State to share nearly half of sale revenues
As part of President Obama’s all-of-the-above strategy to continue to expand safe and responsible domestic energy production, a Bureau of Land Management (BLM) oil and gas lease auction today netted $11,433,090 in revenues from the sale of 25 Federal leases, totaling 2,831.38 acres, in North Dakota. The quarterly sale took place at the BLM’s Montana State Office in Billings.
The highest single-parcel bid was $1,596,000 submitted by Slawson Exploration Company, Inc. of Wichita, Kan., for an 80-acre parcel located in Mountrail county. This same bid also garnered the highest per-acre bid at $19,500 per acre.
BLM oil and gas leases are awarded for a period of 10 years and for as long thereafter as there is production in paying quantities. The revenue from the sale of Federal leases, as well as the 12.5 percent royalties collected from the production of those leases, is shared between the Federal Government and the states. The state of North Dakota will receive 48 percent of the sales revenue resulting from today’s auction and royalties paid on oil and gas production from those leases, and fifty-two percent of the revenue generated goes to the Federal Government. North Dakota will receive nearly $5.5 million from today’s sale. Total royalties collected in North Dakota in fiscal year 2012 for oil, gas, coal, and natural gas liquids was $138,890,069 Federal and $257,400,980 Indian minerals.[1] Since the Bakken Play began in 2009, the total payout in royalties on Indian minerals is $801,253,522.[2]
The Mineral Leasing Act of 1920 and the 1987 Federal Onshore Oil and Gas Leasing Reform Act authorize leasing of Federal oil and gas resources. The 1987 law requires each BLM state office to conduct oil and gas lease sales on at least a quarterly basis. BLM lease sales are competitive and conducted by oral bidding.
Today’s auction was the second of 33 oil and gas lease sales the BLM is scheduled to hold in 2013 and builds on the 31 onshore oil and gas lease sales held last year, which generated $233 million for American taxpayers. The 2012 sales offered more than 1.4 million acres of public land in 1,707 parcels and reflected a continued increase in the average price paid per acre. The price drillers are willing to pay for onshore parcels has more than tripled in the past three years, compared to the last 25 years. Since 1988, the average price paid per acre was $55, while over the past three years, the average was $210.
Under President Obama’s leadership, domestic oil and gas production has grown each year he has been in office, with domestic oil production in 2011 higher than any time in nearly a decade and natural gas production at its highest level ever. Foreign oil imports now account for less than 50 percent of the oil consumed in America – the lowest level since 1995. Revenues from domestic oil and gas production on public lands and federal offshore areas, totaling more than $15 billion this year, are shared among federal, state and tribal governments and represent one of the largest nontax sources of U.S. government funds.
Potential environmental effects that could result from exploration and development are analyzed before any leases are offered for sale. All leases come with conditions on oil and gas activities to protect the environment that can include limits on when drilling can occur or restrictions on surface occupancy. Once an operator proposes exploration or development on a BLM-issued lease, further environmental analysis under the National Environmental Policy Act is conducted to determine the site-specific need for various types of impact-limiting or mitigation measures. In addition, many operators routinely use Best Management Practices such as remote monitoring of producing wells and multiple wells per pad to minimize surface impacts.
The next BLM Federal oil and gas lease sale is scheduled for May 7, 2013, at the BLM’s Montana State Office, located at 5001 Southgate Drive, Billings, Montana. Additional information regarding competitive sale lists, detailed results of sales, and the leasing process is available by writing the Bureau of Land Management, 5001 Southgate Dr., Billings, Mont. 59101, by calling (406) 896-5004, or at http://www.blm.gov/mt.
For the latest BLM news and updates visit us on the web at http://www.blm.gov/mt and on Facebook at http://www.facebook.com/BLMMontana.
The BLM manages more than 245 million acres of public land – the most of any Federal agency. This land, known as the National System of Public Lands, is primarily located in 12 Western states, including Alaska. The BLM also administers 700 million acres of sub-surface mineral estate throughout the nation. In Fiscal Year (FY) 2011, recreational and other activities on BLM-managed land contributed more than $130 billion to the U.S. economy and supported more than 600,000 American jobs. The Bureau is also one of a handful of agencies that collects more revenue than it spends. In FY 2012, nearly $5.7 billion will be generated on lands managed by the BLM, which operates on a $1.1 billion budget. The BLM’s multiple-use mission is to sustain the health and productivity of the public lands for the use and enjoyment of present and future generations. The Bureau accomplishes this by managing such activities as outdoor recreation, livestock grazing, mineral development, and energy production, and by conserving natural, historical, cultural, and other resources on public lands.
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