Last week, the Bureau of Land Management held its first oil and gas lease sales in months, netting more than $8 million from drillers eyeing public lands primarily in New Mexico.
The BLM touts the revenues, but as Reuters reports, the auctions saw average bids far lower than pre-pandemic levels.
Lands in Eddy County, New Mexico, in the Permian Basin, drew the auction's highest bid per acre, more than $21,000, according to BLM documents. Last week’s sales also included public lands in Texas and Oklahoma.
Carl Larry, an analyst with Oil Outlooks, says the BLM is likely doing this now to maintain domestic production so we won’t be beholden to foreign interests when consumption rebounds. That’s in line with the Trump administration’s push for more energy independence.
"This just really kind of supports that idea that we want to be, not just independent, but more independent," Larry said.
Larry said low interest rates and less cutthroat bidding may actually entice more buyers and higher bids as lease sales continue.
Even if oil consumption doesn’t fully rebound in the U.S. as more people work from home, Larry said new production now could put the U.S. in a "driver’s seat" to capitalize on rebounding markets worldwide.
This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUNR in Nevada, the O'Connor Center for the Rocky Mountain West in Montana, KUNC in Colorado, KUNM in New Mexico, with support from affiliate stations across the region. Funding for the Mountain West News Bureau is provided in part by the Corporation for Public Broadcasting.
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