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Why Don’t Environmentalists Just Buy the Land They Want To Protect? Because It’s Against the Rules.

  • Shawn Regan
  • This piece was originally published in Reason

    Stop me if you’ve heard this one before: An environmentalist walks into a federal auction and buys up the drilling rights to thousands of acres of public lands. But instead of developing the leases, he decides to keep the oil and gas in the ground, because to him the landscape is more valuable conserved than developed.

    Funny, right?

    Anyone who follows environmental politics knows that environmentalists have a reputation for being more likely to lobby, litigate, or regulate than to simply pay for what they want to protect. Yet when Tim DeChristopher went to protest an energy lease auction by the U.S. Bureau of Land Management (BLM) in 2008, he tried the more direct approach. DeChristopher walked into the lease sale in Salt Lake City and ended up outbidding developers for more than 22,000 acres of drilling rights on public lands near Moab, Utah. His reward for winning: a prison sentence.

    DeChristopher didn’t exactly bid in good faith. As a college student at the time, he went to the auction expecting to join a group of other protesters. But when he arrived, the auctioneers asked if he was there to bid.

    “They said, ‘Are you here to be a bidder?'” DeChristopher later recounted. “And I said, ‘Well, yes, I am.'” They handed him a bidder’s paddle, and once the auction began, he started bidding for leases. The prices varied. One sold for $500, or just $2.25 per acre. Another for a mere $77. Others went for much more. Soon, DeChristopher won the drilling rights to 14 parcels for a total of $1.8 million—money he didn’t have and had no intention of paying.

    Auction officials eventually caught on to DeChristopher’s bogus bids, and he was arrested and later sentenced to two years in prison for making false statements and interfering with a federal lease auction. And while DeChristopher became an environmental folk hero for monkey wrenching the process, the event raised a question: Why don’t environmentalists just bid for leases on public land?

    The answer, it turns out, is complicated. Technically, any U.S. citizen can bid for and hold leases for energy, grazing, or timber resources on public lands. But legal requirements often preclude environmentalists from participating in such markets. Federal and state rules typically require leaseholders to harvest, extract, or otherwise develop the resources, effectively shutting those who want to conserve resources out of the bidding process. Energy leasing regulations, for example, require leaseholders to extract the resources beneath their parcels. If they don’t, the leases could be canceled.

    What would happen if environmentalists did bid in good faith and paid for their leases? In 2016, the well-known author and environmental activist Terry Tempest Williams and her husband, Brooke, attempted something similar. But unlike DeChristopher, the pair paid for their leases and attempted to follow the leasing regulations. While attending a protest of a BLM auction in Utah, they learned that some of the leases that didn’t sell could be purchased afterward directly from the agency.

    “So we signed up and bought them,” Brooke says. “We paid with our debit card.” All it took was $1.50 an acre (plus an $820 processing fee) to secure the drilling rights to two leases comprising 1,120 acres near Arches National Park. The couple even created an “energy company,” Tempest Exploration Co. LLC, and began paying the annual rental fees associated with the lease.

    “We have every intention of complying with the law, even as we challenge it,” Tempest Williams later wrote in a New York Times op-ed. “We will pay the annual rent for the duration of the 10-year lease and keep whatever oil and gas lies beneath these lands in the ground.”

    After all, shouldn’t preservationists be able to spend money on the things they value, just like anyone else?

    It didn’t work. The BLM canceled the leases, alleging that Tempest Williams violated the “diligent development requirement” of the 1920 Mineral Leasing Act, which requires lessees to “exercise reasonable diligence in developing and producing” their energy resources. In an October 2016 letter, the BLM told Tempest Williams that “since you have stated publicly that you intend to keep the oil and gas resources in the ground,” referring to her comments in the Times, “the lease offers are hereby rejected.”

    The bids by DeChristopher and the Williamses were widely viewed as gimmicks—and they were. The Williamses sought to promote the burgeoning “keep it in the ground” activist movement, which seeks to fight climate change by stopping fossil fuel extraction, while DeChristopher’s bogus bidding was portrayed as an act of civil disobedience. But the examples also sparked a conversation about the core functions of the federal land leasing systems that determine the use of natural resources throughout much of the nation, and the extent to which they shut out other bidders from participating. After all, shouldn’t preservationists be able to spend money on the things they value, just like anyone else?

    ‘A No-Win for Everyone’

    Disputes between environmental activists and developers often have a predictable result: litigation. Environmental activists have perfected a zero-sum game of suing, suing, and then suing some more to halt development projects or other land-use activities they don’t like. An alphabet soup of environmental laws—from the National Environmental Policy Act (NEPA) and the Endangered Species Act (ESA) to the Federal Land Policy and Management Act (FLPMA) and the Equal Access to Justice Act (EAJA)—gives groups ample opportunities to stall projects with legal challenges or to thwart them entirely.

    But increasingly, environmentalists are testing the strategy of bidding for the rights to natural resources instead. In recent years, activists have attempted to acquire oil and gas rights in Utah, buy out ranchers’ public grazing permits in New Mexico, purchase hunting tags in Wyoming to stop grizzly bears from being killed, and bid against logging companies in Montana to keep trees standing.

    “It’s a market-based approach,” says Judi Brawer of WildEarth Guardians, an environmental group that has negotiated several grazing permit buyouts from ranchers in the Gila National Forest in New Mexico. “And it’s way more effective at the end of the day.”

    Environmentalists paying to protect landscapes isn’t itself new. Nonprofit organizations such as the Nature Conservancy do it all the time, raising millions of dollars in donations to buy land or easements to protect important landscapes from development. But the extent of these voluntary market-based exchanges is often limited to private lands. On federal and state property—which makes up most of the land in the American West—such deals are much more complicated, if not outright prohibited.

    Environmentalists are often not allowed to acquire public land leases to conserve the land—at least not without considerable difficulty. And it’s not due to a lack of financial resources. As Tempest Williams found out the hard way, federal and state laws typically prevent leaseholders from acquiring such rights for nonconsumptive purposes. For this reason, people who want to conserve lands often have no other option but to lobby for restrictive designations, regulate existing land practices, or file legal challenges to stop extractive activities on public lands they care about.

    Layers of laws and regulations are more likely to lead to years of litigation and acrimony that leave everyone frustrated.

    History helps explain why this is the case. The laws and institutions governing the use of most federal- and state-managed land emerged in the 19th and early 20th centuries for a narrow purpose: to promote the productive use of the nation’s resources. Property rights were established and maintained by actively using the resources. Concepts such as “beneficial use,” “use it or lose it,” and “the rule of capture” undergird the legal history of U.S. land policy and still serve as the basis for many of the rules that determine the use of natural resources.

    But nowadays, those institutions are often ill-equipped to accommodate new environmental demands. The typical response has been to add layers of environmental laws and regulations to these pre-existing institutions. Comprehensive land-use planning, environmental analysis, and other forms of red tape are now required for almost every federal land-use decision—all of it ostensibly designed to ensure that everyone’s concerns, coupled with the best available science, are taken into account by agency experts, who will somehow divine the ideal outcome.

    In reality, these layers of laws and regulations are more likely to lead to years of litigation and acrimony that leave everyone frustrated. That frustration has led some to look for other possible solutions.

    “We’ve really gotten away from grazing litigation because it was a no-win for everyone,” says Brawer of WildEarth Guardians. For decades, her group sued federal land agencies to reduce or rescind ranchers’ grazing permits to protect endangered species and other wildlife. And while it still occasionally litigates, she says the overall approach has shifted to now simply trying to buy ranchers’ permits.

    “I think a buyout strategy is way more effective than the litigation approach,” Brawer says, “because a litigation approach doesn’t necessarily leave everyone happy. It probably leaves most people unhappy.” Most of the time, she says, legal challenges result in small reductions in grazing on public lands, whereas a voluntary permit buyout could enable her group to remove cattle entirely from a public land allotment while also paying the rancher for the value of his permit.

    That is, if the feds allow it. Like energy lease holders, federal grazing permit holders must meet certain criteria. They must, well, actually graze the land. In addition, permit holders must own a nearby “base property” that can serve as the basis for their ranching operation, and they must be “engaged in the livestock business”—an obvious impediment to any environmental group trying to acquire grazing permits.

    Nonetheless, the activists at WildEarth Guardians have occasionally found ways to work around these requirements. The group has negotiated several deals to pay ranchers in New Mexico to relinquish their grazing permits while simultaneously petitioning the U.S. Forest Service to not reissue the unused permits to other ranchers. The process is tenuous—only Congress can retire a grazing allotment—and there is always the risk the agency could simply give the permit to another rancher who will put it to use.

    No one understands this better than Jon Marvel, founder of the Idaho-based Western Watersheds Project. Marvel made a name for himself by being the high bidder on state-owned grazing leases as a way to preserve the land for wildlife and recreation, only to repeatedly have his bids rejected by the state, which then granted the leases to ranchers instead.

    Marvel says he got the idea while hiking on a small section of state-owned land in central Idaho in 1993. The land was degraded, and the nearby creek—a spawning stream for salmon and steelhead—was filled with sediment. “It was totally beat out by cattle,” Marvel told me. “It was really ugly.” He decided he wanted to do something about it. So he called the state agency and said he wanted to bid on the lease, which was soon to expire.

    An auction was scheduled, and Marvel opened the bidding at $30. “That’s too damn much, I’m not bidding,” Marvel recalled the rancher who had previously held the permit saying. Marvel was the only bidder, but the rancher appealed the auction to the state land board.

    The state awarded the lease to the rancher anyway, setting off a lengthy legal battle over who can bid for state grazing leases. Marvel, who recently retired, ended up devoting the rest of his career to challenging ranchers’ monopoly on public grazing lands.

    Marvel’s focus on state-owned lands was, in retrospect, brilliant. State trust lands were granted to Western states by Congress at statehood for a singular purpose: to earn money for schools and other public institutions. States have a constitutional mandate to maximize revenues from trust lands, typically by leasing them for grazing, drilling, or logging. But “the Idaho Constitution does not give an ongoing birthright to public land grazing,” Marvel told local newspapers after the state rejected his initial bids. “Other valuable uses exist on these lands.”

    Time and again, Marvel was the high bidder on state leases in Idaho, only to be denied the lease. (After a second auction was ordered for the initial lease, Marvel outbid the rancher $2,000 to $10, yet the state again awarded the lease to the rancher.) The state erected all sorts of barriers to disqualify Marvel, such as establishing “qualified bidder” criteria, designating “preferred” land uses, and requiring bidders to create “grazing plans.” Only after such disputes came before the Idaho Supreme Court did Marvel’s strategy prevail, thanks to the court’s simple logic: If an environmentalist values the land more than ranchers do, then the environmentalist should get the lease.

    ‘Shoot ‘Em With a Camera’

    You’d think that’d be a straightforward proposition. But opponents offer plenty of reasons to exclude environmental bidders. How would “non-use” rights work in practice, especially if agencies consider “use” as a form of necessary land management? If non-use bidders were allowed, would they prevent agencies from properly managing natural resources?

    Those questions are at the forefront of several debates playing out in my backyard near Yellowstone National Park, which spans parts of Wyoming, Montana, and Idaho. In one case earlier this year, a proposed timber sale on state trust lands in the Gallatin Valley near Bozeman, Montana, sparked organized opposition from a group of nearby residents. Since the state is required to generate revenue from its trust lands, the group took a page out of Marvel’s playbook and attempted to bid against timber companies to keep the trees standing.

    They did so under a little-known Montana law that allows non-use bidders to acquire a “timber conservation license” on state lands. The license amounts to a temporary deferment of the timber sale. To secure it, the group, known as Save Our Gallatin Front, had to first outbid loggers for the right to cut the trees.

    In March, they did just that. The group outbid a logging company $400,000 to $376,000 to secure a conservation license that bars timber harvesting on the 443-acre area for the next 25 years. It marked the first time the license had been used to block an entire timber sale in Montana.

    “Then we had to decide, how do we raise that much money?” says Brad Webb, a board member of Save Our Gallatin Front. The group set up a GoFundMe campaign, and the donors began pouring in. Within a few weeks, the residents had raised more than enough to pay for the license.

    “I was surprised at how quickly it came in,” Webb says. “People in Bozeman are attracted here for the natural amenities. So they were really teed up to support this, especially since it was preserving one of the last remaining unlogged areas near town.”

    Would a conservation license prevent much-needed forest management?

    But from the outset, many questions surrounded the conservation option: How long should the license last? Ten years? Or maybe 100 years—the estimated time it would take the forest to regrow? The law provided no guidance, but the state eventually settled on 25 years, at which point the timber could go back up for auction. There were also management concerns. The state argued that logging is necessary to reduce wildfire risk and that the forest will be prone to insect infestation and disease if it isn’t harvested soon. Would a conservation license prevent much-needed forest management?

    Save Our Gallatin Front’s victory rankled many Republicans in the state, who argued that it was a threat to the timber industry. Soon after the group won its bid, the GOP-controlled state legislature voted to repeal Montana’s conservation license provision. In May, Democratic Gov. Steve Bullock signed the repeal into law, prohibiting any future use of conservation licenses on state lands in Montana.

    Webb thinks the law’s repeal was shortsighted and anti-competitive. “Some of the people that put this forward were less concerned about the state’s fiduciary responsibility to maximize revenues,” he says. “The state made more money from us than they did from the timber industry, because we won the bid. It was more, ‘Let’s subsidize the timber industry.'”

    An ongoing debate over grizzly bear hunting near Yellowstone raises related concerns. Last year, Wyoming implemented a controversial lottery to issue licenses to hunt grizzlies, which had been recently removed from the endangered species list. Some environmentalists were outraged, and a campaign called “Shoot ‘Em With a Camera—Not a Gun” emerged. The group enlisted nonhunters to pay to enter the lottery and, if awarded one of 22 bear hunting tags, to refrain from using it, thus preventing bears from being killed.

    Thomas Mangelsen, a well-known wildlife photographer and outspoken critic of grizzly bear hunting, was one of the lucky few who drew a tag. His plan: “I’m going to go hunt bears with a camera,” he told a local paper. “I’m going to try to get a few good pictures, and do what I applied for.”

    In the end, the hunt itself was shelved after a federal judge restored endangered species protections for the bears just days before hunting season began. But the idea of using hunting tags to prevent animals from being hunted had raised many concerns: If nonhunters could acquire hunting tags, would they thwart the state’s ability to control wildlife populations, which is often done through managed hunting? Would allowing nonhunters to participate diminish hunters’ longstanding influence over state fish and wildlife agencies?

    There are other objections to non-use bidding. Public grazing leases are often interconnected with private ranchlands, and some fear opening those to environmentalist bidders would threaten the viability of rural ranching communities. And royalties derived from oil and gas extraction often provide lucrative revenue streams to federal, state, and local coffers, including public schools. Some are concerned that non-use bidders, to the extent they are allowed to prevail, could jeopardize those revenues.

    Bidding Is Best

    The trouble is, no one is happy with the status quo either. Constant conflict and litigation are not exactly favorable to traditional land users. Livestock grazing on federal lands has declined more than 50 percent since the 1950s, in part due to environmental regulations that have weakened ranchers’ grazing privileges and pitted them against environmentalists in zero-sum legal fights. Likewise, timber harvests on federal lands have fallen nearly 80 percent since the 1980s.

    “The bottom line is that if a rancher gets all their cows kicked off the land [through litigation], he or she is screwed,” says Brawer of WildEarth Guardians. “Buyouts provide an opportunity for ranchers.”

    They are also a pragmatic solution to today’s grazing challenges, says Kit Fischer of the National Wildlife Federation, which has negotiated permit buyouts in the Yellowstone region using an approach similar to WildEarth Guardians’. Fischer’s group, unlike some others, is not anti-livestock. It pursues buyouts in areas where ranchers frequently come into conflict with large carnivores such as grizzlies and wolves and aims to reduce the spread of disease from domestic sheep herds to wild ones.

    “If we can shuffle the deck in terms of how and where grazing is done, then we’re good with that,” Fischer says. “We think there’s plenty of room on the landscape for livestock grazing, but it takes a market solution to create those changes. Livestock producers likely won’t make those changes themselves because they’re invested in their allotments.”

    The lesson is not that energy development, logging, or livestock grazing is bad. Rather, it’s that environmental values are real and legitimate, and they are best expressed in ways that acknowledge existing property rights, seek an honest bargain, and reflect the opportunity costs.

    The current leasing system is not a clear win for taxpayers either. The federal government spends more money administering its grazing and timber programs than it earns from grazing leases and timber sales. And although energy development does often yield a net positive return, in some places it is likely that environmental bids could help generate even more revenue. A 2017 BLM oil and gas lease in Utah’s West Desert, for instance, earned the feds less than $15,000 in revenue, with some parcels leasing for just $2 an acre. The leases occurred in prime habitat for sage grouse, a species of considerable conservation interest, leading many environmental groups to formally protest the sale.

    What if those environmental groups could have directly bid on the leases instead? Surely they could have afforded it—they likely spent more in time and resources protesting the auction. Bidding would have generated more revenue while also giving environmentalists the protections they desired. But that wasn’t an option.

    There is widespread cynicism and skepticism about markets in environmentalist circles. And there may be legitimate concerns about how to best accommodate environmental bidding within current leasing structures. But much of the opposition is likely rooted in a desire to limit competition.

    The lesson is not that energy development, logging, or livestock grazing is bad, or that every effort to stop such activities should prevail. Rather, it’s that environmental values are real and legitimate, and they are best expressed in ways that acknowledge existing property rights, seek an honest bargain, and reflect the opportunity costs of the other forgone values associated with the land.

    “I don’t think most people are opposed to logging when it’s done correctly,” says Webb from Save Our Gallatin Front. “Most of us live in a house made of wood, and that wood has to come from somewhere.” But Webb says there are places where other values—recreation, conservation, or natural amenities—may dominate. “If somebody loves something and wants to protect it,” he says, “then let’s put up the money. People value things like open space and are often willing to pay to support it.”

    He’s right. It’s clear that many people value conservation and are willing to spend money to get it—sometimes even their own money. The only question is whether those resources will be channeled through zero-sum political means or through positive-sum market mechanisms. In any case, if competing groups cannot directly acquire or trade rights through markets, whether for use or non-use purposes, the only option is to fight it out in the political and legal arenas.

    So the next time you hear an environmental activist saying we need to save the trees or a Green New Dealer calling to abolish “farting cows,” you might wonder what’s preventing him from paying to do so right now. The answer, often, is not that he won’t but that he can’t.

    Written By
    • Shawn Regan
      Shawn Regan
      • Vice President of Research

      Shawn Regan is a research fellow and vice president of research at PERC.  He is the executive editor of PERC Reports.

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