The Bureau of Land Management (BLM) Utah state office’s decision to withhold from producers oil and natural gas lease parcels that they had won Tuesday in an auction — the second botched auction in the last six months — is a “troubling trend” in the state, said an official with the Independent Petroleum Association of America (IPAA).

Dan Naatz, IPAA’s vice president of federal resources and political affairs, said he found it illogical that BLM moved forward with the Utah auction when it knew it wouldn’t be able to hand out leases for oil and gas development until two protests were resolved. “If they knew about the protests, they shouldn’t have gone forward with the sale…[This] would seem logical to me,” he said.

“All of this takes time. All of this takes money” from producers, Naatz noted. “The frustration level for producers is high…There is little confidence in the agency moving forward.”

The IPAA, which represents independent producers, “had hoped that they would have a better process in place,” Naatz said. The producer group is “certainly concerned,” and plans to “reach out to the Interior Department on the broader issue of the need for surety.” The Obama administration needs to “take action to make it simpler for our members to produce oil and natural gas,” he said.

“While we appreciate the need to address all protests to proposed lease sales, the deviation from the set procedures by accepting the late protests does not promote confidence that the Obama administration is committed to an orderly and predictable lease sale process that allows development of energy resources that belong to the American people,” said Jack Gerard, president of the American Petroleum Institute (API). API contends that the protests against the sale were filed at the last minute.

“This apparent policy of delaying oil and natural gas development — which flies in the face of public sentiment that favors greater access to domestic oil and natural gas resources — serves as a disincentive to companies [that] are willing to spend billions of dollars in America to hire American workers to produce American fuel for the American consumer,” he said.

Leases have been withheld from producers in two separate Utah auctions — one last December and one Tuesday. The Obama administration overturned the results of the December auction, saying many of the parcels were near treasured landscapes, such as national monuments (see Daily GPI, Feb. 5). Interior currently is mulling whether it should reissue any of the leases on 77 parcels that were auctioned in December and later withdrawn by the agency (see Daily GPI, June 12). And the BLM said the leases for 31 parcels, for which producers paid $1.3 million Tuesday, would be delayed for two months or more until two protests are resolved (see Daily GPI, June 24).

Megan Crandall, a spokeswoman for BLM’s Utah office, told NGI that the Tuesday lease sale was not “suspended” but rather the results were put on hold until additional reviews are conducted by federal officials. “It’s not unusual to withdraw the results or delay awarding the leases if there are protests. This is actually one of the first lease sales BLM has conducted in seven years that hadn’t been heavily protested.”

Protests were filed by two environmental groups, the Denver-based Center for Native Ecosystems and the Theodore Roosevelt Conservation Partnership (TRCP). TRCP spokesman Joe Webster told NGI that his group had followed BLM’s procedures for lease protests, which is to submit a protest at least 15 days prior to the auction. TRCP determined that additional planning was needed to ensure that “impacts to big game and sage grouse would be minimized,” he said.

“The BLM originally concluded that our protest was filed late and then today [the day of the auction] realized that they made a mistake,” Webster said. “It is a BLM error that is resulting in the suspended leases. They had our protest 15 days prior…and could have had this all determined on time if they would have followed standard operating procedures.”

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