BLM outlines quieter lease sales, industry points to new costs and uncertainty

The Bureau of Land Management told the Select Federal Natural Resource Management Committee that it has resumed quarterly oil and gas lease sales but is seeing far fewer acres and expressions of interest from operators.

In a presentation to the committee, Andrew Archuleta, BLM state director for Wyoming, said the agency completed its first-quarter sale in March 2024 with 28 parcels totaling 12,974 acres and sales revenue “just over $9,000,000.” He said the leases became effective May 1, 2024, and BLM is working on a June 27 sale and a third-quarter sale scheduled for September. Archuleta also said the agency is responding to a federal court ruling that found a June 2022 decision on roughly 120,000 acres deficient for not adequately analyzing risks to drinking water, wildlife and climate.

"We're in the process of developing that language with our solicitor's office," Archuleta said, adding the department will release curative analysis to address the court's concerns.

The BLM witnesses emphasized that the Inflation Reduction Act and a new BLM leasing rule changed terms for leasing, including higher expression-of-interest fees and increased bonding requirements. Brad Purdy, BLM deputy state director for communications, said the proposed rule raises minimum lease bonding from $10,000 to $150,000 and minimum statewide bond amounts from $25,000 to $500,000 and eliminates some nationwide bonds, adding surface-owner protections.

Industry testimony tracked with BLM's account but assigned greater weight to the cost and uncertainty created by federal changes. Colin McKee, regulatory affairs director for the Petroleum Association of Wyoming, told the panel that while Wyoming production is “pretty strong,” operators are using far fewer rigs and are drilling much longer laterals, changing how surface disturbance and production are counted. McKee said BLM Wyoming has about 3 million acres with expressions of interest submitted before the Inflation Reduction Act and that many of those EOIs have not been processed because operators did not pay the new fee or the agency prioritized EOIs submitted under the IRA.

"The BLM is going through a process of basically cleaning up or getting rid of those acres that were submitted before the Inflation Reduction Act," McKee said, and he warned that operators face significant up-front cost to nominate acreage without any guarantee it will be offered for sale.

Committee members pressed both witnesses on the drivers of diminished interest. Representative Heiner asked whether lower EOI counts or bond and royalty changes were primarily responsible. Archuleta replied that multiple factors are at play, from fee increases to market conditions and permitting complexity, and Purdy added that some EOIs are deferred because they nominate nonfederal minerals or are in areas closed to leasing, and because partner federal agencies (U.S. Forest Service, Department of Defense, Bureau of Reclamation) sometimes do not reach concurrence.

The BLM said it will provide trend graphs and more recent APD (application for permit to drill) data to the committee; Archuleta and Purdy also committed to share the BLM website information cited during testimony.

Why it matters: Lease sales, bonding and royalty rules shape whether operators bid on federal minerals. Committee members said declines in lease acreage and EOIs are a concern because energy extraction affects Wyoming jobs, revenues and secondary sectors such as agriculture and services.

What the committee asked for: Legislators asked BLM for historic trend graphs from 2018 to present, more current APD numbers, and clarity on how EOI fees and the IRA's revenue provisions are applied to leases purchased before the IRA. BLM agreed to provide the website data and follow-up information.

Ending note: BLM emphasized the agency is open to follow-up briefings and that litigation and court orders remain active constraints on how some acreage and APDs are processed.