Big Oil tightens grip on federal leases

Lax enforcement lets companies exceed limits on public acreage they may mine for gas and oil.
Monday, May 31, 2004 | 12:00 a.m. CDT; updated 5:50 p.m. CDT, Wednesday, July 2, 2008

WASHINGTON — A single New Mexico family and a dozen big oil companies, including one once headed by Commerce Secretary Don Evans, now control one-quarter of all federal lands leased for oil and gas development in the continental United States despite a law intended to prevent such concentration, federal records show.

Since 1997, mainly as a result of mergers and acquisitions, six companies have exceeded the legal limit of 246,080 acres in lease holdings on public lands in states other than Alaska. But the Bureau of Land Management, in charge of enforcing the 1920 law, has chosen to extend compliance deadlines for years.

In fact, an Associated Press computer analysis found the Interior Department agency permitted companies it knew were in violation of the law in Wyoming to continue to acquire thousands of acres of new oil and gas leases in that state. The bureau has given the companies additional years to comply.

“They should not be purchasing leases,” said Tom Lonnie, the bureau’s assistant director for minerals, realty and resource protection. Before acquiring a lease, a company must certify that its holdings do not exceed the legal limit.

The government can cancel leases held by companies that exceed the cap. Agency officials acknowledge they have never done that nor denied a company’s request for more time to comply.

“We try to work with them instead of hitting them with a hammer,” said Bob Bennett, the bureau’s Wyoming state director.

Bureau officials say they have to rely on companies to provide accurate accounts of their holdings because the agency’s computerized records do not track transfers of lease operating rights or the ownership of divided shares of leases.

The lax enforcement coincides with the Bush administration’s push to open new public lands for oil and gas development. In March, bureau records showed 40 million acres of federal lands were under lease in the continental United States. That is 5.3 million more acres than when President Bush took office.

Companies and individuals that dominate federal oil and gas leasing have been major financial supporters of Bush and the Republican Party. Since 1999, the top 25 owners of federal oil and gas leases have directed 86 percent of their $8.2 million in political donations to the GOP.

Environmental groups contend the administration is rewarding its financial backers by ignoring the acreage law while pushing more public lands into development.

“It’s clear from the data that there is no reason for the Bush administration to issue leases on America’s last remaining wild public lands, other than as a favor to their most generous political patrons,” said Dave Alberswerth, public lands director for the Wilderness Society.

Both big oil companies and independent operators have another way to amass lease holdings in excess of the state limit. They can enter into agreements with other companies, approved by the government, to develop the oil or gas on several adjoining leases as a unit under fairly strict controls. In return, they get to exclude that acreage from the cap.

Lonnie, the BLM’s assistant director, said administration officials have left enforcement of the acreage law to bureau officials in the states. He said agency officials are following the same policies they used in the Clinton administration.

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