Vermillion Cliffs--Grand Staircase-Escalante National Monument
BLM
U.S. DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
Calf Creek Falls Cedar Mesa Ruin Cleveland Lloyd Gallery Simpson Springs Pony Express Station Cedar Mesa
Utah
BLM>Utah>Energy>Oil and Gas>Oil and Gas Lease Sales>Oil and Gas FAQs
Print Page
Oil and Gas Leasing FAQs

Oil & Gas Leasing 101Why does BLM offer lands for oil and gas leasing? How does BLM determine what lands will be offered? Read More
Oil & Gas Environmental Review

What environmental review precedes oil and gas leasing and development?  Read More

Oil & Gas Leasing StatsHow much oil and gas is produced in Utah?   Read More

 

Under what authority does BLM offer lands for oil and gas leasing?

The Mineral Leasing Act of 1920 and the 1987 Federal Onshore Oil and Gas Leasing Reform Act authorizes oil and gas leasing on BLM, national forest, and other Federal lands, as well as private lands where the Federal government has retained mineral rights.

How often are oil and gas lease sales conducted?

The Mineral Leasing Act requires each BLM state office to conduct oil and gas lease sales at least quarterly and more frequently if the Secretary of the Interior determines such sales are necessary. Lease sales are conducted by oral bidding.

What process is used to determine what lands will be available for oil and gas leasing?

BLM determines what lands are available for leasing through the land use planning system (mandated by the Federal Land Policy & Management Act of 1976). This is the key step in the planning process where public input is most useful. Generally, BLM lands are allocated in one of four categories: open with standard stipulations, open with special terms or conditions, open but no surface occupancy allowed, or closed to leasing.

How much of BLM surface acreage is available for lease in Utah?

Approximately 17 million acres are available (open under standard stipulations, special terms or conditions or no surface occupancy), and 5 million acres are withdrawn due to wilderness study areas, national monument or withdrawal through existing land use plans.

How many acres of public lands are currently under lease for oil and gas in Utah?

Utah BLM currently administers over 3,800 oil and gas leases, containing approximately 4.3 million acres of land. Most of the oil and gas leasing is concentrated in the vicinity of existing production in the Uintah/Piceance and Paradox/San Juan basins located in northeastern and southeastern Utah.

What is the oil and gas leasing trend on public lands over the years?

Over the past several years, leasing has increased do to market forces; however, the amount of land under lease is still relatively low compared to the high in 1984-- over 19.7 million acres of public lands and Federal subsurface mineral estate lands were under lease.

Who may acquire and hold Federal oil and gas leases?

Federal oil and gas leases may be obtained and held by any adult citizen of the United States. Associations of citizens, and corporations organized under the laws of the United States or of any State also qualify.
 

What environmental review precedes oil and gas leasing and development?
 

Land Use Plans (LUPs)

analyze land uses and resources to determine what lands should be open to oil and gas leasing. This is the key step where public involvement is most helpful.
 

 

Supplemental environmental reviews

occur prior to lease sales to ensure consistency with LUPs and NEPA adequacy. Review may result in parcels being deferred for further analysis or environmental stipulations being placed on the lease (see below).
 

 

Additional site-specific analysis

occurs prior to exploration, ground disturbing activities, or development.

How does the BLM determine what specific areas will be made available at a sale?

Leasing decisions are based upon land use plans where decisions are made on availability of areas for leasing and the degree of protection required. BLM considers parcels, based upon nominations from the industry. Before deciding to offer lands, BLM does additional environmental reviews and considers new information or circumstances. Even though other important uses or resources may exist, BLM can still protect the resources and lease the land using a variety of tools and stipulations, such as limits on seasons when drilling can occur and limitations or exclusions of surface use. The process typically goes as follows:

Lands nominated are reviewed to determine if they are eligible and available for oil and gas leasing. (e.g. closed to leasing by law, withdrawn, currently leased, private lands, etc.) and in conformance with the existing land use plan.

Land is then delineated into parcels not to exceed the maximum allowable acreage of 2,560 acres. The acreage is computed and special protective stipulations are incorporated based on the existing LUP for appropriate parcels included in this preliminary listing of lands.

Field offices review to assure that the lands offered are in conformance with the LUP and in compliance with the National Environmental Policy Act (NEPA).

Field Offices make recommendations to the State office on which parcels to offer for lease. They may also recommend deleting all or part of a parcels or recommend stipulations on a lease to protect certain resources. For example, parcels offered for lease near White River include stipulations for no surface occupancy to protect the visual, plant, wildlife and recreation resources of the area. Based on the field office recommendations, the State office prepares a final list of lands available and posts a notice 60 days prior to lease in each BLM or Forest Service office where the lands are located. The notice of lease sale is also made available on the BLM Utah website.

Typically, what is the outcome of this supplemental review process?

At times significant new information or changed circumstances reveals that further environmental analysis is warranted. For example, in the June 2004 lease sale 398,000 acres were originally considered. After the review, 127,529acres were deferred for further analysis or land use planning.

Are certain lands “off limits” to oil and gas leasing?

Yes. BLM is responsible for managing the public lands for multiple uses and resources, including energy production, recreation use, grazing, among many others. Considering the resources and values that exist in specific areas, BLM determines which lands should be leased for oil and gas. This occurs in the planning process that includes public involvement and coordination with other agencies.
More than 4.7 million acres of BLM-managed lands in Utah are unavailable for oil and gas leasing, including Wilderness Study Areas, the Grand Staircase-Escalante National Monument, lands congressionally designated as 'no leasing',  and other lands identified through land use planning.

Annual Oil Production
Annual Gas Production
Coal Bed Methane Production
Other Statistics
 

How did BLM make the decision to offer lands for lease near rivers?

In some oil and gas lease sales BLM offers lands for oil and gas leasing near riverways, including those being considered for Wild and Scenic River reccomendation in planning. These special places are floated by Utahns and visitors from throughout the world, but many of them also have potential for oil and gas reserves that could help meet our Nation’s energy demands. BLM acknowledges these are special places, and is committed to protecting what makes these places special.

In most cases, BLM offers lands for oil and gas leasing with set backs from the river. These set backs vary based upon the topgraphy of specific areas. For portions of rivers with high recreational use, BLM is committed to preventing development on public land from being seen from the river way and audible to river runners after the wells are in place. In addition, BLM will use mitigation measures in this area to ensure that it does not impair the scenery and solitude as one floats the river way. Leasing lands will not guarantee development. Companies will still have to apply for exploration and drilling permits, at which point BLM may manage the area in a way that protects visitors experience on the river way. Many of these areas have been leased in the past, and the leases have expired without development.

How does BLM make decisions to offer for leases on BLM-managed lands near National Parks?

Other locations that we have taken special care in our decisions to lease have been with parcels on BLM managed lands near National Parks. BLM works with the National Park Service during land use planning to obtain input and coordinate regarding leasing of lands adjacent to or near National Park units. Additionally, we coordinate with appropriate Park Service units for each lease sale and provide descriptions of parcels under consideration, consistent with land use planning decisions.  BLM may defer the offering of parcels if they are within key viewsheds of highly visited park locations. If development is proposed on a lease after it is issued, BLM works additionally with the Park Service to mitigate impacts, once a site-specific proposal is received.

How much BLM land in the state is currently under lease?

Approximately 4.3 million acres.

Historically, what has been the trend in leasing on BLM lands in Utah?

In the mid 1980’s prior to changes in leasing regulations, approximately 16 million acres of BLM lands in the state were under lease. Over the past decade, the number of acres leased has varied between 4.5 and 3.2 million acres, a historic low. Rising demand and energy prices over the past several years has resulted in increased demand. In 2003, 3.8 million acres were reported; current estimates show 4.3 million acres under lease.

What has caused this cyclic rise and fall?

Market forces driven by the rise and fall of energy prices

How do Public Lands contribute to local and national energy needs?

Lands managed by the Department of the Interior produce one-third of all domestic coal, oil and natural gas. In addition, renewable energy infrastructure on public lands administered by BLM is also one of the main sources of renewable energy, including two geothermal plants in Southwestern Utah.

Demand for natural gas is expected to increase 50 percent over the next 20 years and oil consumption expected to increase 30 percent. Since 1970, the size of the average house has increased 55 percent while the size of the American family decreased 13 percent.

More than half of U.S. households use natural gas (55 percent). It is the primary fuel used for heating in our nation. In addition, this clean-burning fuel is being used more and more for electrical generation. Since pipeline infrastructure is the primary means for transportation of natural gas, almost of all the nation’s natural gas must be produced domestically.

A study conducted under the Energy Policy and Conservation Act of 2000 found that Federal Lands in the Western United States contain nearly 140 trillion cubic feet of natural gas – enough to heat more than 55 million homes for nearly 30 years. The study also estimated that Federal Lands contain about 68 percent of all undiscovered U.S. oil resources and 74 percent of undiscovered natural gas resources.

In 2005, Utah produced 303.6 billion cubic feet of natural gas—enough to heat approximately four million homes for one year. Utah consumes approximately half of its natural gas, making it a net exporter to other states in the region.

Why is Oil and Gas Leasing Important to Utah’s Economy?

If development occurs on Public Lands in Utah, the State receives additional royalties and local communities benefit from jobs and increased spending. Much of this funding is shared with local counties for transportation, schools and other social programs. According to a report by the Utah Energy Office, the drilling of a typical well in the Uintah Basin adds approximately 15 jobs and $360,000 in additional personal income. These jobs would be in the mineral and construction sectors, as well as indirect services such as retail. If these jobs were sustained by future development, it could have significant long-term economic impacts.

Revenues from leasing are shared equally between the federal government and the State of Utah. Since the passage for the Mineral Leasing Act in 1920, the State of Utah has received $962,468,000 from mineral revenues on federally managed public lands.

In 2005, Utah produced 15.7 million barrels of crude oil and 303.6 billion cubic feet of natural gas. However, despite recent increases, Utah’s crude oil production meets less than one-third of in-state demand, causing Utah to depend on other states and countries. Production has increased to meet the demands of this region as population has increased. Drilling in the state has also increased—from 378 wells drilled in 2002 to nearly 700 wells drilled in 2005.

Exploration and discovery of new reserves is imperative to meet rising demand while production from existing wells declines. Leasing is the first step to discovering these new reserves. Prior to drilling, industry typically conducts studies like geophysical testing to determine if mineral extraction is economically viable. Understandably, before conducting such costly studies, companies want a reasonable assurance that they will have rights and access to the resources if their research shows potential. Leasing provides this assurance, but at the same time it allows BLM the ability to implement a myriad of laws, regulations, and policies that protect other resources if oil and gas development occurs.

Why is there an increase in leasing in Utah, particularly in the central portion of the state?

Due to recent discoveries in the central portion of the state, interest in BLM oil and gas lease sales has increased. BLM has sold and issued nearly one million acres of oil and gas leases in its central Utah field offices since the 2004 discovery.

Interest in leasing is reflected in the amount of land nominated for lease sales over the past few years. What was typically nominated in a year-long period several years ago is now nominated for a single quarterly lease sale. Lease sales prior to 2004 seldom resulted in more than 100 parcels, but since then, upwards of 300 parcels have been offered in a single sale. Utah BLM has held four record breaking sales in the last three years. Since 2002, the average bid per acre for a lease has grown from $10.25 to $113.70

What is Utah's annual oil and gas production?

Utah's current oil and gas production statistics can be found at the web site for the Utah Division of Oil Gas and Mining (UDOGM). For this information, see the links below: