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Policy Integrity’s multi-year effort to make the government account for “option value” in its natural resource leasing decisions has begun to pay off. In its new proposal for offshore oil and gas leasing from 2017-2022, the Department of the Interior’s Bureau of Ocean Energy Management (BOEM) devotes 12 pages to option value and related resource valuation concepts, which will now be considered in leasing decisions. Much of this language closely resembles the arguments Policy Integrity has made to the agency repeatedly since 2009.

The government’s offshore leasing system fails to account for uncertainties about environmental harms—the system ignores “option value,” a well-established economic technique that quantifies the value of delaying decisions to acquire crucial information. As a result, the current leasing system leads to over-exploitation of natural resources and excessive environmental risk.

Policy Integrity recently submitted comments to the Bureau of Ocean Energy Management (BOEM) on its five-year offshore leasing program from 2017-2022. BOEM is charged with stewarding vital and valuable resources for the benefit of the American people. On the one hand, the agency must direct the orderly development of offshore oil and gas deposits; at the same time, the agency must safeguard the ecosystems, cultural assets, and human lives affected by resource extraction decisions, and must preserve competing uses of offshore areas. BOEM thus has a responsibility to ensure the reasonable development of offshore resources so that costs to society are appropriately balanced against the benefits generated. Moreover, BOEM must collect a fair return on any of the American people’s oil and gas reserves that are leased for private development. Finally, the agency must attend to the different effects of offshore development on different regions, ecosystems, and communities.

Policy Integrity, on behalf of the Washington, D.C.-based Center for Sustainable Economy, filed the opening brief in a lawsuit to halt illegal practices at the Bureau of Ocean Energy Management. The brief argues that incomplete and flawed economic analysis leads BOEM to sell new offshore leases too quickly and too cheaply, potentially costing the American public hundreds of billions of dollars.

Policy Integrity, along with environmental attorney Steven Sugarman, are counsel to the Center for Sustainable Economy (CSE) in their lawsuit against the Bureau of Ocean Energy Management (BOEM) to halt the agency’s first five-year outer continental shelf oil and gas leasing program approved since the Gulf oil disaster.

Currently, the federal government treats lease sales as a now-or-never decision. That’s an approach that leads to too many leases sold too quickly, at too low a price. Instead, BOEM should be waiting to sell these leases until the time is right—when they can get the highest possible price.