Below is an insightful comment I found on Reddit:
Once a company acquires a lease, it then carries those subsurface reserves as assets on its balance sheet. By doing this, a company can immediately improve its overall financial health, boost its attractiveness to shareholders and investors, and even increase its ability to borrow on favorable terms.
While industry leaders have suggested it was “absurd” to think companies would continue to shell out millions of dollars in rental fees and lease acquisitions solely to pad their balance sheets,6 the relatively low cost of federal land nonetheless provides a strong incentive for companies to do just that. Because of this, companies have the potential to directly benefit from amassing these undeveloped reserves through federal land leases, while the U.S. taxpayer loses out on revenue that could—and should—be generated from wells actually producing oil and gas products.
Meanwhile, these undeveloped leases tie up land that the federal government would otherwise manage for conservation, recreation, or other beneficial uses as required under the BLM’s multiple-use mandate.
Even as the average annual price for oil produced in the United States tripled in a decade, the minimum price the federal government charged for leases remained stagnant. In fact, for decades, the minimum bid to lease public land for fossil fuel production has been just $2 an acre. That’s a cup of coffee.
Annual rental fees, which companies pay to hold and explore federal lands before production, are just as low. And the royalty rate for oil and gas produced onshore has remained at just 12.5 percent since 1920. Those bargain prices give private companies a windfall while depriving American taxpayers of a fair return from energy production.
Instead, the public has been left to pay for many of the social and environmental costs of fossil fuel operations, from road damage to respiratory problems.