U.S. nets $46,000 on Trump's California oil, gas drilling auction

[December 11, 2020]  By Nichola Groom

(Reuters) -U.S. taxpayers netted less than $50,000 on Thursday in bids for oil and gas leases in California as the Trump administration held the first federal drilling auction since 2012 in the Democratic and environmentally minded state.

The auction for drilling rights on seven parcels covering 4,100 acres (16.6 square kilometers) generated $46,148.64, according to results on the auction site EnergyNet.

The average price per acre was $11, far below the nearly $330-an-acre average price federal lease sales have generated throughout the Trump administration, according to data compiled by green group Center for Western Priorities.

The parcel with the highest per-acre price of $27 was sold to Standard Oil Company LLC, the U.S. Bureau of Land Management said in a statement. Other winning bidders were not disclosed.

Leasing is a key part of President Donald Trump's agenda to increase fossil fuel development, but many sale results have been lackluster this year as the coronavirus pandemic has slammed energy demand and prices.

In a statement, BLM said up to 10 new wells could be developed on the parcels.

Asked to evaluate the sale, a BLM California spokeswoman, Serena Baker, said lessees must also pay annual rent and royalties on any oil and gas produced.

"America's free markets will help determine if energy development on public lands is feasible," Baker said in an email.

Pump jacks are seen in the Midway Sunset oilfield, California, April 29, 2013. REUTERS/Lucy Nicholson

The auction in the waning days of Trump’s administration represents yet another clash between his pro-fossil fuel agenda and the Golden State's efforts to combat climate change.

President-elect Joe Biden, a Democrat who will succeed Trump on Jan. 20, has pledged to halt new oil and gas leasing on federal lands and waters as part of a sweeping plan to fight global warming.

Federal drilling auctions in California were halted in 2013 after state officials filed lawsuits challenging the practice on environmental and health grounds.

BLM concluded last December that opening the lands to development presents no health risks.

State officials, including Governor Gavin Newsom, filed a formal protest against the sale with BLM last month.

BLM dismissed the protest ahead of the auction, saying the state's arguments against the sale had been resolved during the environmental review process.

(Reporting by Nichola GroomEditing by Marguerita Choy and David Gregorio)

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