Handful hold 25% of federal oil leases
By David Pace
The Associated Press
Washington - A single New Mexico family and a dozen big oil companies, including one once headed by Commerce Secretary Don Evans, now control one-quarter of all federal lands leased for oil and gas development in the continental United States.
The concentration of leases, mostly in the West, has happened despite a federal law to prevent it.
Since 1997, mainly as a result of mergers and acquisitions, six companies have exceeded the legal limit of 246,080 acres in lease holdings on public lands in states other than Alaska. But the Bureau of Land Management, in charge of enforcing the 1920 law, has chosen to extend compliance deadlines for years.
In fact, an Associated Press analysis found that the Interior Department agency permitted companies it knew were in violation of the law in Wyoming to continue to acquire thousands of acres of new oil and gas leases in that state. The bureau has given the companies additional years to comply.
"They should not be purchasing leases," said Tom Lonnie, the bureau's assistant director for minerals, realty and resource protection. Before acquiring a lease, a company must certify that its holdings do not exceed the legal limit.
The government can cancel leases held by companies that exceed the cap. Agency officials acknowledge they have never done that nor denied a company's request for more time to comply.
Companies in violation of the state limit as a result of a merger or acquisition have 180 days to comply.
"We try to work with them instead of hitting them with a hammer," said Bob Bennett, the bureau's Wyoming state director.
When Anadarko Petroleum of Houston asked for a two-year extension to get back into compliance after a 2000 merger with Union Pacific Resources put it over the limit in Wyoming, the bureau said yes. That was the case for a 2002 request by Encana Oil and Gas of Canada.
In the first 15 months of Anadarko's extension, the company acquired 70 new leases in Wyoming totaling more than 100,000 acres. A year after granting Encana the extension, the bureau allowed Encana to acquire two new leases totaling more than 2,000 acres in the state.
Anadarko relinquished 50 of its leases to meet an April 30 deadline to get back under the cap, Lonnie said. Encana has until October to comply. Four other companies that had gone over the cap in Wyoming since 1997 are now in compliance.
Bureau officials say they have to rely on companies to provide accurate accounts of their holdings because the agency's computerized records do not track transfers of lease operating rights or the ownership of divided shares of leases.
The lax enforcement coincides with the Bush administration's push to open new public lands for oil and gas development. In March, bureau records showed 40 million acres of federal lands were under lease in the continental United States. That is 5.3 million more acres than when President Bush took office.
Companies and individuals that dominate federal oil and gas leasing have been major financial supporters of Bush and the Republican Party. Since 1999, the top 25 owners of federal oil and gas leases have directed 86 percent of their $8.2 million in political donations to the GOP.
Individuals and companies affiliated with the Yates family of Artesia, N.M., which is by far the biggest lease holder, have given $276,926 to GOP parties and candidates since 1999, and $11,400 to Democrats.
Denver-based Tom Brown Inc. was over the acreage limit in Wyoming from 1997 to 2000, while current Commerce Secretary Evans was the company's chief executive.
As Bush's campaign chairman in 2000, Evans raised millions of dollars from the oil industry. When he resigned at Tom Brown before joining the Cabinet in 2001, Evans received a retirement package worth more than $5 million.
Environmental groups say the administration is rewarding its financial backers by ignoring the acreage law while pushing more public lands into development.
Lonnie, the BLM's assistant director, said enforcement of the acreage law has been left to bureau officials in the states.
Congress limited oil and gas lease ownership in 1920, concerned that companies would monopolize mineral rights on public lands by cornering leases they did not intend to exploit.
But changes in the law and new interpretations have allowed companies to amass far more than the current 246,080- acre limit per state. Legislation pending in Congress would remove any oil- or gas-producing lease from that cap.
The top 25 of the more than 10,000 owners of oil and gas leases, for example, now control more than one-third of all leased acres and 37 percent of the acres in leases producing oil and gas, the AP found.
The Yates family, through nearly three dozen companies, individuals and trusts operating out of the same building in Artesia, controls 2.7 million acres of oil and gas leases on public lands. That includes more than 1 million acres in Wyoming, more than 800,000 acres in New Mexico and more than 500,000 in Nevada.
A dozen companies with Yates family members as officers show up in BLM lease owner records, all with the same address. When the General Accounting Office, the investigative arm of Congress, questioned the arrangement in 1994, the bureau's chief lawyer ruled the law does not require that lease holdings of affiliated companies or individuals be counted together.
By David Pace
The Associated Press
Washington - A single New Mexico family and a dozen big oil companies, including one once headed by Commerce Secretary Don Evans, now control one-quarter of all federal lands leased for oil and gas development in the continental United States.
The concentration of leases, mostly in the West, has happened despite a federal law to prevent it.
Since 1997, mainly as a result of mergers and acquisitions, six companies have exceeded the legal limit of 246,080 acres in lease holdings on public lands in states other than Alaska. But the Bureau of Land Management, in charge of enforcing the 1920 law, has chosen to extend compliance deadlines for years.
In fact, an Associated Press analysis found that the Interior Department agency permitted companies it knew were in violation of the law in Wyoming to continue to acquire thousands of acres of new oil and gas leases in that state. The bureau has given the companies additional years to comply.
"They should not be purchasing leases," said Tom Lonnie, the bureau's assistant director for minerals, realty and resource protection. Before acquiring a lease, a company must certify that its holdings do not exceed the legal limit.
The government can cancel leases held by companies that exceed the cap. Agency officials acknowledge they have never done that nor denied a company's request for more time to comply.
Companies in violation of the state limit as a result of a merger or acquisition have 180 days to comply.
"We try to work with them instead of hitting them with a hammer," said Bob Bennett, the bureau's Wyoming state director.
When Anadarko Petroleum of Houston asked for a two-year extension to get back into compliance after a 2000 merger with Union Pacific Resources put it over the limit in Wyoming, the bureau said yes. That was the case for a 2002 request by Encana Oil and Gas of Canada.
In the first 15 months of Anadarko's extension, the company acquired 70 new leases in Wyoming totaling more than 100,000 acres. A year after granting Encana the extension, the bureau allowed Encana to acquire two new leases totaling more than 2,000 acres in the state.
Anadarko relinquished 50 of its leases to meet an April 30 deadline to get back under the cap, Lonnie said. Encana has until October to comply. Four other companies that had gone over the cap in Wyoming since 1997 are now in compliance.
Bureau officials say they have to rely on companies to provide accurate accounts of their holdings because the agency's computerized records do not track transfers of lease operating rights or the ownership of divided shares of leases.
The lax enforcement coincides with the Bush administration's push to open new public lands for oil and gas development. In March, bureau records showed 40 million acres of federal lands were under lease in the continental United States. That is 5.3 million more acres than when President Bush took office.
Companies and individuals that dominate federal oil and gas leasing have been major financial supporters of Bush and the Republican Party. Since 1999, the top 25 owners of federal oil and gas leases have directed 86 percent of their $8.2 million in political donations to the GOP.
Individuals and companies affiliated with the Yates family of Artesia, N.M., which is by far the biggest lease holder, have given $276,926 to GOP parties and candidates since 1999, and $11,400 to Democrats.
Denver-based Tom Brown Inc. was over the acreage limit in Wyoming from 1997 to 2000, while current Commerce Secretary Evans was the company's chief executive.
As Bush's campaign chairman in 2000, Evans raised millions of dollars from the oil industry. When he resigned at Tom Brown before joining the Cabinet in 2001, Evans received a retirement package worth more than $5 million.
Environmental groups say the administration is rewarding its financial backers by ignoring the acreage law while pushing more public lands into development.
Lonnie, the BLM's assistant director, said enforcement of the acreage law has been left to bureau officials in the states.
Congress limited oil and gas lease ownership in 1920, concerned that companies would monopolize mineral rights on public lands by cornering leases they did not intend to exploit.
But changes in the law and new interpretations have allowed companies to amass far more than the current 246,080- acre limit per state. Legislation pending in Congress would remove any oil- or gas-producing lease from that cap.
The top 25 of the more than 10,000 owners of oil and gas leases, for example, now control more than one-third of all leased acres and 37 percent of the acres in leases producing oil and gas, the AP found.
The Yates family, through nearly three dozen companies, individuals and trusts operating out of the same building in Artesia, controls 2.7 million acres of oil and gas leases on public lands. That includes more than 1 million acres in Wyoming, more than 800,000 acres in New Mexico and more than 500,000 in Nevada.
A dozen companies with Yates family members as officers show up in BLM lease owner records, all with the same address. When the General Accounting Office, the investigative arm of Congress, questioned the arrangement in 1994, the bureau's chief lawyer ruled the law does not require that lease holdings of affiliated companies or individuals be counted together.
