The Bureau of Land Management (BLM) office in Wyoming has planned a lease sale for a package of properties in the Green River Basin’s Jack Morrow Hills on Tuesday (April 1), part of a new management plan for the southwestern part of the state.
BLM’s lease sale is scheduled to be held in Cheyenne, WY. Mineral leasing was postponed in the Jack Morrow Hills in 1997 after BLM determined that a new management plan had to be completed (see NGI, July 23, 2007). Under the revised plan, which requires certain stipulations for energy development, BLM plans to auction 263 lease parcels in the Jack Morrow Hills.
The area set for the lease sale is in a part of the state that Gov. Dave Freudenthal has worked to protect. In 2006 Freudenthal urged the state’s congressional delegation to push for federal legislation to buy back natural gas leases in the area, but the proposal fell through (see NGI, April 3, 2006). Last year he called on federal officials to suspend energy leases issued in the Wyoming Range in the Upper Green River Basin and offer a refund to the producers that were planning to drill there (see NGI, Oct. 22, 2007).
Responding to some of the protests from the governor and environmental groups, BLM pulled 13 of the 229 parcels that had been scheduled to be auctioned late last year (see NGI, Dec. 10, 2007).
BLM now has received a formal petition protesting two of the leases in the northwestern part of the 263-parcel package to be auctioned Tuesday from the Wyoming Association of Churches, the Wyoming Outdoor Council and the Biodiversity Conservation Alliance (BCA). The 3,000 acres in the two protested parcels are only a fraction of the total 371,000 acres to be auctioned, noted the Outdoor Council.
The protest was lodged to protect a sage grouse habitat, said Duane Short of the BCA.
“A great deal of recent research has shown that these kinds of stipulations are simply not effective for protecting sage grouse,” said Short.
Bruce Hinchey of the Petroleum Association of Wyoming countered that the protested area had been developed by oil and gas companies since the 1920s, before the BLM revised its resource management plan, and producers always had done a good job to protect the area’s natural resources.
“Once again, let me reiterate that the companies are pretty responsible,” Hinchey said. The energy companies would be willing to “jump through all kinds of hoops if they were to get the leases to ever drill” in order to protect the environment.
“Mineral resources on public lands in Wyoming play a key role in meeting energy demands in the Rocky Mountain region,” said BLM Wyoming Acting State Director Don Simpson. “With one-third of the nation’s oil and gas production coming from public lands, oil and gas leasing helps increase domestic production of clean-burning natural gas and other mineral resources.”
Oil and gas operations on BLM-administered public lands and federal mineral estate in Wyoming produced 29.8 million bbl of oil and 1.4 Bcf of gas in 2007, he said. About 64% of the homes in Wyoming are heated with natural gas.
Auction rules call for a $2/acre minimum bid in bonuses on any parcel. A buyer has to pay the bid price for the right to obtain the federal lease, in addition to a standard $1.50/acre rental on the lease. BLM also will charge winning bidders $140/parcel to help cover administrative costs. If the lease becomes producing, the federal government will collect a royalty on production. Last year, total mineral royalties of nearly $1.5 billion were collected and shared equally with the state of Wyoming.
Leases are for a primary term of 10 years, and “will be continued as long thereafter as oil or gas is produced in paying quantities,” BLM noted.
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