BLM oil, gas leases to send $500 million back to states, but conservation group sues over Utah leases

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ST. GEORGE —  Bureau of Land Management state offices generated $1.1 billion from oil and gas lease sales in calendar year 2018, nearly tripling the BLM’s previous highest year ever, which had been 2008, with $408 million worth of leases. However, a conservation group has already filed suit against certain leases in Utah, saying they threaten ancient cultural relics and historic sites.

The total amount of leases issued last year was nearly equivalent to the BLM’s budget for fiscal year 2018, acting U.S. Secretary of the Interior David Bernhardt stated in a Feb. 6 news release.

Bonus bids from the 28 oil and gas lease sales held in calendar year 2018 totaled $1,151,109,064, according to preliminary figures released by the BLM. Among these, a total of 1,412 parcels covering almost 1.5 million acres were leased. A bonus bid is a one-time payment in exchange for exclusive access to explore for hydrocarbons on a parcel, and it grants an exclusive lease for a set period of time.

In Utah, there were 96 parcels sold, totaling more than $2.8 million in bonus bids for nearly 140,000 acres, according to year-end figures from BLM’s Utah state office.

However, on Feb. 6, the same day as the Interior Department’s announcement about the record-breaking lease totals, the conservation group Advocates for the West filed suit in a Utah federal court on behalf of Friends of Cedar Mesa.

According to a report from Deseret News, the lawsuit targets the first of three oil and gas lease sales held in March 2018, which include areas located between Canyons of the Ancients National Monument in Colorado and the former boundaries of Bears Ears National Monument in Utah. The BLM has not yet issued the leases, and the lawsuit is seeking their removal from the agency’s listing.

The affected area contains dozens of ancient community centers and Chacoan Great Houses, the lawsuit claims. Josh Ewing, executive director of Friends of Cedar Mesa, said the parcels include at least 1,700 archaeological sites, more than 900 sites of which are eligible for listing on the national register.

“For an on-the-ground organization focused on stewardship and working constructively with government agencies, going to court is an absolute last resort for us,” Ewing was quoted as saying in the Deseret article after the suit was filed. “However, if we don’t stand up for these lands and cultural sites, no one will.”

Among states, New Mexico had by far the largest lease sale of 2018, generating approximately $972 million in bonus bids for 142 parcels, the Interior Department news release noted. 

New Mexico’s two-day lease sale, held in September, brought in more revenue than all BLM oil and gas lease sales in 2017 combined and broke all previous records.  

Forty-eight percent of lease sale revenue goes to the states, while the rest goes to the U.S. Treasury. Each state also receives half of the revenue from royalties if oil and gas is developed on the lease, the release states.

By statute, the BLM is required to offer quarterly oil and gas leases sales of available Federal lands.  BLM state offices conduct lease sales quarterly when parcels are available for lease. These lease sales represent parcels that cleared environmental review and public comment.

The BLM issues both competitive and noncompetitive leases for a 10-year period. The leases are a contract to explore and develop any potential oil and gas.  The leases may earn an extension if the lessee establishes production, otherwise they pay annual rentals.

“Responsible production of domestic energy keeps energy prices low for American families and businesses, reduces our dependence on foreign oil, creates American jobs, and generates billions of dollars in revenue to the Federal Treasury,” Bernhardt stated in the news release.

Referring to President Donald Trump’s State of the Union address on Feb. 5, Bernhardt said the president “set the stage for this administration’s second act on American energy dominance. … With a bold, new approach to energy development, and a president who recognizes that conventional wisdom is meant to be challenged, we are starting to see what a great America looks like.”

Brian Steed, BLM deputy director for policy and programs, called 2018 a  “historic year” for oil and gas.

“(It) clearly illustrates what is possible when public lands are put to work using innovation, best science, and best practices,” he said. “Our sound energy policy continues to ensure reliable, safe, abundant, and affordable energy for all Americans, without putting unnecessary burdens on industry. In fact, this policy generated nearly as much revenue as the BLM’s $1.1 billion budget for 2018.”

The BLM news release stated that the agency is a key contributor to the Trump administration’s America First Energy Plan, an all-of-the-above plan that includes oil and gas, coal, strategic minerals, and renewable sources such as wind, geothermal, and solar – all of which can be produced on public lands.

In 2017, BLM oil and gas lease sales reportedly generated $358 million. Oil and gas development on BLM-managed lands supported 284,000 jobs in fiscal year 2017 and contributed $59.6 billion in output to the U.S. economy.  

In 2019, the BLM is scheduled to hold 28 oil and gas lease sales.

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Copyright St. George News, SaintGeorgeUtah.com LLC, 2019, all rights reserved.

 

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