December 20, 2008

Utah oil drilling leases go fast -- fishily fast in some cases, authorities say

Two bidders, suspected of being environmental activists, are detained.

By DeeDee Correll
December 20, 2008

Reporting from Denver -- Bidders at a federal auction Friday snapped up oil and gas leases in Utah's red-rock country, despite a legal challenge that ultimately could prevent them from drilling there.

Companies paid $48 to $270 an acre, buying up leases on 88% of the offered parcels.

The auction, which netted $7.4 million, was briefly halted Friday afternoon when authorities grew suspicious of two bidders suspected of being environmental activists who had no intention of paying.

They outbid competitors for a number of leases before officials detained them.

Critics of the auction, including actor Robert Redford, have branded the sale as a last-ditch effort by the Bush administration to allow energy development on public lands before the president leaves office. Conservationists contend that some of the parcels are too close to national parks and that federal officials have not considered the effects drilling would have on air quality and other environmental factors.

Environmental groups filed suit this week to block the sale. But late Thursday, they struck an agreement with the Bureau of Land Management that allowed the auction to proceed as long as the leases were not issued for 30 days, giving a federal judge time to consider whether the leases should go forward.

The 30-day period ends Jan. 19 -- Bush's last full day in office.

The judge said he intended to rule before that date, said Stephen Bloch, conservation director for the Southern Utah Wilderness Alliance, which is a party to the lawsuit.

BLM officials have defended the sales as part of their obligation to open federal lands to energy development in an attempt to reduce dependence on foreign oil.

"And let's not forget what energy industry jobs mean to local economies," BLM's Utah Director Selma Sierra said in a written statement.

She noted that because "oil and gas exploration is costly and highly speculative," about 6% of leases actually result in drilling.

The bureau originally planned to lease 360,000 acres in southern and eastern Utah, but it reduced that number to 132,000 acres after weeks of criticism from environmental groups and the National Park Service. It withdrew some proposed leases next to Arches National Park, on a golf course in the town of Moab and beneath the rim of Nine-Mile Canyon, which is lined with ancient Native American rock art.

But environmentalists argue that the remaining leases are adjacent to sensitive areas and other national parks or in other regions that the federal government has declared "wilderness quality."

About 100 protesters marched Friday in the snow and wind outside the BLM's Salt Lake City office, hoisting signs that read "No drilling in Arches" and "Our home is not for sale," said Terry Shepherd, director of Red Rocks Forests, who joined in the demonstration.

Inside, one man drew attention as he repeatedly outbid his competitors for some of the more contested leases.

BLM officials did not say how many leases he acquired, but observers said he bought at least 10 in notably scenic areas.

The man, who was not identified, and a companion were not arrested. Federal prosecutors will review the case next week to determine whether they violated any federal laws, said Melodie Rydalch, spokeswoman for the U.S. attorney's office in Utah.

BLM spokeswoman Mary Wilson said Friday that the agency had not decided whether to reopen the bidding for those parcels.

One industry group suggested to the media that the bidders were in cahoots with the Southern Utah Wilderness Alliance, but Bloch denied any involvement.