A major producer group Wednesday blasted the Obama administration’s decision to withdraw leases that were offered to producers in December to develop oil and natural gas on more than 100,000 acres in northeastern Utah.

“We hope [the] decision does not signal the administration is returning to the failed policies of the past, leaving much of America’s vast energy resources locked up while the nation’s demand for energy continues to grow,” said Jack Gerard, president of the America Petroleum Institute (API) in Washington, DC.

“The decision runs counter to President Barack Obama’s stated goal of reducing U.S. reliance on foreign energy sources and is at odds with the judgment of most American’s that the nation should develop more of its own oil and gas,” he said.

“With current technology and industry practices, our companies are able to develop vital energy resources while protecting the environment,” Gerard noted, adding that leases that were withdrawn involved “non-park, non-wilderness lands.”

Interior Secretary Ken Salazar said Wednesday he had directed the Bureau of Land Management not to accept producers’ bids on 77 parcels that are in “close proximity” to the Arches and Canyonlands national parks, Dinosaur National Monument and Nine Mile Canyon. He called these areas “our most treasured landscapes” in Utah. Salazar’s action overturned the results of an oil and gas lease auction held in the final days of the Bush administration.

Producers bid about $6 million on the 77 parcels, covering about 103,225 acres, during a BLM auction on Dec. 19. Any bid money accepted by the BLM will be returned to producers, Salazar said. All told, producers at the December auction bid $7.37 million to develop 149,000 acres on 116 parcels (see Daily GPI, Dec. 22, 2008).

Under the BLM lease sale process, companies bid on parcels in a public auction and the agency then reviews and evaluates the bids to decide whether to accept them. A government contract is not completed until the BLM formally accepts the bids, which it has not done with the 77 parcels.

The 77 parcels were subject to a temporary restraining order (TRO) sought by seven environmental groups. A U.S. district judge for the District of Columbia granted the TRO last month, ruling 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 Daily GPI, Jan. 21). The Department of Justice is expected to respond Friday to a motion for a preliminary injunction.

Salazar said the Utah auction was “only one of a dozen or so” such cases being reviewed and hinted that more announcements possibly overturning Bush-era decisions would come in the days and weeks ahead.

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