A House bill that would open the door to the Department of the Interior’s (DOI) Bureau of Land Management (BLM) holding onshore oil and gas lease auctions online would speed sales, reduce fraud and ensure the best return to taxpayers on leases, according to Rep. Bill Johnson (R-OH), who introduced the bill last month.
“Oftentimes, the federal government is behind the private sector when it comes to technological innovation. This is certainly an example of that,” Johnson said at a hearing of the House Subcommittee on Energy and Minerals in Washington, DC, last week. The BLM Live Internet Auctions Act (HR 2752) “would allow the federal government to come into the 21st century and do what the private sector has been doing for the past 11 years,” he said.
HR 2752 would amend the Mineral Leasing Act to authorize the Secretary of the Interior to conduct Internet-based onshore oil and gas lease sales. Current in-person federal onshore oil and gas lease sales were required by the Leasing Reform Act of 1987, which was written prior to current ubiquitous use of the Internet.
BLM’s Colorado state office in 2009 hosted a pilot project to test an online platform that could replace the traditional oral auctions for oil and natural gas lease sales (see NGI, July 13, 2009). The pilot, which was managed by Amarillo, TX-based EnergyNet.com, increased both the number of bidders and sale prices when compared with traditional auctions, Johnson said.
BLM supports HR 2752 and would like to add language to provide DOI “the discretion to hold lease sales via the Internet or oral auction more or less frequently than quarterly, as currently required by the Mineral Leasing Act, or within any state in which lease tracts are available and there is public interest,” Bureau of Ocean Energy Management, Regulation and Enforcement Deputy Director Walter Cruickshank told the subcommittee.
By moving lease sales online it would be possible to significantly shorten the time it would take to sell parcels, according to Tim Spisak, BLM’s deputy assistant director for Lands and Minerals.
“Right now…we have to offer parcels — if they’re ready to go — four times a year by state. If you have the Internet [sales] set up, you could have parcels continuously offered, or grouped together nationally or regionally, instead of state by state. We’re just looking for more flexibility to be able to package parcels differently, based on the circumstances that are in place, other than artificially grouped in the way they have been,” Spisak said.
The subcommittee also heard testimony on HR 2360, which would amend the Outer Continental Shelf Lands Act to extend the Constitution, laws and jurisdiction of the United States to installations and devices attached to the seabed of the Outer Continental Shelf for the production of energy from sources other than oil and gas, and HR 2803, which would direct the Secretary of the Interior to assess reserves of non oil and gas mineral reserves in the shallow and deep seabed of the United States.
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