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Interior Continues Freeze on Most Disputed Utah Leases

A special Bureau of Land Management (BLM) report issued last Thursday had some glum news for producers. It recommended that only 22% of 77 disputed oil and natural gas parcels in northeastern Utah be reissued, and that the department make significant reforms of its onshore and offshore leasing process, which could put more public land out of the reach of producers.

Of the 77 parcels, the report recommended reissuing 17 of the oil and gas parcels, deferring 52 parcels and withdrawing eight parcels from future leasing. Deferral means that the parcels may not be leased until "necessary corrections" are made, which could range from revisions to leasing documents or further National Policy Environmental Act analysis is conducted.

Parcels located in dry desert areas near Cisco, UT, and the red rock country in the southern part of the state are "ready to go forward" with leasing, an Interior official said. However leases in areas with wildlife, wilderness and scenery concerns, particularly those in proximity to Canyonlands National Park, would be deferred, he said. He noted leases located east of Arches National Park and Canyonlands National Park and some in the Desolation Canyon area will not be reissued.

In February Interior Secretary Ken Salazar withdrew the 77 parcels, which cover more than 100,000 acres, citing their proximity to national parks and the need for additional environmental review (see NGI, Feb. 9). The parcels had been bid on during a Bush-era lease sale in December 2008.

Based on recommendations in the 39-page report, Salazar said he expects to issue a secretary order in 30 days addressing the department's reorganization of how it will oversee leasing oil oil and gas resources, both onshore and offshore. "I also expect in that same time frame you will see announcements from us relative to reform in the BLM oil and gas management leasing programs," he said.

A primary recommendation in the report was that the BLM take a "much stronger role" in identifying which lease parcels should be offered in each individual lease sale.

Salazar said his upcoming actions will be based on two guiding principles: "One, we will make sure that our public lands are being managed to protect our land, our water and our wildlife. Second, we will support the development of oil and gas in the right places and in the right way."

Jack Gerard, president of the American Petroleum Institute (API), said Interior's report "is just another in a series of actions this administration has taken to delay or thwart oil and natural gas exploration in areas where its development has been designated, and where lease sales have been carefully planned." API represents oil and gas producers.

In May three independent producers and three Utah counties separately challenged Interior's action in the U.S. District Court for the District of Utah in Salt Lake City (see NGI, May 18). The case still is pending.

Sen. Bob Bennett (R-UT), a critic of Salazar's handling of the Utah sale, also called the report troubling. "This report proves what I've been saying all along -- that the Utah BLM office followed the proper procedures for reviewing the proposed lease parcels that were sold last year. This report illustrates that rules only matter to this administration when they produce certain results. They've substituted the rule of executive whim for the rule of law, creating another huge vacuum of uncertainty for future BLM leasing decisions."

But environmentalists and conservationists applauded Interior's report. "Stopping the leasing of these treasured lands to protect them from devastation by oil and gas companies was the right thing to do," said Amy Mall, senior policy analyst for the Natural Resources Defense Council.

The review and report, which was carried out by an interdisciplinary team, demonstrates that there was a "head-long rush" by the Bush administration to lease public land, Salazar said. He noted that there are areas in Utah that shouldn't have been leased during the December 2008 sale.

Following the December 2008 auction, a federal judge in Washington, DC, granted a temporary restraining order to seven environmental groups. He ruled that the Interior Department had not completed a sufficient environmental analysis of the auction areas, 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).

"The judge's decision with respect to the 77 leases was informative," and prompted Interior to not only assess the results of the Utah lease sale but how it conducts its leasing program, Salazar said.

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