Oil and Gas Internet Lease Auction Pilot

Why?

2008 Consolidated Appropriations Act (Division F, Title I, 2008 Omnibus Bill, HR2764, (General Provisions, DOI)

Directed BLM to pilot Internet auction in lieu of oral auction

Removed Mineral Leasing Act requirement for oral auctions for purposes of the pilot

Pilot Overview

Purpose: examine feasibility, savings and benefits

Constructed to work with BLM systems

Limited in scope

Public Notice of Pilot

Briefings

Web pages

Workshops

Notice of competitive oil and gas lease sale

Training and Customer Service

BLM workshops for public and industry prior to pilot sale

Online tutorial

Telephone support during auction

Major components of pilot

Notice of sale parcels and stipulations Day-of-sale activities

Bidder registration

Present sale parcels

Conduct auctions online

Collect monies owed and bidder qualifications (BLM Form 3000-2)

Bidder Registration

Pre-qualified to hold federal leasesMore robust Includes “commitment to pay”Electronic identity validation via credit card

Assigned bidder number

One bidder number for each lessee

Bidder home page

Parcel Prep and Notice

Continue current practices to prep parcels

Notice of lease sale

Parcels posted online for 60 daysLink to Colorado State Office online lease sale

noticeOnline list of parcels and individual parcel

pages

Auction Particulars

Each parcel will be unique auction

Auction period is one week

Parcels scheduled to stagger every 10 minutes

Bidding Particulars

Registered bidders only

Only bidder number displays online

Ascending, fixed period, English auction

Standard and proxy bid options

After the Auction

Winning bid announced and bidder notified

Collect monies owed day-of-salepay.gov

Complete BLM Form 3000-2 online

System will track pending actions and completed actions

After the Sale

Online results

Over to the Colorado State OfficeResults list

Adjudication of bids and collection of remaining monies owed

Evaluate pilot

Analyze biddingBids per parcel—More? Less?

Bidding activity

Industry feedback

BLM feedback

Then what?

If deemed beneficial, recommend amendment to Mineral Leasing Act

Design of national online system: consider incorporating auction system into National Lease Sale System