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Public lands are being sold in secret on the internet

A mysterious company known as Ayers Energy LLC just leased more than 20,000 acres of sensitive public land. It's not an anomaly.

The Bureau of Land Management auctioned off 43 parcels of public land outside of what used to be the boundary of Bears Ears National Monument, in Utah. CREDIT: George Frey/Getty Images.
The Bureau of Land Management auctioned off 43 parcels of public land outside of what used to be the boundary of Bears Ears National Monument, in Utah. CREDIT: George Frey/Getty Images.

Ayers Energy LLC is, ostensibly, an energy company based out of either Bedford, Texas, or Cheyenne, Wyoming, depending on what day you look at the results of the Bureau of Land Management’s most recent oil and gas auction.

Public information about the company is scarce: It’s not listed as a taxable entity by the Texas Comptroller, and doesn’t appear to be a registered corporation in the state of Texas or Wyoming. In fact, a search for Ayers Energy through Vigilant, a public records database, did not yield any registration records for the company in any state.

On March 21, Ayers’ address — according to federal documents — was listed as on Pecan Bend Drive in Bedford, Texas. As of March 22, that address had changed to Central Ave in Cheyenne.

But, despite the vague and ever-changing information about Ayers Energy LLC, the company, as of March 20, owns the rights to pursue oil and gas development on 19 parcels of federally-owned lands in San Juan County, Utah, just outside of the boundary of Hovenweep National Monument.

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These parcels — totaling more than 27,475 acres — were part of a quarterly auction held by the Bureau of Land Management (BLM), meant to spur oil and gas production on public lands. The BLM had considered leasing these parcels two years ago, but deferred, citing their proximity to national monuments like Hovenweep.

All of the bids that Ayers made during the auction were on parcels located in San Juan County, the same county in which Bears Ears National Monument sits — and the majority of those bids were for land that conservationists, indigenous communities, and the National Parks Service deemed highly sensitive.

This particular BLM auction featured 43 parcels, totaling some 51,000 acres of land in southeastern Utah, including several parcels near the former boundaries of the Bears Ears National Monument — which President Donald Trump ordered to be reduced by nearly 85 percent in December of 2017 — as well as Hovenweep and Canyons of the Ancients monuments.

Twenty of the 43 parcels that were auctioned off included a cultural stipulation from the Department of Interior. This means that the land contains some kind of important cultural resource. Ayers bid on all twenty of those parcels — and came out the highest bidder on 19 of them.

In October of 2017, National Park Service wrote a letter to BLM, warning the bureau that potential oil and gas development could reduce air quality, reduce quality of dark night skies, and adversely affect groundwater on 13 parcels included in the proposed Utah lease.

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Ayers now owns development rights on 12 of those parcels — and without public information about the company or its plans for potential development, the future of the land remains a mystery.

“BLM’s ‘lease first, think later’ approach to oil and gas leasing has left the American public with a real mess: nineteen leases sold at BLM-Utah’s quarterly lease sale to a never before heard of private company on federal public lands known for their stunning density of significant cultural resources,” Stephen Bloch, legal director for the Southern Utah Wilderness Alliance, told ThinkProgress via email. “This feels like a real recipe for disaster.”

But the mess that Bloch describes is actually a fairly common occurrence.

Because of the way that BLM conducts oil and gas auctions — online, with minimal reporting requirements, and few restrictions of who can bid — it’s almost impossible to find information about the companies that are leasing public lands for development, unless those companies want their information to be found.

Auctions for oil and gas leases didn’t always used to be conducted online — they used to be held in person, giving the public a chance to see the people placing bids on public lands.

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But in-person auctions also gave the public a chance to mobilize protests and disrupt auctions, something that the environmental movement began organizing around in earnest with the debut of the Keep It In The Ground movement, which sought to end the extraction of fossil fuels on federal lands. The oil and gas industry — represented by the Western Energy Alliance (WEA) — responded by calling for online auctions to “avoid the circus atmosphere protesters create.”

In 2015, as part of the National Defense Authorization Act (NDAA), Congress granted BLM the authority to hold lease auctions online. But BLM didn’t officially use that authority until September of 2016, when it held its first online lease auction, selling off development rights to 14 parcels encompassing 4,398 acres of federal land in Kentucky and Mississippi.

The online platform used by BLM for oil and gas lease auctions is run by EnergyNet, a member of the Western Energy Alliance. Federal law dictates that BLM can only lease to U.S. citizens or corporations, but beyond that, the restrictions for who can lease the land are almost non-existent — a buyer simply has to submit a lease bid form and pay an administrative fee, the first year’s advance rental on the lease (currently $1.50 per acre), and the total of their bid for the lease.

The lax restrictions on who can purchase public lands for oil and gas development has created an entire class of employment, known as landmen, whose sole purpose is to purchase public lands at auction while maintaining secrecy for the ultimate buyer.

Large oil and gas companies can use landmen to help obfuscate their business plans; bigger companies will also sometimes form LLCs to purchase land at an auction so that they don’t run up against regulations that limit how much acreage an entity can lease at one time.

According to Bloch, other than this most recent auction, Ayers Energy LLC hasn’t participated in any public lands auctions in Utah in the last ten years. Ayers also doesn’t operate any wells or drilling operations within the state. Combined with the fact that Ayers doesn’t appear in any registration databases, it’s possible that the company was created solely for the purpose of bidding on that particular cluster of parcels in San Juan County, Utah. It only bid on 21 parcels, all located in San Juan County, and won 19 of them.

It’s possible that Ayers is simply a small oil and gas startup. Its original address in Bedford, Texas, leads to a house tucked away in a residential neighborhood, which points to a company in its early stages looking to save on overhead operating costs of an official office. There is no phone number publicly available for Ayers, and BLM had not responded to ThinkProgress’ questions about bidder information at the time of publication.

But Ayers also has access to at least $715,000 in capital — the total cost for all 19 parcels it purchased in the auction. So if it’s a startup, it’s a startup with at least some sort of sophisticated financial backing.

It’s also possible that Ayers is a front company for a larger corporation hoping to drill — or at least explore the possibility of drilling — in San Juan County.

The county has been of particular interest for oil and gas companies, as well as the Utah state legislature, which in 2015 designated a 2.7-million acre stretch of land the “San Juan County Energy Zone,” which gave oil and gas development “preferential consideration by the land managing agency.” But it’s unclear how valuable the oil and gas resources in the area actually are, since the area is relatively inaccessible and the current low price of oil doesn’t encourage companies to spend money extracting in to hard-to-reach areas.

Still, even if companies don’t immediately start drilling exploratory wells or extracting natural resources, buying a parcel of land at a lease auction gives the company authority to develop the land by building roads, which would result in fundamental changes to the landscape.

A final — though remote — possibility is that Ayers is a front for a conservation-minded individual or group that used the auction process as a means to purchase sensitive land, thus removing it from the potential of oil or gas exploration.

It’s not unheard of for environmentalists to use this tactic. In Wyoming, for instance, the Trust for Public Land raised $8.75 million to purchase oil and gas leases in 2013 that had previously been held by a public company across 58,000 acres of sensitive land in the state’s Hoback Basin.

The tactic, however, has found less success when the land has been purchased straight from BLM at auction. In 2016, author and environmentalist Terry Tempest Williams purchased rights to 1,120 acres of public land in Utah in order to spare the land from development, but BLM denied her bid, arguing that only people committed to developing the leases can purchase the land.

Regardless of what Ayers Energy LLC is — or what it plans to do with the land — conservation and public lands experts caution that it’s a prime example of the ways in which BLM’s current leasing strategy favors anonymity over public information.

And, they caution, as the Trump administration seeks to push ahead with more oil and gas leasing on public lands, the examples of anonymous companies owning the rights to develop large portions of the country’s most sensitive lands will likely only increase.

“Secretary Zinke has created the most opaque Interior Department in history,” Aaron Weiss, media director for the Center for Western Priorities, told ThinkProgress via email. “By moving to online auctions, he’s made it even easier for anonymous bidders and shell companies to win the right to drill on America’s public lands. The Utah auction makes it clear that oil and gas interests will always come out ahead of archaeology and tribal history in Ryan Zinke’s eyes.”