An oil and natural gas lease sale by the Bureau of Land Management (BLM) for the Ely District in northeast Nevada on Tuesday ran into apparent uncertainty about sage grouse habitat, with only one bid for a single 473-acre parcel.
BLM had offered 97 parcels totaling more than 189,000 acres, and there were six potential bidders. There also were some protesters at the sale held in Reno. Kirkwood Oil & Gas LLC submitted a sole bid, generating $1,814 in proceeds for the quarterly sale.
The lease is for 10 years with annual rentals of $1.50/acre the first five years, and $2.00/acre for the subsequent five years until production begins. Once a lease is producing, a royalty of 12.5% is charged, a BLM spokesperson said. Nearly half of the bid and rental receipts go to the state.
A BLM official in Washington, DC, told the Associated Press that concerns about the potential listing of the sage grouse by the U.S. Fish and Wildlife Service (USFWS) as threatened or endangered were the main reason for the lone bid.
BLM said several parcels were removed from the quarterly sale, pending a determination by USFWS on the listing. The path to that federal listing has never run smooth. That includes consideration by Congress on Thursday of an omnibus appropriations (and kitchen sink) bill that reportedly includes a provision barring the Department of the Interior from moving forward on Endangered Species Act protections for the greater sage grouse. There are still protections being worked out by a coalition of western states.
Earlier this year, Noble Energy Inc.'s CEO talked bullishly about his company's intent to exploit potential shale development in northeast Nevada (see Shale Daily, March 27). In the area near Elko, Noble holds 330,000 gross acres that it estimates may hold the potential for 1.3 billion boe of gross resources (see Shale Daily, Oct. 12, 2012).
The Gunnison sage grouse was listed as “threatened” in November; its habitat is in Utah and Colorado (see Daily GPI, Nov. 11). Interior Secretary Sally Jewell said recently the Obama administration's goal is to save the sage grouse without listing it as an endangered species (see Daily GPI, Dec. 9). Greater sage grouse habitat is in 11 Western states, and a listing could impact energy operations.
Separately, an advocacy group for balancing energy development and public lands conservation, the Western Values Project (WVP), has urged the BLM and western state governors to "keep moving forward toward implementing plans for the greater sage grouse on the same timeline they've been working with in order to protect our wildlife and our western way of life." WVP contends that landowners, recreation advocates, government and the energy industry all have pushed for "fast action on the sage grouse."
WildEarth Guardians of Wyoming filed the only formal protest to the BLM sale.