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Fewer Bids Cast at BLM's Utah Lease Sale

Only about half of the parcels offered at the Bureau of Land Management's (BLM) Utah office quarterly oil and natural gas lease sale were sold last Monday and the average bid was down sharply, the government agency said.

BLM sold 55 of 98 parcels totaling 76,304 acres of federal land located in the Moab, Monticello, Price, Richfield and Vernal field offices. In December BLM sold 116 of 131 parcels it offered for sale. The average bid per parcel Monday was $11,820, down 79% from $55,225 in the December auction. The average bid per acre was $8.52.

International Petroleum submitted the highest total bid per acre ($190/acre for 80-acre parcel 87) and the highest total bid for a parcel was submitted by Thames River LLC ($58,653 for 931-acre parcel 195). Both companies are based in Salt Lake City.

During the oral auction BLM received $650,116 in bonus bids for federal oil and gas lease rights. The sale also netted $114,477 in rental fees and $7,700 in administrative fees, for $772,293 in total revenues from the lease sale, BLM said.

The December lease sale drew fire from the National Park Service (NPS) in Denver for BLM's apparent failure to give NPS adequate advance notice to evaluate the potential environmental impact of a proposed lease sale (see NGI, Nov. 17, 2008). The two Interior agencies eventually smoothed over their differences, with BLM Utah State Director Selma Sierra agreeing to defer from the sale all parcels that continued to be a concern to NPS.

In early February Interior Secretary Ken Salazar overturned the results of the December Utah lease sale, directing BLM not to accept bids on 77 parcels near Arches and Canyonlands national parks, Dinosaur National Monument and Nine Mile Canyon (see NGI, Feb. 9). Producers bid about $6 million on the 77 parcels that were auctioned off during the BLM sale on Dec. 19.

A federal judge in Washington, DC subsequently granted a temporary restraining order to seven environmental groups. He ruled that Interior had not completed a sufficient environmental analysis, particularly on how air quality around Utah's Arches and Canyonlands national parks and Dinosaur National Monument might become degraded because of drilling (see NGI, Jan. 26).

Sen. Robert Bennett (R-UT) is seeking to block the nomination of David Hayes to be deputy secretary of the Department of Interior until issues related to disputed Utah oil and natural gas leases are resolved to Bennett's satisfaction (see NGI, March 23).

The December lease sale was also marred by an alleged "nuisance" bidder who apparently tried to taint the bidding process (see NGI, Dec. 22, 2008).

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