EnergyNet, an online auction company from Amarillo, Texas, is set to make a fortune from oil and gas leases. And good luck finding a way to protest.
When Texas oilman Bill Britain started the auction site EnergyNet in October 1999, it wasn’t exactly a state-of-the-art operation. Its homepage used a generic design template, an add-on to the Virtual Auctioneer software Britain bought from a Dallas firm. Like hordes of other entrepreneurs at the time, Britain hoped to bring the billion-dollar auctioneering model of eBay to an industry where he had a toehold. A decade and a half after graduating from West Point, Britain had started J-Brex Co., an Amarillo-based energy company, and had oil wells scattered all over Texas. If there was one thing he knew well, it was how to buy and sell drilling leases.
Britain boasted of “changing the way the oil and gas industry did business.” He pitched his auctions as “ON LINE REAL TIME,” but the technology was hardly game-changing—bidders were notified by email when they were outbid—and his timing, at the apex of the dot-com bubble, was terrible. “It burst almost the moment we got started,” Britain recently told Forbes.
Despite such inauspicious beginnings, by 2012 EnergyNet had become one of the industry’s biggest auction sites for oil and gas leases, even if overall sales on the platform were relatively modest. But over the next couple years, Britain began inking exclusive contracts to host lease auctions of public lands, including with state land agencies and, most notably, in 2015 with the Bureau of Land Management.
The platform took off. Less than a year into the Trump administration, transactions have risen to $1.25 billion. About half the transactions through the first three quarters of 2017, or about $600 million, were leases of public lands.
EnergyNet typically earns a 2 percent commission with state agencies; federal land commissions are set at 1.5 percent. By October of 2017, EnergyNet had earned an estimated $9 million auctioning off America’s public lands, based on an Outside analysis. Once fourth-quarter transactions are finalized, earnings could potentially rise to $15 million or more. (EnergyNet, a private company, doesn’t disclose profits.)
Donald Trump campaigned on the promise to unleash America’s estimated $50 trillion in untapped shale, oil, and natural gas reserves—a vision now being executed by Interior Secretary Ryan Zinke. Once-protected national monuments, like Bears Ears and Grand Staircase-Escalante, are now vulnerable to drilling. And Britain’s once-obscure auction site provides the platform through which this massive opening of federal lands for energy extraction will happen—all without the pesky problem of public protests.
So how did a private company become the biggest seller of America’s public lands?…(CONTINUED)