OIL AND GAS:

Interior report shows flawed Utah lease sale

The Interior Department released a report today outlining flaws in the process used last year to auction oil and gas leases in Utah and calling for a comprehensive regional air-quality strategy and a review to decide whether to reinstate the parcels.

In January, a federal district court issued a temporary injunction against the sale of 77 Utah parcels that had been included in a December auction after environmental groups challenged them in court. In February, Interior Secretary Ken Salazar directed that the leases be withdrawn and bonus payments be returned to the bidders and ordered the review of the parcels.

The resulting report says the process leading to the auction deviated "in important respects" from the normal procedure.

The Bureau of Land Management failed to provide the National Park Service its customary opportunity to provide input on the lease sale, even though BLM expanded the lease sale from the 79 parcels that had been suggested in August 2008 to 241 parcels that were announced in November, the report says. The new parcels added without notice included some in the immediate vicinity of Arches National Park, Canyonlands National Park and Dinosaur National Monument.

The Park Service requested that BLM defer the late-added parcels from the lease sale until the next quarterly sale so it could review and comment on them, but BLM refused to do so, the report says.

BLM provided the Park Service with a "belated opportunity" to request that parcels be removed after the auction had been publicly announced, the report says. After short but intensive negotiations, BLM agreed to remove parcels that were most objectionable, it says.

On Jan. 15, Bush administration appointees representing BLM and the Forest Service signed a memorandum of understanding saying that air quality analysis would not be "appropriate" when making oil and gas planning decisions, or when undertaking "low-level energy development activity," the report says.

In February, BLM and Park Service officials met to discuss the Park Service's request to develop a plan for addressing air quality issues surrounding the three national park units, but a facilitator described the talks as ending in an "impasse," the report says.

It recommends that communication and cooperation be improved between BLM and the Park Service on leasing decisions. "It should not take a public relations melt-down to trigger a meaningful dialogue between the two agencies," the report says. It also recommends that BLM develop guidance to assist its officials in making parcel-specific leasing decisions and that BLM undertake a comprehensive air quality strategy for the region, in consultation with the Park Service, U.S. EPA and state officials.

The report concludes that it may be appropriate to reinstate some of the 77 parcels, but others should not be leased. A multidisciplinary team of BLM officials who were not involved in the issue should be appointed to make site-specific decisions, it says. It identified 14 parcels located within already-existing development areas, 16 within more limited development areas and 47 requiring more detailed analysis.

Sen. Bob Bennett (R-Utah) blocked the nomination of David Hayes to be Interior deputy secretary for nearly two months over the oil and gas leases, demanding a review and explanation of the decision.

Kathleen Sgamma, director of government affairs for the Independent Petroleum Association of Mountain States, praised the call for a review but criticized the portion of the report that dealt with three resource management plans that BLM signed four days before the lease sale was noticed to the public.

"IPAMS is happy the deputy secretary committed to doing a review of the leases in a timely manner," Sgamma said. "But the report calls into question the validity of the Utah resource management plans, despite them being the result of seven years of environmental analysis and not opening a single new acre to natural gas and oil that was not available under the Clinton administration, while adding more stringent environmental protections to all available areas."

The Utah RMPs do not provide BLM officials with guidance on whether individual parcels should be made available for oil and gas development when they are near national park units and other sensitive landscapes or when they have wilderness characteristics or other values that may not be consistent with oil and gas development, the report says. The plans also do not model existing air quality in the region or attempt to aggregate the impacts that additional oil and gas leasing may have on the area's air quality.

Steve Bloch, conservation director of the Southern Utah Wilderness Alliance, praised the report.

"We are encouraged by the Department's efforts to issue guidance on how best to protect our most sensitive natural and cultural treasures from oil and gas development, especially those with wilderness characteristics," Bloch said in a statement. "We are looking forward to working closely with the agencies as they improve the lease sale process."

Click here to read the report.

Senior reporter Ben Geman contributed.

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