While this is an interesting idea, it's pretty comical to think that conservationists could ever come up with enough money to seriously outbid oil and gas companies in lucrative areas. The only reason this person was able to get this lease is that this area is uneconomic to produce from.
Also, the BLM and other leasing organizations use these leases as a way to incentivize develompent in rural areas. Everyone involved has a strong incentive to ensure that leases are actually used for something.
As an aside, here's a paper [1] that summarizes the tax revenue that individual states receive from oil and gas production. Any longterm solution to oil and gas production needs to seriously address how these tax bases (especially in rural areas) stay stable or grow with decreasing oil and gas production. Otherwise you should expect increased resistance to decarbonization as people literally see their schools close, roads deteriorate, etc.
> it's pretty comical to think that conservationists could ever come up with enough money to seriously outbid oil and gas companies in lucrative areas
It would be less comical if there were a global carbon tax that reflected the actual costs of the externalities of fossil fuels. And yes, I know that's not likely either, but a boy can dream.
The free market of voters is not clamoring for such things.
Frankly I donât see a solution aside from labor constraining supply.
Teacher strikes worked.
Internet blackouts stopped SOPA.
Country by of and for the people who keep putting up with bullshit.
Be men and tell your bosses youâre keeping your laptop shut until things change.
A lot less real risk in such a revolution.
Or do as comfortable, affluent folks do and wait until it actually effects you.
New technology, same old biology.
They would then demand a tax on the sun as well.
There is an old satirical essay by the French economist Frédéric Bastiat on how the candlemakers demanded protection from the Sun:
Economic Sophisms and the candlemakers' petition Contained within Economic Sophisms is the satirical parable known as the candlemakers' petition in which candlemakers and tallow producers lobby the Chamber of Deputies of the French July Monarchy (1830â1848) to block out the Sun to prevent its unfair competition with their products.[9] Also included in the Sophisms is a facetious petition to the king asking for a law forbidding the usage of everyone's right hand, based on a presumption by some of his contemporaries that more difficulty means more work and more work means more wealth.
How does a call to add the costs of negative externalities to product prices have anything to do with what you posted?
It's not necessarily that it's an uneconomic lease (I don't have any facts). But that initial payment is not the value paid to the government. The lease bid is premised on the risk of exploration, and the huge royalty payments to the government that accrue from any production. Tying up the ground with the initial bid without exploration and production locks away all of that value. To be equivalent, the environmental bid would have to offer the NPE of all of the royalty revenues that would have otherwise been produced, discounted for the likelihood of discovery. And there's no way they could afford that. Natural resource production comes at some cost, but it also produces huge benefits to society. Nobody wants to see a hole in the ground, but everybody wants schools and roads . . . and, yes, gasoline. Lease bid fees are not relevant to the conversation.
Most areas, especially in the contiguous United States, have already been explored to some extent. These ultra cheap leases reflect the fact that the likelihood of economically producing hydrocarbons in this area is extremely unlikely.
Or, the ultra-cheap leases represent giveaways of public goods to corporate interests. Political consideration of these deals is more about personal+crony enrichment than it is about generating public tax revenue.
Royalty payments aren't really huge. Tax revenues are, but note that the environmental leaves the petroleum in the ground, where it can be recovered later.
Those huge benefits come with huge externalized expenses, too.
What do you mean by production? I assume you mean extraction, not production. These companies cannot synthesize fossil fuels at scale.
In which case, the no-extract bid has the added benefit of not taking the resource out of the public's hands. The royalty is a pittance compared to the true value of the publicly owned resource.
> The only reason this person was able to get this lease is that this area is uneconomic to produce from.
This is an important point. This much acreage would have cost $28 million in the Permian Basin.
>it's pretty comical to think that conservationists could ever come up with enough money to seriously outbid oil and gas companies in lucrative areas. The only reason this person was able to get this lease is that this area is uneconomic to produce from.
Not a hard disagree, but it certainly gets easier the less economic it is to produce/extract from the area. A good example would be coal, where plants in the US are already being closed. Expensive? Yes. But probably cheaper due to market dynamics and, for someone interested in conservation/preservation, has more bang for their buck, given the miserable nature of coal.
> The high bidder, Tempest Exploration Co. LLC, paid $2,500 for the 1,120 acre lease by credit card and began paying annual rental fees. What soon did prove remarkable, though, was the revelation that the company had been created by the environmentalist, Terry Tempest Williams. She intended to keep the oil in the ground. BLM promptly canceled the lease.
I wonder if the right way to hack this is not publicly state that you want to keep the oil in the ground but be very, very bad at extracting it... taking years to "start", digging with a shovel once in a while. Basically doing nothing while claiming to do something.
This approach also works extremely well if you want to stall or cancel a project in a big corporation for political reasons.
Just embed one of your engineer in their team to gain knowledge, but fail to deliver on almost all items except a few. You will end-up pitting "your" exec against "their", and it will take them forever to solve the problem. If conflict resolution looms, just send everyone in summer or winter vacation for several weeks.
This used to be an exploited loophole. Wealthy people would use inexpensive "mineral exploration" leases to get long-term control of areas of Federal land that they wanted to use for other purposes. The only real cost was maintaining the bare minimum fiction that they were doing mineral exploration -- dig the occasional hole in some corner of the property, move a bit of dirt around. Meanwhile, they were doing all kinds of other personal things with the land and building structures enabled by having the lease.
The US DoI started clamping down on the use of fake mineral leases a few decades ago and put policies in place to strongly discourage this kind of abuse.
Reminds me of Steve Black's story about using scaffolding for adverts: https://www.quora.com/Why-is-there-so-much-scaffolding-up-in...
I've seen something similar where I live. Most towns have sign ordinances only allowing up to 4'x8' signs. The hack is to buy a broken down panel truck and wrap the cargo box with your sign and then park it in front of your business.
Sounds like your average bureaucracy then.
Here, it's working correctly. The point of paying for these permits is not to extract maximum money from the citizens who own the land; it is to make sure the land is being used.
-"Hi, I have an old black walnut tree that for whatever reason I want/need removed. Since the value of the wood is higher than the cost of removing a tree, I'm taking bids for who to allow to do the job."
+"That sounds like a good deal, how about $250?"
-"Deal! When will you start cutting?"
+"Oh, I'm not going to remove it! It's too beautiful, I'm just going to leave it be in your property"
The government isn't trying to raise money by selling oil rights, it's trying to get someone to produce domestic oil by allowing access to federal lands.
Then, the government will tax you so they can pay someone to remove that carbon from the atmosphere.
"Yes the planet got destroyed. But for a beautiful moment in time we created a lot of value for shareholders."
I think the author is not wrong, that if land if offered up for extractive use, it must be offered on the same terms for non-extractive use or non-use. But in general, this is land that should not be offered up for use at all.
In The Ministry For the Future, Kim Stanley Robinson presented another option: an investment vehicle backed by proof of carbon sequestration. One way of earning this carboncoin was to own or buy oil/gas/coal resources and legally commit to keeping them in the ground. As demand for fossil fuels declined, generating carboncoin quickly became a more profitable investment than trying to extract and sell fossil fuels.
How do you measure whether these investment vehicles are having the desired effect? I think folks were generally not thrilled about driving a train full of biofuel back and forth between the US and Canadian border even though it apparently generated a very profitable amount of renewable identification number credits ( https://www.cbc.ca/news/canada/biofuel-credits-behind-myster... ).
That's always the problem, isn't it? Existing carbon offsets are basically fraudulent.
The best part is that those who believe that extraction leases are rife with 'corporation giveaways' don't see that carbon offsets will be just as fraudulent.
UCLA Law Professor publishes a paper in Science journal, writes an intro for the general reader.
What is said here is true for US Forest Service land in California, based on a layman's reading of some relevent documents. The forests were declared to be valuable in their utility to the market, then the legal system was built around that founding principle. Extractive industry is a greater good for society than the dirt and bugs that were already there.
Those times are past. We are on a trajectory to see doubling of extinctions by some measures, along with fundemental changes in plant populations, rainfall and human habitability. Sure, Canadians can rejoice in Calgary for the coming long summers, but the rest of the world, essentially, its not going to be pretty.
This article is US-centric and thats OK, other places need to define their own response. This is a sad day but at least, be proactive with what stands right now.
If the oil & gas rights on >1,100 acres were sold at auction for only $2,500...that suggests that (at least in the minds of the other bidders) there is d*mned little worth the effort of trying to extract there, to generate any "greater good for society".
So why not let the tree-huggers buy up leases on a bunch of neigh-worthless land? Far better than them spending their money on lawyers, to sue real oil & gas companies over the real wells that they're busy drilling & running in worthwhile locations.
/conservative viewpoint
There were no other bidders.
Some of something is better than all of nothing.
I think paying for "conservation" on public lands is not nearly as straightforward as the article implies. "conservationists" are not always doing things in the interest of better land use. In Bozeman there's a wealthy neighborhood ($3m+ per house) that outbid the logging companies for the BLM forestry contract adjacent to their land. They claimed it was for natural habitat conservation, but the land has become completely impassable with bramble. It used to be a fantastic place to hike and ski tour in the winter, but it's become so overgrown it's hard to access by human or wild animal. We were really looking forward to the improved access to the land once the forest was harvested. The director of forestry for the area had a really thoughtful plan for harvesting the land. Completely aside from the economic loss from not harvesting, there wasn't a conservation benefit either.
On the one hand, they certainly are conserving the natural habitat. Letting it go wild like that is as natural as you can get.
On the other hand, I can't help but think those wealthy folks are setting themselves up for something like California fire season...
Isnât one of the major rationales for allowing this so cheaply for economic uses that it creates jobs and other spinoff economic activity?
I can see why the government wouldnât be pleased if someone did nothing with it.
They expected not only rent payments, but payroll taxes, job creation, etc.
Sure, but the alternative here is also pretty good. Conserving the land and not putting more oil on the market is also an outcome worth subsidising.
Except the government is interested in renewables out competing oil, not starving the market of energy before the world transitions.
The latter leads to higher prices and discontent.
I mean if you're an environmentalist of course you would think that -- I think that. But it's a little naive to think anyone else really cares when it's that or cheaper gas and employment.
It depends, for example the Ducks Unlimited organization restores and saves a lot of marsh land that may be used for development but generally an oil/gas company wouldn't find the land very useful.
Yeah, the subtext here is that BLM isn't really selling the land for any purpose but allowing extraction if you want. They're selling the land specifically for someone to start drilling.
There's not really a good way around this because even if there it was ruled that BLM couldn't refuse the lease next time they would just change the lease terms to be really really expensive, far more than conservationist movements could afford, and then offer a rebate once extraction began.
I think this article misses an important aspect of conversationalist thinking: a lot of them want the land to be completely untouched. Had a legal battel with conservationists trying to close of a section of property at some point, and part of the objective from them was to prevent the land owners from using the land and somehow harming it as a result. They lost, however it was enlightening to see a different mindset.
I worked in New Mexico in the 90s with a 'gravel' operation that was selling off the gravel left over from mining operations decades and decades before. Tall piles of just rock we loaded into trucks and sold.
At some point they discovered that the old timers left enough gold in the tailings piles that it made sense to use modern techniques to reclaim that already out of the ground gold before selling the gravel. That triggered a multi-year legal fight to 'stop them from raping the land through gold mining'. Not only did they want the 'mining operation' stopped, now they also wanted the current owners to 'properly' remediate ancient mines scattered through the property. Some of these mine were legitimately historical places where South American's were coming north to mine Turquoise and Silver several hundred years ago.
We ended up not only losing access to the tailings piles for gravel use, but were then required to clean up the mess left by mining operations that had not existed for a hundred years or more. It shaped the way I view most people that claim to want to save the environment to this day. There is rarely any middle ground anymore and has become and all or nothing platform.
In New England similar groups buy up land and just let it sit, maybe maintain a hiking trail through it.
New England went glaciers -> tundra -> grasslands -> forests managed by native peoples -> un-managed forests.
The ecological state theses environmentalists are promoting is basically the status quo of the early 1700s and late 1800s through present day. It's hard to define what the "natural" state is since it went from periods of rapid change to various states shaped by human activity with little in between. Generally speaking most people consider the forests as they would have existed as managed by the natives prior to European settlement as the state that is most worthy of reconstruction.
> they would have existed as managed by the natives prior to European settlement as the state that is most worthy of reconstruction
This is magical thinking; the First Nations are, and were, human. The Huron, for instance, would move their settlements once they had "used up" all the readily available resources (mostly game animals) in the area. The First Nations were only better "custodians" of the land because they lacked the means to abuse the land as thoroughly as European "settlers".
You missed a step or two in your historical timeline
glaciers -> tundra -> grasslands -> forests managed by native peoples -> decimated forests due to settler activities -> depopulation and deindustrialization -> un-managed forests
Well, don't forget that the timeline for most forested areas would look more like "forests managed by native peoples -> land clear-cut by European settlers -> un-managed forests," though I'm sure "un-managed" is debatable here; humans never left.
Much of New England was clear-cut, either to harvest old-growth timber or for farmland. The forests we see today date to after the westward expansion, when farmers left the rocky New England soils for easier tilling in the Midwest and Great Plains states. So really, when people want to conserve the land in that state, they're saying "let's let the new-growth forests come back and maybe become old-growth forests again."
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