percent of the leases the BLM auctioned off during that time went for the minimum bid of $2 an acre — a rate that hasn’t been updated since 1987. Many leases not bid on were sold non-competitively for $1.50 an acre. In fiscal year 2018 alone, the BLM leased more than 262,000 acres of public lands in Montana for that absurd amount.

These bottom-basement leases almost never result in oil and gas production. They almost never create any jobs. Nor do they generate any royalties or other significant economic return. These leases benefit only those who bought them to pad their investment portfolios and attract investors.

Though these leases serve no public good, the BLM has little choice but to sink taxpayer money into processing and administering them. That’s government spending that could go towards improving wildlife habitat, monitoring water quality, and maintaining and building trails, trailheads, fishing access sites, boat ramps, and other infrastructure that improves access and supports our outdoor recreation economy.

Last summer, U.S. Sen. Jon Tester introduced the Leasing Market Efficiency Act that would go a long way towards reforming our oil and gas leasing system and put an end to noncompetitive leasing.

Also in desperate need of change are the bonding rates that cover the reclamation costs for plugging and cleaning up producible wells on public lands. The Center for Western Priorities estimates it could cost a potential $6.1 billion to reclaim lands on which leases have been developed, eclipsing the $162 million in reclamation bonds that the Government Accountability Office last estimated our country has collected from oil and gas producers.

According to the recent report from the Interstate Oil and Gas Compact Commission, there are 16,000 unplugged wells in Montana. Of those, 215 have been abandoned by their owners, leaving taxpayers with the bill of cleaning up the mess.

Montanans and our public lands deserve so much better than what the current, antiquated leasing system allows. Let’s reform the system, for the good of our communities, our economy and our outdoor way of life.

Marne Hayes is executive director of Business for Montana’s Outdoors. Aubrey Bertram is the eastern Montana field director at Montana Wilderness Association.

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