Trump’s Department of the Interior, headed by a man submerged in fossil fuel stock, is selling off the rights to offshore drilling. This comes after the January announcement that one of the worst administrations in the history of history would begin opening offshore drilling everywhere, except where a couple of Republican officials didn’t want them. This sell-out to the fossil fuel industry has been packaged as a way to create jobs and make America strong, like bull. But as the Center for American Progress points out, this administration’s idea about how to go about monetizing our country’s federal land seems to be by making a bidding process that’s inopportune and uncompetitive.
The federal law underpinning offshore oil and gas development—the Outer Continental Shelf Lands Act—requires that the Department of the Interior only grant leases of publicly owned offshore resources to qualified bidders through “competitive bidding” and that federal offshore leasing “shall be conducted to assure receipt of fair market value for the lands leased.”
In spite of this clear legal mandate for the parameters of stewardship, the Trump administration’s actions on offshore drilling policy, including last week’s regionwide auction, are flooding the market for leases at a time of low industry interest, eliminating competition among bidders, and minimizing the returns to American taxpayers—to whom the resources belong.
CAP compares the numbers to illustrate the depth of the bamboozling going on.
In other words, if the Trump administration were to have held separate lease auctions for the Central Gulf, Western Gulf, and Eastern Gulf planning areas, it could have expected—based on the sum of average results of areawide lease sales since 2012—to have sold a total of 1.53 million acres across the entire Gulf, received at least $684 million in total high bids, and collected at least $446 per acre.
Instead, Wednesday’s regionwide lease sale fell short of this standard on all measures. Drilling companies bid on a total of 815,403 acres across the entire Gulf, with a total of only $124.8 million in high bids. This averages out to only $153 per acre. The Trump administration’s “largest lease sale in U.S. history” sold 1.05 percent of the 77.3 million acres offered.
Forget about the horrendous environmental issues surrounding these leases for a minute; a big part of this “failure” is that this is not a particularly good time to sell offshore drilling for oil.
The poor result of last week’s offshore lease sale is just the latest failure of the Trump administration’s self-hyped oil and gas leasing program. In October 2017, Secretary of the Interior Ryan Zinke boasted that his plan to lease 10.3 million acres in the National Petroleum Reserve-Alaska was “unprecedented” and “will help achieve our goal of American Energy Dominance.” The lease sale, however, generated bids on less than 1 percent of the lands offered and netted taxpayers only $1.16 million. Nationally, the Trump administration offered oil and gas companies six times more public land for drilling in 2017 than was offered in 2016, but oil and gas companies actually bought fewer acres, and a higher proportion of the acres sold went for the minimum bid of $2 per acre. In other words—both in the oceans and on public lands—the Trump administration is trying to sell more but is getting less for American taxpayers.
To put that into perspective, the Trump administration is giving these leases away, Americans are getting nothing, and the Republican Party is guaranteeing that its leaders will have private sector jobs when they are voted out of office.