The third Bureau of Land Management auction of oil and gas sales scheduled for the 2013 fiscal year should have been held today for federal lands in California. However, last month the BLM California office issued a short notice stating that it would cancel remaining 2013 oil and gas lease sales planned for May, June, and September. The first, and only, 2013 fiscal year oil and gas lease sale in California took place on December 12, 2012, and resulted in the sale of 15 oil and gas lease parcels in Fresno, Monterey and San Benito counties for a total of $104,099.50. The office cited budget constraints from the sequester, a desire to prioritize inspection and enforcement of existing leases, and focus on new applications to drill. At the time of the notice to cancel—and as of the date of this post—California is the only state to cancel all of its remaining statutorily-required oil and gas lease auctions for 2013. (One of Nevada's four lease sales for 2013 has also been cancelled.)
The California BLM office openly acknowledged that this decision conflicts with the Mineral Leasing Act (30 U.S.C. § 181 et seq.), which requires that each state office of the BLM conduct at least four oil and gas lease sales every year. Critics argue that, despite budgetary issues, by law the BLM cannot forego its obligations to hold the required number of auctions.
The decision to cancel California's 2013 lease sales comes directly on the heels of a ruling issued in the United States District Court for the Northern District of California. The federal judge ruled that the BLM had failed to fully evaluate potential impacts of hydraulic fracturing operations in the Monterey Shale pursuant to the National Environmental Policy Act. Read more about this decision here (see April 11, 2013 post), and subsequent litigation against the California BLM here (see April 22, 2013 post).
Last year, the federal government collected more than $233 million in revenue from fees levied on onshore oil and gas lease sales.