President Trump has a plan for energy dominance that he says “unlocks millions and millions of jobs and trillions of dollars in wealth” by auctioning off federally owned ocean lands for oil exploration. Our new investigation reveals that the American public was cheated out of billions of dollars in revenue from such lands over the past three decades because of a broken auctioning system. However, an influential committee meeting this week has the power to fix that system by implementing important reforms to the way the public is compensated for resources extracted from public land.
American people were denied tens of billions of dollars in revenue over the last three decades thanks to a Reagan-era system that changed the government’s process for auctioning off publicly owned tracts of the seafloor to oil and gas companies for production. Although the process is supposed to ensure taxpayers receive “fair market value” for natural resources extracted from public lands, the change instead ensured that the vast majority of those tracts only receive a single bid. That has impacted the prices companies pay the public for drilling rights. For instance, adjusted for inflation, the average price paid per acre in each Gulf of Mexico auction since 1983 has declined from $9,068 to $391—a drop of 95.7 percent.
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