Nevada’s public lands are used for many things — ranching, hunting, outdoor recreation, fishing and more. One use that doesn’t top the list is oil and gas development. That’s because Nevada, geologically a hardrock state, is mostly devoid of those fossil fuels. Thus, the vast majority of our public lands have zero drilling potential. To be more specific, out of the many millions of acres leased in our state over the past 20 years, only 3 percent produced any oil whatsoever.
Despite the lack of development potential, the oil and gas industry has leased swaths of our public lands that have sat idle for decades. This practice is known as speculative leasing. Today, more than 870,000 acres (95 percent of all acres leased) of our public lands are saddled with these unproductive leases that wrongly prioritize oil and gas development over multiple-use management that includes recreation and wildlife.
We applaud the Bureau of Land Management for its work to solve this problem. The bureau recently proposed common-sense reforms to modernize the federal oil and gas leasing program. The new policies will curb speculative leasing practices by prioritizing leases with high production potential. This helps ensure that oil and gas companies lease only where it makes geological sense.
This long-overdue move is critical for Nevada’s economy, since the state’s public lands are more valuable for other uses. In fact, in its most recent auction of federal land under the leasing program, none of the parcels offered received bids from oil and gas companies.
This is not the first time a lease sale in Nevada has received no bids. In 2018, the bureau offered about 300,000 acres of federal land in the Silver State and did not receive a single bid. With that dismal leasing record, it’s mind-boggling that just four years earlier, the bureau was asked by the industry to make 28 million acres of land in Nevada — more than half of the federal lands in the state — available for oil and gas leasing.
DOI’s proposed reforms, along with the End Speculative Oil and Gas Leasing Act, sponsored by Sen. Catherine Cortez Masto in the Senate and Reps. Susie Lee, Raul Grijalva (D-AZ), Jared Huffman (D-CA), Ted Lieu (D-CA) and Donald Beyer (D-VA) in the House, will ensure that continuous oil and gas leasing in Nevada, despite limited industry interest, does not continue to cost taxpayers millions of dollars in lost revenue and allow hundreds of thousands of acres of public land to be locked into non-producing leases. These changes are critical as the bureau plans to hold yet another lease sale in Nevada in December.
DOI’s proposed reforms also bring royalty rates and other fiscal policies in line with what states charge. A recent report from Taxpayers for Common Sense shows that in just the past 10 years, Nevada taxpayers have lost $34 million from outdated and below-market federal leasing terms. The new rates will ensure that taxpayers receive better returns on resources developed on our land.
Taxpayers have also been on the hook to clean up after the oil and gas industry for decades. Due to low bonding rates, oil and gas companies have left orphaned and abandoned wells for the state to clean up. Now, updated bonding rates will help ensure that the cleanup burden for orphaned wells will remain with the oil and gas companies should they go bankrupt — not taxpayers.
The Bureau of Land Management and the Biden administration must finalize these reforms as soon as possible to limit the harmful practice of speculative leasing and protect our taxpayers. Nevada’s iconic public lands should be better used for hunting, fishing and other outdoor recreation, and these proposed reforms will ensure that they can be enjoyed by many for years to come.
David Jenkins is the president of Conservatives for Responsible Stewardship. Russell Kuhlman is the executive director of the Nevada Wildlife Federation.