U.S. Drilling Rights Go for Less Than a Cup of Coffee Per Acre

The Trump administration’s auction of drilling rights on roughly 300,000 acres in Nevada last September appeared to be a bust when it failed to attract any bids.

But within weeks, five oil developers quietly snapped up roughly 15% of the parcels, paying just $1.50 an acre in annual rent, compared to the average bid of $524 per acre paid during competitive auctions in the past three years.

Developers can do this because federal law allows them to anonymously nominate tracts for development, prompting the auctions, and then buy the unsold acreage at bargain-basement prices.

“This is government-sponsored gambling with public ...