BLM moves to block bogus bids

Nearly 10 months after Tim DeChristopher’s moment of fame, the US Bureau of Land Management has quietly taken short-term steps to make sure that it doesn’t happen again.

The 27-year-old University of Utah economics student and environmental activist submitted $1.8 million of bogus bids at the BLM’s Utah oil and gas lease sale on Dec. 18, 2008. He apparently received a bidding paddle after showing his driver’s license.

Federal regulations said that bidding for oil and gas leases is open to any US citizen over 21, but successful bidders had to accept and pay for what they acquire. DeChristopher outbid others at the sale to keep the tracts from being developed but did not have the money to pay for them.

He became a hero in Utah environmental circles for a nonviolent tactic which elevated the issue of the proposed leases’ supposed proximity to national parks and other scenic areas. The Southern Utah Wilderness Alliance and several national environmental organizations successfully sued to delay the process. Ken Salazar ordered that 77 of the leases be rejected soon after he became US Secretary of the Interior in early 2009 and ordered a review.

OGJ has covered the review’s main recommendations already. But tucked away at the end of Q&A about the Utah lease sale report on the state’s portion of BLM’s Web site is the following:

“Q: What actions has the BLM taken to ensure that oil and gas lease sales aren’t sabotaged by disruptive bidders?

“A: The BLM has taken short-term actions to better safeguard competitive oil and gas lease auctions from bidding activity that is disruptive and contrary to conducting the public’s business. These efforts include: validating the identity of registering bidders; ensuring that bidders are responsible and qualified through the application of an enhanced bidder form; and instituting disincentives for submitting fraudulent or protest bids through enhanced language in lease sale notices, bidder registration forms, and use of formal billing and collection processes.”

Voser’s cautious view of alternatives

Royal Dutch/Shell doesn’t necessarily reject energy alternatives, its chief executive said in an Oct. 8 Washington address. Peter Voser simply would like more policymakers to consider the consequences of implementing alternative technologies.

“Peter Drucker once said: ‘The best way to predict the future is to create it.’ True, the most successful companies will be those that embrace new ways of thinking, take risks and anticipate evolving customer wants before others do,” he said in remarks on “The Energy Company of the Future” at the Woodrow Wilson International Center for Scholars. “Some of you may think: ‘If that’s true, oil and gas companies should switch to renewable energy immediately, since that is where future growth will be.’”

Voser doesn’t quite see it that way, he continued, since it historically has taken about 25 years for each new technology to gain about 1% of the global energy market. “That’s been true for liquefied natural gas in the past. Biofuels are reaching that mark about now. Wind could do so sometime in the next decade, 25 years after the first big wind farms were built here in the United States and in Denmark,” he observed.

Many raw materials on which renewable energy technologies depend come with supply constraints and environmental challenges, according to Voser. “For instance, the lithium that’s used in batteries in electric vehicles can currently only be produced easily in a very few places on Earth, often through the use of toxic chemicals. If we were to make a big shift to electric vehicles, the capacity for mining lithium, responsibly and sustainably, would also have to expand,” he said.

The wind industry needs neodymium, a rare earth metal, for magnets in turbines, Voser continued. While it’s abundant in the Earth’s crust, bigger concentrations are rare and difficult to produce in environmentally friendly ways. Rare earth metal mines in the USA were closed in the past for environmental and economic reasons. Today, more than 90% of the world’s neodymium comes from China, which recently indicated it might tighten export controls, the Shell official said.

“This underscores the importance of making responsible use of all of the Earth’s precious natural resources. It also serves as a reminder that countries are well-advised to spread their energy risks by increasing the diversity of their energy supplies,” he maintained.

Noting that complex problems rarely have simple solutions, Voser said that Shell is responding in many different ways: It develops scenarios and shares them with the outside world. It invests more in new energy projects than any other private company. It spends more on research and Development than any of its competitors. And it develops new businesses, including those in renewable energy.

“That said, we cannot innovate in all directions. We have to focus on our own skills and capabilities,” Voser said. “We are not a government. We are a business. The key is to be in the right segment of the right market at the right time.”

Marking ‘Energy Freedom Day’

It was hardly surprising when a major oil and gas association’s chief executive, several US House Republicans, and other groups commented on the one-year anniversary of the expiration of congressional offshore leasing moratoriums on Oct. 1. The anniversary gave them an ideal opportunity to chide the Obama administration for not having done much since.

“Earlier this year, our nation celebrated the 150th anniversary of the first oil well drilled in the United States and the countless benefits and success stories that affordable and reliable energy have helped create. Today we mark another momentous day in America’s energy history,” said Independent Petroleum Association of America President Barry Russell.

“However, one year later our American resources are as far out of reach as they were before this ban expired. Because the Interior Department continues to slow-walk its five-year offshore energy plan, a de facto ban remains in tact,” he continued.

A day earlier, the Institute for Energy Research coined a name for the anniversary: Energy Freedom Day. “Last year, the American people rose up and demanded Congress take action to address our long-term energy and security needs,” IER President Thomas J. Pyle said. “Because of the unified call for access to more American energy, Congress eventually removed the decades-old offshore energy ban. Unfortunately, one year later, that door has been effectively closed by the Department of the Interior.”

US Rep. Rob Bishop (R-Utah), chairman of the Congressional Western Caucus, agreed. “Energy Freedom Day is itself an oxymoron since we are no more free of our reliance on foreign energy today than we were one year ago. In fact, over the past year, roughly 60% of all consumed energy resources were imported from foreign countries. This is an alarming statistic given the resources located right here in the US,” he said on Oct. 1.

Millions of Americans depend on US Outer Continental Shelf oil and gas production for their livelihoods and every American depends on it for transportation, according to Rep. Bill Cassidy (R-La.). “In my state, 320,000 Louisianans work in the energy industry, generating around $12 billion a year in household income,” he said in an Oct. 1 posting on his blog. “These are well-paying jobs for welders, pipe fitters, barge workers, and the thousands of people who work in industries that support the energy sector.”

Rep. Paul Broun (R-Ga.) observed Energy Freedom Day by introducing legislation which seemed to not be directly related to the occasion. His bill aimed at stopping excess litigation against energy projects on federal lands would impose a 60-day deadline on legal challenges, require that the loser pay in most cases, and prevent judicial “forum shopping” by requiring all cases to be filed in federal district court for the District of Columbia.

“In addition to congressional inaction, excess litigation is also impeding energy exploration,” he explained. “It’s crucial that we streamline the legal process for the significant number of legal challenges from environmental groups. The current process is in disarray and ultimately prevents American energy sources from reaching the American people.”

Conventional wisdom suggests that Broun’s bill doesn’t stand a chance. It also was the conventional wisdom that then-Rep. John E. Peterson (R-Pa.) was wasting his time more than three years ago when he first spoke out about presidential and congressional offshore oil and gas leasing bans in a House floor speech, and look what happened there.