19–006 

112TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 112–371 

BLM LIVE INTERNET AUCTIONS ACT 

JANUARY 18, 2012.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. HASTINGS of Washington, from the Committee on Natural 

Resources, submitted the following 

R E P O R T 

[To accompany H.R. 2752] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Natural Resources, to whom was referred the 

bill (H.R. 2752) to amend the Mineral Leasing Act to authorize the 

Secretary of the Interior to conduct onshore oil and gas lease sales 

through Internet-based live lease sales, and for other purposes, 

having considered the same, report favorably thereon with an 

amendment and recommend that the bill as amended do pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘BLM Live Internet Auctions Act’’. 

SEC. 2. INTERNET-BASED ONSHORE OIL AND GAS LEASE SALES. 

(a) AUTHORIZATION.—Section 17(b)(1) of the Mineral Leasing Act (30 U.S.C. 

226(b)(1)) is amended— 

(1) in subparagraph (A), in the third sentence, by inserting ‘‘, except as provided in subparagraph (C)’’ after ‘‘by oral bidding’’; and 

(2) by adding at the end the following: 

‘‘(C) In order to diversify and expand the Nation’s onshore leasing program to ensure the best return to the Federal taxpayer, reduce fraud, and secure the leasing 

process, the Secretary may conduct onshore lease sales through Internet-based bidding methods. Each individual Internet-based lease sale shall conclude within 7 

days.’’. 

(b) REPORT.—Not later than 90 days after the tenth Internet-based lease sale conducted under the amendment made by subsection (a), the Secretary of the Interior 

shall analyze the first 10 such lease sales and report to Congress the findings of 

the analysis. The report shall include— 

(1) estimates on increases or decreases in such lease sales, compared to sales 

conducted by oral bidding, in— 

(A) the number of bidders; 

(B) the average amount of bid; 

(C) the highest amount bid; and 

(D) the lowest bid; 


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(2) an estimate on the total cost or savings to the Department of the Interior 

as a result of such sales, compared to sales conducted by oral bidding; and 

(3) an evaluation of the demonstrated or expected effectiveness of different 

structures for lease sales which may provide an opportunity to better maximize 

bidder participation, ensure the highest return to the Federal taxpayers, minimize opportunities for fraud or collusion, and ensure the security and integrity 

of the leasing process. 

PURPOSE OF THE BILL

The purpose of H.R. 2752, as ordered reported, is to amend the 

Mineral Leasing Act to authorize the Secretary of the Interior to 

conduct onshore oil and gas lease sales through Internet-based live 

lease sales. 

BACKGROUND AND NEED FOR LEGISLATION

The BLM Live Internet Auctions Act (H.R. 2752) amends the 

Mineral Leasing Act to authorize the Secretary of the Interior to 

conduct onshore oil and gas lease sales through Internet-based live 

lease sales. 

Signed into law in 1920, the Minerals Leasing Act requires competitive bidding for federal onshore oil and gas leases. In 1987, the 

Leasing Reform Act required this competitive bidding be conducted 

orally. 

In 2008, a 27-year-old global warming activist named Tim 

DeChristopher placed 14 fake bids worth $1.7 million on parcels of 

federal land that the Bureau of Land Management (BLM) was auctioning off for energy development. DeChristopher was convicted of 

civil disobedience, fined $10,000, and sentenced to two years in federal prison. 

In August 2009, the Department of the Interior issued a report 

listing Internet bidding as one option to reduce fraud in the bidding process. According to the report: 

The Internet leasing auction presents potential benefits such 

as increased bidder participation and accessibility; savings to 

bidders; electronic verification of disqualified bidders; additional identification and financial verification through pre-registration and pre-certification; the potential for nationwide bidding instead of individual state auctions; and the capture of 

lease auction data for analysis, planning, and reporting. 

Additionally, in an attempt to prevent fraud in the bidding process and embrace advancing technology, Congress appropriated 

$250,000 in the Fiscal Year 2008 BLM budget for a pilot Internet 

leasing program. In 2009, BLM held a pilot auction with extremely 

positive results. 

Internet-based lease sales streamline the leasing process and reduce auction costs for the Department of the Interior. Current law 

stipulates that onshore lease auctions be done in person, while an 

Internet-based method would expand the bidder pool and allow 

more bidders access to lease auctions. H.R. 2752 would reduce the 

potential for fraud in the bidding process, increase transparency, 

save taxpayer dollars, and ensure that the taxpayers get a fair return for activities on federal land. 


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COMMITTEE ACTION

H.R. 2752 was introduced on August 1, 2011, by Congressman 

Bill Johnson (R–OH). The bill was referred to the Committee on 

Natural Resources, and within the Committee to the Subcommittee 

on Energy and Mineral Resources. On September 13, 2011, the 

Subcommittee held a hearing on the bill. On October 5, 2011, the 

Full Natural Resources Committee met to consider the bill. The 

Subcommittee on Energy and Mineral Resources was discharged by 

unanimous consent. Congressman Bill Johnson (R–OH) offered an 

amendment to the bill; the amendment was adopted by unanimous 

consent. The bill was then ordered favorably reported to the House 

of Representatives by unanimous consent. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

This Act may be cited as the ‘‘BLM Live Internet Auctions Act.’’ 

Section 2. Internet-based onshore oil and gas lease sales 

This section gives the Secretary of the Interior the authority to 

conduct Internet-based auctions for onshore leases to ensure the 

best return to the Federal taxpayer, reduce fraud, and secure the 

leasing process. Each auction should be no longer than seven days. 

This section also requires a report to Congress not more than 90 

days after the tenth Internet-based lease sale. 

COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of rule XIII 

of the Rules of the House of Representatives, the Committee on 

Natural Resources’ oversight findings and recommendations are reflected in the body of this report. 

COMPLIANCE WITH HOUSE RULE XIII 

1. Cost of Legislation. Clause 3(d)(1) of rule XIII of the Rules of 

the House of Representatives requires an estimate and a comparison by the Committee of the costs which would be incurred in carrying out this bill. However, clause 3(d)(2)(B) of that rule provides 

that this requirement does not apply when the Committee has included in its report a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the Congressional Budget Act of 1974. Under clause 

3(c)(3) of rule XIII of the Rules of the House of Representatives and 

section 403 of the Congressional Budget Act of 1974, the Committee has received the following cost estimate for this bill from the 

Director of the Congressional Budget Office: 

H.R. 2752—BLM Live Internet Auctions Act 

H.R. 2752 would allow the Bureau of Land Management (BLM) 

the option to conduct auctions for onshore oil and gas leases using 

Internet-based bidding methods. The bill also would require BLM 

to prepare a report comparing outcomes of Internet-based auctions 

to outcomes of oral auctions conducted under current law. 

Using information provided by BLM and individuals familiar 

with Internet auction methods, CBO estimates that, assuming 


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availability of appropriated funds, implementing the legislation 

would cost $2 million over the 2012–2016 period. That amount includes about $1 million to build an online system to facilitate auctions and annual costs to operate and maintain the system, which 

would be partially offset by savings associated with reducing the 

number of oral auctions conducted by BLM each year. 

H.R. 2752 could affect direct spending by increasing receipts 

from bonus bids; therefore, pay-as-you go procedures apply. Total 

bonus bids from onshore oil and gas leases averaged about $250 

million annually over the 2007–2011 period. CBO expects that any 

change in receipts resulting from allowing the agency the option to 

conduct Internet auctions for onshore oil and gas leases would not 

be significant. 

H.R. 2752 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 

The CBO staff contact for this estimate is Jeff LaFave. The estimate was approved by Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 

2. Section 308(a) of Congressional Budget Act. As required by 

clause 3(c)(2) of rule XIII of the Rules of the House of Representatives and section 308(a) of the Congressional Budget Act of 1974, 

this bill does not contain any new budget authority, credit authority, or an increase or decrease in revenues or tax expenditures. 

Using information provided by Bureau of Land Management and 

individuals familiar with Internet auction methods, CBO estimates 

that, assuming availability of appropriated funds, implementing 

the legislation would cost $2 million over the 2012–2016 period. 

That amount includes about $1 million to build an online system 

to facilitate auctions and annual costs to operate and maintain the 

system, which would be partially offset by savings associated with 

reducing the number of oral auctions conducted by BLM each year. 

H.R. 2752 could affect direct spending by increasing receipts from 

bonus bids; therefore, pay-as-you go procedures apply. Total bonus 

bids from onshore oil and gas leases averaged about $250 million 

annually over the 2007–2011 period. CBO expects that any change 

in receipts resulting from allowing the agency the option to conduct 

Internet auctions for onshore oil and gas leases would not be significant. 

3. General Performance Goals and Objectives. As required by 

clause 3(c)(4) of rule XIII, the general performance goal or objective 

of this bill, as ordered reported, is to amend the Mineral Leasing 

Act to authorize the Secretary of the Interior to conduct onshore oil 

and gas lease sales through Internet-based live lease sales. 

EARMARK STATEMENT

This bill does not contain any Congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined under clause 9(e), 

9(f), and 9(g) of rule XXI of the Rules of the House of Representatives. 

COMPLIANCE WITH PUBLIC LAW 104–4 

This bill contains no unfunded mandates. 


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PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

This bill is not intended to preempt any State, local or tribal law. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 

MINERAL LEASING ACT 

* * * * * * * 

SEC. 17. (a) * * * 

(b)(1)(A) All lands to be leased which are not subject to leasing 

under paragraphs (2) and (3) of this subsection shall be leased as 

provided in this paragraph to the highest responsible qualified bidder by competitive bidding under general regulations in units of 

not more than 2,560 acres, except in Alaska, where units shall be 

not more than 5,760 acres. Such units shall be as nearly compact 

as possible. Lease sales shall be conducted by oral bidding, except 

as provided in subparagraph (C). Lease sales shall be held for each 

State where eligible lands are available at least quarterly and more 

frequently if the Secretary of the Interior determines such sales are 

necessary. A lease shall be conditioned upon the payment of a royalty at a rate of not less than 12.5 percent in amount or value of 

the production removed or sold from the lease. The Secretary shall 

accept the highest bid from a responsible qualified bidder which is 

equal to or greater than the national minimum acceptable bid, 

without evaluation of the value of the lands proposed for lease. 

Leases shall be issued within 60 days following payment by the 

successful bidder of the remainder of the bonus bid, if any, and the 

annual rental for the first lease year. All bids for less than the national minimum acceptable bid shall be rejected. Lands for which 

no bids are received or for which the highest bid is less than the 

national minimum acceptable bid shall be offered promptly within 

30 days for leasing under subsection (c) of this section and shall remain available for leasing for a period of 2 years after the competitive lease sale. 

* * * * * * * 

(C) In order to diversify and expand the Nation’s onshore leasing 

program to ensure the best return to the Federal taxpayer, reduce 

fraud, and secure the leasing process, the Secretary may conduct onshore lease sales through Internet-based bidding methods. Each individual Internet-based lease sale shall conclude within 7 days. 

* * * * * * * 

Æ 


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