To my jaundiced and hungry eye, the federal Bureau of Land Management, which manages oil and gas development on public lands in the West, is looking more and more like a McDonald’s franchise.
I first noticed it last January during a trip
to Denver. At the McDonald’s in Glenwood Springs, Colo., the
sign under the arches read "Over 99 billion served." But
McDonald’s isn’t just about the high-volume dispensing
of cheap energy; it’s also about slapping a burger together
and getting it to the customer as fast as possible. A few days
later, at a McDonald’s in Golden, I spied a sign behind the
counter that read: "Order Assembly Target: 12-16 seconds."
It was then that the parallels with the BLM began to
arise. On April 11, 2003, Interior Secretary Gale Norton, who
oversees the BLM, and then-Utah Gov. Mike Leavitt reached an
out-of-court settlement that lifted interim protections for lands
Utah citizens’ groups had identified as being eligible for
wilderness designation. Soon after, the BLM began auctioning off
those wilderness-quality lands for oil and gas development, not
just in Utah, but across the West (HCN, 1/19/04: Two decades of
hard work, plowed under). Since the 2003 wilderness settlement, the
BLM has auctioned off more than 148,000 acres of these
citizen-proposed wilderness lands.
This aggressive oil
and gas development program isn’t limited to potential
wilderness. In 2002, the BLM’s Buffalo field office in
Wyoming’s Powder River Basin received a "Unit Award for
Excellence of Service" for granting more permits to drill wells
than the rest of the BLM combined, not including New Mexico. Then,
in 2004, the Buffalo office broke its own record when it issued
2,720 well-drilling permits.
At the same time, the agency
ordered the Buffalo field office to trim its permitting turnaround
time to 46 days. It’s not exactly a 12-to-16-second Order
Assembly Target, but it makes you wonder whether the BLM has lifted
a few pages straight out of the McDonald’s handbook.
In a way, this is all reminiscent of the
government’s massive land giveaways to railway corporations
in the 1860s, as an incentive for building the Transcontinental
Railway. The historian Vernon Parrington, writing shortly before
his death in the late 1920s, called the phenomenon "the Great
Today, the Great Barbecue has returned, but
this time it’s a drive-through, a McDonaldized version where
the government simply slaps the meat on the hot electrified griddle
and shovels it out the window. It is still practically a giveaway:
The average price for a lease on an acre of BLM land is $64.23. The
minimum bid is $2 per acre — a dollar less than the average
cost of a Big Mac. The average annual return to the government in
the form of royalties on producing leases is $142.10 per acre.
In terms of their wilderness potential, many of these
wildlands are prime cut. But for the oil and gas industry,
they’re the last fatty scraps, because they’ll yield
only marginal amounts of oil and gas. At such cheap prices,
however, it’s easy for oil and gas companies to buy up what
they can, sink a few exploratory wells and, for the most part, use
the leases to pad their book value and make them more attractive to
Take the case of a citizen-proposed wilderness in
northwest Colorado called Big Ridge. In 1997, Amoco drilled a dry
hole there in what would, in 2001, be nominated as a
citizen-proposed wilderness. In November 2003, seven months after
the Norton-Leavitt wilderness settlement, El Paso Corp. drilled
another dry hole just 200 feet from the six-year-old Amoco hole.
Then it abandoned its efforts.
Nonetheless, the lease is
still valuable to El Paso. According to Forbes magazine, El Paso is
desperately trying to "pay down a debt load that ballooned as high
as $24 billion after failed expansions into Enron-style energy
trading and wholesale power generation." Selling off leases such as
Big Ridge could help reduce some of that debt.
corporations, however, the fast track could slow down. On Jan. 12,
the 10th Circuit Court of Appeals in Denver heard arguments that
the Norton-Leavitt wilderness settlement unfairly excluded the
public. The court could rule on the case in the next few months.
But in the meantime, it won’t take much for rampant
well-drilling and lease-trading to turn potential wilderness into
the public-lands equivalent of ground beef. In the end, the public
won’t be left with much more than a sizzling fatty mess and a
bunch of smoke.