INTERIOR:

Utah lease report first step in larger oil and gas reforms, Salazar says

Recommendations from a comprehensive review of a controversial Utah lease sale will provide the foundation for an overhaul of the entire federal oil and gas program, Interior Secretary Ken Salazar said today.

Interior plans to announce reforms of the Bureau of Land Management's oil and gas leasing programs within a month, Salazar said, and a separate secretarial order will begin a reorganization of how the department oversees leasing both onshore and offshore.

The in-depth examination of the 77 Utah parcels the Obama administration put on hold in February served as a "laboratory of learning" for how to reform BLM practices, Salazar said.

The review by an 11-member interdisciplinary team, released today, showed a "headlong rush" to leasing under the Bush administration and that oil and gas management was "not done right in the past," Salazar said.

While he doubted that any BLM officials acted "nefariously" with regard to the Utah leases, he said the federal oil and gas system is set up so that information made available to BLM decision-makers is "not very complete."

"That is one of the issues... [we] will be looking at: How can we accomplish a higher-quality decision-making?" Salazar asked.

The report offered "a crucible to really understand what is happening with the respect to Bureau of Land Management lands and how they are leased for oil and gas purposes," Salazar said. "The lessons we have learned by having people take an intensive look at what happened on the ground in the decision-making will help us move forward with the major reforms that we have to make with respect to the leasing of our public lands for oil and gas."

Deputy Secretary David Hayes said there has been "simply a lack of guidance" for BLM employees and that the department aims to correct that flaw. He said the reforms will benefit the oil and gas industry by providing clarity and "sweeping away" the current situation in which every lease offered by the BLM is protested.

Of the Utah leases, the report says 17 are ready to be leased, eight are inappropriate for leasing and the remaining 52 will be deferred until further work can be done. Some of those will only need simple corrections before they can be leased, while others might need changes to land management plans or more environmental analysis, Interior officials said. The report also recommends that a comprehensive regional air quality strategy be developed.

On a national scale, the report recommends that BLM take a larger role in identifying which parcels should be leased for oil and gas drilling. The agency does not have enough resources to undertake as comprehensive a review of every parcel as it did for the 77 Utah leases, the report says. As an alternative, BLM could take steps to limit the scope of oil and gas lease offerings in a way that would ensure the opportunity to complete necessary field reviews.

For example, quarterly lease offerings could be concentrated in certain field offices and rotated around the state, allowing individual offices to have a "breather" between sales; nominations for parcels could be required further in advance; field work could be conducted in blocks, and planned and completed ahead of time; lease protesters could focus on more specific areas; and lease stipulations could be more uniform, among other steps.

The changes could have some pitfalls and would have to be carefully evaluated for their benefits and costs, the report adds.

The report also recommends more interdisciplinary participation in identifying lease parcels to be offered and ensuring better understanding of lease rights and stipulations.

Utah leases

The controversy began in January after 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, Salazar directed that the leases be withdrawn and bonus payments be returned to the bidders and ordered the review of the parcels. That resulted in a June report outlining flaws in the process used to auction the leases and calling for a regional air-quality strategy and a review to decide whether to reinstate the parcels (Greenwire, June 6).

Interior officials cited several reasons why the 11-member team made different recommendations on the 77 leases than the BLM Utah officials who originally decided they were all able to be leased. They said the team had the opportunity to conduct on-the-ground reviews of each parcel, had experts from a variety of fields, and benefited from the hindsight of legal challenges that outlined flaws in some of the leases, among other factors.

American Petroleum Institute President Jack Gerard called the decision on the Utah leases "just another in a series of actions this administration has taken to delay or thwart oil and natural gas exploration in areas where its development has been designated, and where lease sales have been carefully planned."

"This troubling trend means less revenue to federal, state and local governments at a time when our nation is running a record deficit," Gerard said in a statement. "It also means fewer jobs at a time our nation is headed toward 10 percent unemployment, and it means less domestic energy available when our economy recovers and demand rebounds."

But Nada Culver, senior counsel in the Wilderness Society's BLM Action Center, welcomed the decision.

"We are heartened so see the Department of Interior reclaiming its authority and responsibility to manage these lands for all Americans," Culver said in a statement. "We hope that the secretary will take this opportunity to protect the irreplaceable wilderness and cultural values of these places, which overshadow their potential contribution to our nation's need for fossil fuels."

Sen. Bob Bennett (R-Utah), who requested the review of the leases, said the report proves that the Utah BLM office followed the proper procedures related to the leases.

"This report illustrates that rules only matter to this administration when they produce certain results," Bennett said in a statement. "They've substituted the rule of executive whim for the rule of law, creating another huge vacuum of uncertainty for future BLM leasing decisions."

Click here to read today's report.