Taxpayer, conservation groups pressure U.S. to halt drilling auctions

FILE PHOTO: Oil pours out of a spout from Edwin Drake's original 1859 well that launched the modern petroleum industry at the Drake Well Museum and Park in Titusville, Pennsylvania U.S., October 5, 2017. REUTERS/Brendan McDermid/File Photo

(Reuters) - U.S. taxpayer and conservation groups on Tuesday urged the Trump administration to halt plans to sell oil and gas leases on more than 300,000 acres (120,000 hectares) of public lands this month after a sale in Nevada drew mostly minimum bids from a weakened drilling industry.

The small Nevada auction was the first of six sales the U.S. Bureau of Land Management will hold this month as it resumes its leasing program following a five-month pause due to the coronavirus pandemic.

Of the 11 parcels offered on Tuesday, seven sold for the minimum bid of $2 an acre. The remaining four sold for under $10 an acre. The sale of more than 15,000 acres raised about $63,000 in total bids, according to results posted on the online auction website EnergyNet.

Oil and gas drilling on public lands is a key part of the Trump administration’s efforts to boost domestic energy production. Joe Biden, who is challenging President Donald Trump in the November election, has vowed to ban new drilling permits on federal lands and waters.

Critics said upcoming sales are unlikely to generate fair returns for taxpayers because the oil and gas industry is struggling with sharply lower prices and demand.

“Continuing this leasing binge is nothing short of fiscal lunacy,” Dave Jenkins, president of conservation group Conservatives for Responsible Stewardship, said on a conference call with reporters.

Jenkins’ group and federal budget watchdog organization Taxpayers for Common Sense and the National Wildlife Federation are urging Interior Secretary David Bernhardt to cancel sales later in the month in Wyoming, Montana, Colorado, Utah and several other states.

A spokesman for the BLM, Chris Rose, said the agency would let market forces determine whether companies would bid on available parcels.

“Our mandated oil and gas lease sales and royalties continue to propel America’s economy,” Rose said in a statement, adding that land parcels in Nevada typically sell for the minimum bid.

Reporting by Nichola Groom; Editing by Tom Brown and Steve Orlofsky