The Bureau of Land Management received zero bids on more than 20,000 acres offered in an oil and gas lease sale in early January in Jackson, Moffat and Garfield counties.

The result highlighted how federal mineral leasing policies collide with state regulations industry leaders said suppress production.

The auction drew no interest from the two companies that registered, with the BLM setting the minimum bid at $10 per acre.

The failed sale illustrates oil and gas industry regulatory burdens, American Petroleum Institute officials said during a press call and annual State of American Energy event in Washington, D.C., on Tuesday.

Officials advocated for comprehensive federal legislative permitting reform while Colorado imposes heavy state-level controls.

Dustin Meyer, API senior vice president of policy, economics and regulatory affairs, said federal permitting reform is the organization’s top priority.

“The permitting process is fundamentally broken,” Meyer said. “Red tape, delay, endless litigation all drive up costs, limit supply and strain reliability.”

Meyer highlighted foreign regulatory risks.

“At a moment of rising global demand, that kind of unprecedented overreach undermines competitiveness and weakens energy security,” Meyer said, referring to Europe’s Corporate Sustainability Due Diligence Directive.

During the API event panel, Houston-based liquefied natural gas company Cheniere Energy Inc. CEO Jack Fusco illustrated how regulatory overload by state, local and federal agencies creates duplicative demands that consume engineering time and slow progress.

“54 different regulatory agencies oversee our operations every fricking day,” Fusco said.

Alluding to burdensome swings in energy policy that change with every administration, Fusco demanded policy consistency.

“We need some stability, some durability in our policies,” Fusco said. “We’ve invested $50 billion in America and it would help to have some stability.”

API President and CEO Mike Sommers highlighted the skyrocketing demand for energy caused in part by the burgeoning AI data center industry.

“The status quo was not designed for the demand decade,” Sommers said. “We need durable policy that outlasts political cycles and supports long-term investment, reliability, and growth, especially when it comes to access, infrastructure, and international competitiveness.”

The One Big Beautiful Bill Act triggered the auction when 30,528 acres of nearly 51,000 offered were sold at a prior auction, generating nearly $4.9 million in revenue.

The Colorado Chamber of Commerce flagged regulatory risks.

“Our regulatory climate is now one of the greatest risks to Colorado’s business climate and future growth, and we believe it is the primary reason we’ve been losing momentum in economic competitiveness,” the chamber told The Denver Gazette.

The chamber calculated potential losses.

“Every 10% increase in regulations leads to an estimated loss of 36,000 jobs and 9,000 firms statewide,” the chamber said, adding regulations slow economic growth by at least 2% annually.

The Colorado Public Utilities Commission recently mandated a 41% carbon reduction for utilities by 2035, sparking cost worries.

“Meeting the approved goal will be … challenging and difficult to achieve,” said Michelle Aguayo, spokeswoman at Xcel Energy, in a statement.

Environmental advocates praised the PUC mandate.

“Regulators uphold strong clean heat standards despite pushback from state and utilities,” the Sierra Club said in a December news release.

The decision slates “Colorado’s major investor-owned gas utilities to achieve 41% reductions in emissions by 2035, compared to 2015 levels,” the group said.

Colorado’s Air Quality Control Commission voted 7-2 on Nov. 20 to adopt rules requiring a 50% reduction in nitrogen-oxide emissions from oil and gas operations by 2030, adding to the state’s already stringent oversight.

Gov. Jared Polis hailed the measure as a major step.

“The action will significantly improve air quality and contribute to Colorado’s efforts to achieve reduced and safer levels of ozone pollution, with immediate cuts in ozone-causing chemicals in Colorado’s air in the next two years and the largest regulatory reduction in NOx from oil and gas in Colorado’s history,” he said in a letter addressed to the executive directors of the Colorado Oil and Gas Conservation Commission and the Department of Public Health and Environment.

The Colorado Oil and Gas Association acknowledged the burden.

“The adopted rules represent significant new requirements for the industry, though it provides a workable path forward that avoids the most burdensome proposals,” the association said in November.

COGA officials declined a request from The Denver Gazette for comment on the lack of BLM land sales.

Dan Haley, former president of the Colorado Oil and Gas Association, noted prior progress.

“Emissions from the state’s oil and natural gas industry have been decreasing for the past several years and the industry continuously works to reduce ozone and protect air quality,” Haley said.

A state audit released Dec. 8, 2025, exposed gaps in oil and gas oversight.

“The state has an incomplete picture of oil and gas production, emissions, and severance taxes,” said Derek Johnson, audit manager at the Office of the State Auditor. “To address this, agencies would need to change reporting requirements for the oil and gas industry, and improve agency processes for collecting the data.”

The Energy and Carbon Management Commission responded to the audit findings.

“The audit identified areas of improvement regarding the administrative collection of data from a technology standpoint and the consistency by which ECMC enforces and collects conservation levies,” the commission said.

Sara Blackhurst, president and CEO of Action Colorado, warned of effects on residents.

“This will cause excessive collateral damage for those least able to afford it,” Blackhurst told The Denver Gazette in December.

Blackhurst challenged the mandate.

“The real-world data — including from climate-conscious Colorado homeowners who already use heat pumps — shows a different picture,” Blackhurst said. “If heat pumps were truly cheaper in Colorado winters, we wouldn’t have to mandate them. People would choose them voluntarily.”

State Sen. Barbara Kirkmeyer, a Republican from Weld County, opposed the shift.

“A mandate to transition away from reliable, affordable, clean natural gas to unreliable and more costly wind and solar energy just doesn’t make sense,” Kirkmeyer told The Denver Gazette.

BLM plans to offer more than 250,000 acres for oil and gas lease sales over the next six months.

Colorado Politics reporter Marissa Ventrelli contributed to this report.