(Reuters) – The Trump administration raised more than $4 million on Thursday from oil and gas companies that turned out for their last chance to secure federal acreage before the inauguration of President-elect Joe Biden, who has pledged to ban new drilling on public lands.
The auction of U.S. Bureau of Land Management (BLM) oil and gas leases in four states attracted more industry interest than recent federal sales, but prices were still far below what they were before the coronavirus pandemic weakened energy prices and depressed fuel demand.
Most of the 6,851 acres (2,773 hectares) offered in the auction were in New Mexico, overlaying parts of the sprawling Permian Basin. The average bid for New Mexico acreage was $656, far below the roughly $5,000 per acre sales in the state were averaging before the onset of the health crisis.
Bidding at federal drilling auctions, a critical part of Republican President Donald Trump’s “energy dominance” agenda to maximize domestic production of fossil fuels, weakened substantially this year due to the economic effects of the coronavirus and the prospects of a new U.S. president eager to fight climate change.
Biden, a Democrat, has said he would halt new oil and gas leases on federal lands and waters, but he has not laid out a method or timeline for realizing that goal.
Average prices paid at the sale represented an improvement from New Mexico auctions in August and October of last year, but it still drew criticism from environmental and taxpayer groups who have said that holding oil and gas lease sales in the middle of a pandemic was not generating adequate returns.
“This lease sale was a final parting gift to oil and gas speculators from a regime that has, for the past four years, catered to their every whim,” David Jenkins, president of Conservatives for Responsible Stewardship, said in a statement.
The BLM said it is “required by law to hold quarterly lease sales.”
The sale included three parcels in Oklahoma and one each in Kansas and Texas.
The highest bid was more than $1.2 million from PBEX LLC of Midland, Texas for an 80-acre (32-hectare) parcel in Lea County, New Mexico.
(Reporting by Nichola Groom; editing by David Gregorio, Dan Grebler and Jonathan Oatis)