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 Barbecue."
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 buyers.
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.
For energy 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.
Matt Jenkins is associate editor of High Country News.