Later On

A blog written for those whose interests more or less match mine.

Activism and the drilling lease sale

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Associated Press:

An environmental activist tainted an auction of oil and gas drilling leases Friday by bidding up parcels of land by hundreds of thousands of dollars without any intention of paying for them, a federal official said.

The process was thrown into chaos and the bidding halted for a time before the auction was closed, with 116 parcels totaling 148,598 acres having sold for $7.2 million plus fees.

“He’s tainted the entire auction,” said Kent Hoffman, deputy state director for the U.S. Bureau of Land Management in Utah.

Hoffman said buyers will have 10 days to reconsider and withdraw their bids if they think they paid too much.

Tim DeChristopher, a 27-year-old University of Utah economics student, said his plan was to disrupt the auction and he feels he accomplished his goal.

DeChristopher won the bidding on 13 parcels, auction records show, and drove up the price of several other pieces of land.

“I thought I could be effective by making bids, driving up prices for others and winning some bids myself,” the Salt Lake City man said.

Some bidders said they were forced to bid thousands of dollars more for their parcels, while others fumed that they lost their bids.

“We were hosed,” said Jason Blake of Park City, a consulting geologist who was outbid on a 320-acre parcel. “It’s very frustrating. I hope the guy is prosecuted.”

Several bidders said they hadn’t decided whether they would withdraw their bids. Some said they may reluctantly hold on to their leases — despite the higher cost — out of concern that the parcels might not go up for auction again under President-elect Barack Obama’s administration.

Continue reading.

Josh Marshall comments:

Earlier I flagged the AP article about the environmental activist who snuck into a Bureau of Land Management auction and managed to marginally jack up the give-away prices a bunch of oil and gas companies were going to pay to lease the land. Now it turns out, according to one of our readers, that the ‘scam’ was only possible because the Bush administration did the whole thing on a rush basis in order to get as much of the public domain given away to energy industry cronies before January 20th …

The fuss over DeChristopher stems from his disruption of a last-minute push by the Bush administration to give away public lands for a pittance. That’s apparently why the rules were changed for this auction, waiving the time-consuming prequalification procedures that would ordinarily have prevented a stunt like this. As one former BLM director put it: “It was rush before the door slams behind them: ‘Let’s get as many leases out as possible.'”But what I really love about the story is the complaint that DeChristopher “tainted the entire auction,” by running up prices by thousands of dollars on all the lots he didn’t actually win. Honestly, I don’t understand that. How could bidders have overpaid? They knew what they were buying, and presumably, they wouldn’t have been willing to bid more than they felt the parcels were worth. So the complaint is that DeChristopher’s intervention narrowed the spread between the value of the rights and their price at auction. I understand why the bidders are angry, but shouldn’t BLM be pleased?

Auctions work on the theory that open bidding will efficiently yield the highest price any bidder is willing to pay. DeChristopher’s stunt suggests that, for whatever reason, that’s often not the case at BLM auctions. It turns out that, when pressed, most bidders are willing to pay more, often much more. In other words, DeChristopher exposed the
fact that we’re routinely selling the rights to public land for less than its actual market value. No wonder BLM is mad.

Only a month before the raid on the public domain comes to a close.

At least for the moment.

Written by LeisureGuy

24 December 2008 at 12:06 pm

Posted in Daily life

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