BLM fears collusion among bidders

Agency defends secrecy for parties that nominate energy-lease parcels

A Bureau of Land Management spokesman says reducing the chance for bid collusion is among the reasons the agency keeps the nominators of parcels for oil and gas leasing secret until after lease auctions.

Steven Hall was speaking in response to a recent lawsuit challenging the agency’s nominator secrecy policy in general, and as it pertains in particular to some 30,000 acres nominated for leasing in the North Fork Valley.

His comments come just months after two companies agreed to settle with the federal government over alleged collusion in 2005 on other leases in Gunnison and Delta counties.

The BLM had planned to offer 30,000 North Fork Valley acres for leasing at its August lease sale but deferred the offering because of widespread public concern. However, the 22 parcels involved could be offered again later.

Citizens for a Healthy Community and the Western Environmental Law Center said in their recent lawsuit that they need the nominators’ identities “to engage BLM’s decision-making process on a fully informed basis.”

Elaborating recently on the reasons behind the BLM’s policy, Hall said not knowing who nominated parcels makes it less likely that entities could “collude with each other in setting bid prices or cooperating on bids.”

Also, if nominators were known, parties friendly with them might be less inclined to bid against them, said Hall.

Often, the true entities interested in leasing parcels aren’t known even during the auction, as companies use agents to bid on their behalf.

Earlier this year, Gunnison Energy and SG Interests agreed to pay $275,000 each to settle allegations of collusion in bidding on four leases in the Ragged Mountain area.

Brad Robinson, president of Gunnison Energy, has said the companies entered into a legal joint bidding agreement. He said Gunnison Energy agreed to the proposed settlement because the federal government had more resources to legally fight the issue.

Hall said revealing nominators of lease parcels in advance also could reveal a company’s interest in a large acreage amount, allowing competitors to try to buy leases to block their efforts. That ultimately could stop a company’s intended oil and gas development project, and prevent the federal government from receiving royalties from production.

Some entities also might hesitate to nominate parcels because they might decide it’s not worth the advance public scrutiny, particularly considering that they might not even end up successfully acquiring the leases, Hall said.

Megan Anderson, an attorney with the Western Environmental Law Center, recently said in response to that argument, “To me it seems like if they want those lands they’re going to do what they need to, to get them.”

She couldn’t be reached for further comment on the BLM’s position.


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