Team studying withdrawn BLM leases in Utah issues recommendations

The US Bureau of Land Management should lead development of a comprehensive interagency strategy to address energy leasing, development, and related air quality concerns for other Western states, an interdisciplinary team which reviewed 77 withdrawn Utah leases said in a special report.

This story was updated with additional information Oct. 12.

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Oct. 8 -- The US Bureau of Land Management should lead development of a comprehensive interagency strategy to address energy leasing, development, and related air quality concerns for other Western states, an interdisciplinary team which reviewed 77 withdrawn Utah leases said in a special report.

It also recommended increased coordination and collaboration on oil and gas leasing and development at the federal and state levels, studying the use of interdisciplinary field reviews for all proposed lease sales, and improving interdisciplinary participation in identifying parcels to be offered.

“The report made some very important recommendations that are the foundation for change on how we develop our oil and gas resources on public lands,” US Interior Secretary Ken Salazar said as he and other DOI officials released the report Oct. 8. “We will make sure that our public lands are being managed to protect our lands, resources, and wildlife. We also will support oil and gas development in the right places.”

He ordered the leases, which Utah’s BLM state office sold in a Dec. 19 auction, withdrawn on Feb. 4 after a federal district court issued a temporary restraining order on them on Jan. 16.

US Sen. Robert B. Bennett (R-Utah) protested the withdrawal on Mar. 18 by placing a hold on David Hayes’s nomination to be deputy Interior secretary. Bennett removed the block on May 20 when Salazar agreed to have Hayes review the withdrawn leases once he was confirmed.

In that initial review on June 11, Hayes found flaws leading up to the December lease sale and recommended that BLM establish an interdisciplinary team to make site-specific decisions on whether to reoffer the parcels under the same conditions, reoffer them under different terms, or defer them from leasing. This team’s efforts led to the report just released.

Tract recommendations
Essentially, it said 17 of the withdrawn oil and gas leases should be reoffered promptly, eight should remain off-limits because of their critical resource values in other respects, and 52 should be deferred. The deferrals range from simply correcting associated leasing documents to waiting until conditions are right to assure the leases will be developed in an orderly and sensible manner, DOI officials told reporters at a press conference.

“The report helps clear off the cloud that has hung over these 77 parcels since they were first proposed and gets to the bottom of which should be leased and which, such as those near national parks, are simply not appropriate for development,” said Salazar. “It also includes several important recommendations for leasing reforms, which we will carefully review as part of our effort to improve our oil and gas programs and deliver a fair return to the taxpayer.”

Officials emphasized that the interdisciplinary team conducting the last review was able to be more thorough than the Utah BLM field office employees who prepared the resource management plans that formed the basis of decisions to offer the tracts at the December sale. “Often when BLM develops land use plans, we don’t have the luxury of conducting an inventory of resources. The team, having the chance to do this, tried to consider what’s most desirable for our public lands,” BLM Deputy Director Mike Pool said.

“We observed in our initial report that there’s simply a lack of guidance for BLM employees who are making decisions on tracts which have been nominated by companies. In Utah in particular, a large percentage of tracts were opened up with very little guidance,” said Hayes. The new report, he added, “could provide a road map to where it makes the most sense for oil and gas leasing, providing clarity. We think this will help the domestic oil and gas industry going forward.”

“This was very intensive, which is why it was a great laboratory for learning,” Salazar said. “The team found that no one did anything wrong at BLM, but it also found that the system BLM used was incomplete. How we do that in other places will be one of the issues we’ll be looking at: how to accomplish higher quality decision-making given we can’t always do this kind of intensive study. We are moving quickly to come up with reforms in BLM with respect to leasing. I expect those within 30 days.”

Visited tracts
The team’s leader, San Juan National Forest Supervisor Mark Stiles, said the group visited each of the 77 tracts or chose a good viewpoint from which to observe them, studied documents that Utah BLM employees used leading up to the lease sale as well as protests that were filed, and, during their visits, “looked the other direction from where the parcels were” at nearby national parks.

“Clearly, some areas were ready to go forward, including the dry desert areas near Cisco, Utah, as well as some red rock country near Moab,” he said. “We also saw areas which should be deferred so we can consider wildlife and scenic concerns, as well as their proximity to Canyonlands National Park. In one case, a tract looked promising but the boundary of Arches National Park was visible on the horizon. Some clearly needed to be removed, such as one which was adjacent to Canyonlands National Park or on a cliff overlooking a popular Colorado River recreation area.”

A primary conclusion, according to Stiles, was that BLM needs to take a much stronger role in deciding which lease parcels should be offered, starting with information that oil and gas producers provide in their expressions of interest and continuing with a harder look at leasing within the context of the acreage’s other multiple uses.

He said the report conceded that reviews as thorough as the one conducted for this study aren’t always possible, but added that they should be more thorough, possibly by offering fewer parcels so more field work can be done. It also recommends that BLM, the National Parks Service, Utah’s state government, and others should work on shared landscape plans for areas near Arches and Canyonlands National Parks, he said. “It should recognize that the nearly 3 million visitors annually to the Moab area are there not just for the national parks, but also for the BLM experience,” Stiles said.

“The report demonstrates there was a headlong rush for leasing in the prior administration, and it took short cuts that led to areas being leases which should not have been,” said Salazar. “It demonstrates that when we are allowing American’s ownership of these lands to be leased out for oil and gas development, we need to do it right. I believe it was not done right in the past. The controversy which arose around these 77 leases will give us a laboratory for learning.”

GOP reactions
Two Republican members of Utah’s congressional delegation were dismayed. “This report proves what I’ve been saying all along: that the Utah BLM office followed the proper procedures for reviewing the proposed lease parcels that were sold last year,” Utah Sen. Bennett said on Oct. 8. “This report illustrates that rules only matter to this administration when they produce certain results. They've substituted the rule of executive whim for the rule of law, creating another huge vacuum of uncertainty for future BLM leasing decisions.”

“While I respect the authors of this report, their findings are insulting,” added US Rep. Rob Bishop, who chairs the congressional Western Caucus. “If the policy of the Obama administration is to not develop America’s energy resources, just come out and say it. Be honest. Be transparent. The one thing I ask is please don’t hide behind misleading statements and arguments about a ‘flawed process’ or ‘a rush to judgment’ by BLM or state officials in Utah.

“I fail to see how a 9-day, on-the-ground review by a team of outsiders is better than the 7-year process of public hearings and real input that produced the comprehensive plan by professional BLM and state employees in Utah,” he added.

Rep. Doc Hastings (R-Wash.), the House Natural Resources Committee’s ranking minority member, also did not agree with the findings. “With unemployment near 10%, it’s astounding that the Obama administration is once again blocking American energy production and the creation of high-wage jobs. After withdrawing 77 parcels of land from oil and gas production in February, the administration is now only allowing 22% of these areas to be developed. The vast majority of land remains locked up, even though it has already been through an extensive 7-year environmental review process.”

Referring to Salazar’s observation that the approach taken in the latest report constitutes “a new day…a new beginning on how we deal with our resources,” Hastings said, “If this announcement is the administration’s definition of a ‘new day,’ the future of American energy does not look bright. This decision reflects the administration’s clear lack of commitment to job creation and all-of-the-above energy development.”

Industry responses
Oil and gas groups generally criticized Salazar’s decision to follow the report’s recommendations to defer re-offering 52 of the withdrawn leases and permanently remove 8 more from consideration.

“Today’s announcement that Secretary Salazar is removing 60 federal leases from development is just another in a series of actions this administration has taken to delay or thwart oil and gas exploration in areas where its development has been designated and where lease sales have been carefully planned,” American Petroleum Institute Pres. Jack N. Gerard said.

“This troubling trend means less revenue to federal, state, and local governments at a time when our nation is running a record deficit. It also means fewer jobs at a time our nation is headed toward 10% unemployment, and it means less domestic energy available when our economy recovers and demand rebounds,” he continued.

DOI chose redundant analysis over development despite 7 years of environmental analysis leading up to last December’s lease sale, the Independent Petroleum Association of Mountain States declared. “IPAMS believes all 77 leases should be reinstated. The closest parcel to a national park is four miles away, but most were several tens of miles away and all were adjacent to existing natural gas fields or leases,” noted IPAMS Government Affairs Director Kathleen Sgamma. “With this decision, our government is continuing to deny access to American energy that belongs to all Americans, and making it even more difficult to increase energy security and tackle climate change.”

Environmental organizations reacted more favorably. “Instead of adhering to a ‘multiple-use’ mandate, which provides for a variety of uses, many of which can cause harm to the natural or cultural values that these special lands were designated to protect, the new guidance prioritizes the protection of natural and cultural resources on national monuments and other areas created by proclamations or acts of Congress, like national conservation areas,” said Kevin Mack in an Oct. 8 blog posting at the Wilderness Society’s web site.

Contact Nick Snow at nicks@pennwell.com.

More in Government