BLM’s February Oil and Gas Lease Sale Nets $1.8 Million

Contact: Lola Bird, 801-539-4033, Terry Catlin, 801-539-4122
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Salt Lake City, Utah—February 20, 2007—BLM Utah’s February quarterly oil and gas lease sale netted $1.8 million dollars today. Of the 65 parcels (108,000 acres) that were offered for lease, 58 parcels (93,000 acres) were sold with bids ranging from $2 to $900 per acre.  Parcels that were not bid on will be open for noncompetitive bid for the next two years.

Of the 58 parcels sold, 46 parcels were in Iron County, where significant new interest has developed for leasing.  Bidding for Iron County parcels ranged from $2 minimum bids (per acre) to $190. Parcels at the February sale were also sold in Beaver, Carbon, Grand, San Juan, Uintah Counties.

The highest bid per acre for a parcel was $900 per acre for 40 acres in Grand County (by Deer Valley Resources of Salt Lake City) and the highest overall total for a parcel was $111,300 for 2,120 acres in Uintah County (Contex Energy in Denver). The competitive interest in the sale was demonstrated by multiple bids being received on 41 of the 58 parcels sold.

“The sale results reflect that Utah is at the heart of the Rocky Mountain oil and gas frontier,” said Terry Catlin, BLM Utah Lead for Oil and Gas Leasing. “Utah public lands are playing a critical role in meeting the region’s energy needs, particularly with natural gas development. With the active bidding we saw on parcels throughout the state today, it’s clear industry is interested in potentially untapped oil and gas reserves.”

Catlin noted that every parcel is scrutinized prior to the sale to determine if they can be offered in compliance with, among others, the National Environmental Policy Act, Endangered Species Act, National Historic Preservation Act and in conformance with the Resource Management Plan/Land Use Plan. To ensure the protection of other resources, numerous stipulations and stringent requirements are placed on leases that are issued. These may include seasonal occupancy restrictions to protect wildlife and limits on surface disturbing activities.

Once an operator proposes exploration or development on a BLM-issued lease, the Bureau carries out further environmental analysis and determines the site-specific need for various types of impact-limiting or "mitigation" measures. These measures may  include:

• revegetation (to control soil erosion and helps curb the spread of weeds)
• strategic placement of structures and machinery with colors that blend in with the landscape,
• establishment of buffer zones so affects to wildlife habitat are minimized, and –
• burying powerlines and pipelines under or adjacent to access roads to protect wildlife and minimize visual impacts.

In addition, many operators routinely use Best Management Practices, such as remote sensing to monitor well production, to minimize surface impacts.

Less than one percent of the acreage managed by the BLM experiences surface disturbance from oil and gas activity. Government estimates indicate that Federal lands contain about 68 percent of all undiscovered U.S. oil and 74 percent of undiscovered natural gas. A detailed oil and gas inventory by the Interior and Energy Departments found that Federal lands in five key Western geologic basins – located in Montana, Wyoming, Utah, Colorado, and New Mexico – contain nearly 140 million trillion cubic feet of natural gas. That is enough natural gas to supply the 56 million homes now using natural gas for the next 30 years.

The Mineral Leasing Act of 1920 and the 1987 Federal Onshore Oil and Gas Leasing Reform Act authorize leasing of Federal oil and gas resources. The 1987 law, which amended the Mineral Leasing Act, requires each BLM state office to conduct oil and gas lease sales on at least a quarterly basis. This sale was consistent with the 1969 National Environmental Policy Act (NEPA) and with the BLM’s existing land-use plans, which guide management of all activities on BLM public lands.

The BLM carries out its land-management mission under the authority of the 1976 Federal Land Policy and Management Act, which directs the agency to manage the public lands for multiple uses while protecting the natural, historical, and other resources of these lands. Environmentally sound production of domestic energy from fossil and renewable resources is a part of the BLM’s multiple-use mission, and energy from Federally managed sources accounts for more than 30 percent of America’s energy production.