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Interior Decision to Withdraw Utah Leases Draws Fire

Citing the proximity of certain parcels to landscapes of national significance and the need to conduct additional environmental review, Interior Secretary Ken Zalazar last Wednesday said the federal government will withdraw leases to develop oil and natural gas on more than 100,000 acres of public lands in northeastern Utah. His action, which drew criticism from producers, overturned the results of an oil and gas lease auction held in the final days of the Bush administration.

Salazar said he directed the Bureau of Land Management (BLM) 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. "We will take time and take a fresh look at these 77 parcels and determine whether they are appropriate for oil and gas development."

A producer group blasted the lease withdrawal. "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. This action "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.

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, according to Salazar. All told, producers at the December auction bid $7.37 million to develop 149,000 acres on 116 parcels (see NGI, 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 the agency said it has not done with the 77 parcels.

Salazar said the environmental review of the disputed parcels "was from our point of view not complete," and "I have concerns about the degree of consultation and the time of that consultation with the National Park Service" with respect to the December auction. "There are other important factors that should have been considered in that review, including the factors of air quality and impact of development on air quality in the vicinity of the parks. These are real issues and the U.S. District Court has agreed these are real issues."

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 NGI, Jan. 26).

"The Bush administration rushed ahead to sell oil and gas leases at the doorstep of some of our nation's icons, some of our nation's most treasured landscapes" in Utah, Salazar said.

He noted that the Obama administration was currently reviewing a number of "midnight" decisions by the Bush administration, which "[were] rushed without going through proper environmental review." He indicated that the Utah auction was "only one of a dozen or so" of such cases being reviewed, and said more announcements possibly overturning Bush-era decisions would come in the days and weeks ahead.

Salazar declined to comment on whether staff or other changes would be made at the Utah offices, which carried out the auction.

He also confirmed that the U.S. Attorney's Office in Utah is continuing its criminal investigation of a 27-year-old University of Utah student and self-styled environmental activist who disrupted the BLM's oil and gas auction. Tim DeChristopher threw the auction into disarray by bidding on parcels with no intention of buying them and forcing producers to bid more for sought-after acreage. He was taken into custody by federal agents and later released (see NGI, Jan. 5).

As for expanded leasing in the federal Outer Continental Shelf (OCS), Salazar said "we are looking at the offshore issue, which is very much on the table" because of the recently issued five-year leasing plan (see NGI, Jan. 19). "As President Obama has said, we believe that the OCS is a place where there may be appropriate locations for exploration and development. At this point we simply are in the process of reviewing what kind of changes ought to be made."

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