I Love It

December 24, 2008 12:28 p.m.

Earlier I flagged the AP article about the environmental activist who snuck into a Bureau of Land Management auction and managed to marginally jack up the give-away prices a bunch of oil and gas companies were going to pay to lease the land. Now it turns out, according to one of our readers, that the ‘scam’ was only possible because the Bush administration did the whole thing on a rush basis in order to get as much of the public domain given away to energy industry cronies before January 20th …

The fuss over DeChristopher stems from his disruption of a last-minute push by the Bush administration to give away public lands for a pittance. That’s apparently why the rules were changed for this auction, waiving the time-consuming prequalification procedures that would ordinarily have prevented a stunt like this. As one former BLM director put it: “It was rush before the door slams behind them: ‘Let’s get as many leases out as possible.'”

But what I really love about the story is the complaint that DeChristopher “tainted the entire auction,” by running up prices by thousands of dollars on all the lots he didn’t actually win. Honestly, I don’t understand that. How could bidders have overpaid? They knew what they were buying, and presumably, they wouldn’t have been willing to bid
more than they felt the parcels were worth. So the complaint is that DeChristopher’s intervention narrowed the spread between the value of the rights and their price at auction. I understand why the bidders are angry, but shouldn’t BLM be pleased?

Auctions work on the theory that open bidding will efficiently yield the highest price any bidder is willing to pay. DeChristopher’s stunt suggests that, for whatever reason, that’s often not the case at BLM auctions. It turns out that, when pressed, most bidders are willing to pay more, often much more. In other words, DeChristopher exposed the
fact that we’re routinely selling the rights to public land for less than its actual market value. No wonder BLM is mad.

Only a month before the raid on the public domain comes to a close.

At least for the moment.

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