Center for American Progress

CAP Calls for Investigation of Online Oil and Gas Leasing Program Vulnerable to Fraud and Abuse
Press Release

CAP Calls for Investigation of Online Oil and Gas Leasing Program Vulnerable to Fraud and Abuse

Washington, D.C. — The federal government will soon sell off many prized public lands for drilling through a private online auction system that is highly susceptible to waste, fraud, and abuse, according to a new analysis from the Center for American Progress.

As early as next month, the Trump administration could sell vast portions of Bears Ears and Grand Staircase-Escalante national monuments for drilling through an oil and gas leasing system that is fundamentally deficient, the analysis says. It urges the Government Accountability Office and the Interior Department’s Office of Inspector General (OIG) to immediately review the federal oil and gas leasing program to determine its legality and its vulnerability to fraud and mismanagement.

Over the last year, internet-based auctions of public lands to the oil and gas industry have replaced traditional in-person sales, a move requested by the oil and gas industry and designed to stymie public protest. Under the new system, an oil and gas company can now navigate the entire leasing system in complete anonymity. The lease nomination process is anonymous; the auction system is anonymous until sale results are posted; and even then, companies can use lease brokers to shield themselves from public view.

The Bureau of Land Management (BLM) has contracted with a single company, EnergyNet, to conduct all its online oil and gas lease sales. EnergyNet is a member of the Western Energy Alliance—an oil and gas industry lobby group—and its top executives are all oil and gas business veterans from companies such as Chevron Corporation and the now-defunct Enron Corporation. EnergyNet collects millions of dollars in commission each year, money that would otherwise go to U.S. taxpayers.

The CAP analysis finds that oil and gas companies are using an elaborate network of affiliates and subsidiaries to warehouse hundreds of thousands of acres of public lands, potentially evading long-established oil and gas leasing limits. It also finds that the BLM does not have an automated system in place to monitor this practice or to ensure oil and gas companies are not circumventing the law.

Read the issue brief: “The Trump Administration Is Selling Your Public Lands on the Internet,” by Nicole Gentile.

For more information or to speak to an expert, please contact Sam Hananel at 202.478.6327 or [email protected].