Critics have been saying it for months. Under President Donald Trump, Utah’s scenic public lands are being sold off to the highest bidder.
But if Tuesday’s oil and gas lease auction is any indication, plenty of parcels aren’t worth bidding on, and many of those “highest” bids are pretty low.
For many critics, the results raise the question of why the Bureau of Land Management is going through the costly trouble of auctioning these leases if they mostly fetch fire-sale prices.
The online sale was Utah’s biggest offering of public lands for oil and gas leasing since the George W. Bush administration, but it appeared to be a bust — despite a resurgence in commodity prices and renewed interest in drilling after four years of dormancy. Of the 109 lease parcels offered around the state, 42 sold for the minimum $2-an-acre bid and 40 received no bids.
Still, leases were sold on 134,000 acres, including lands near Canyonlands National Park’s Horseshoe Canyon and Glen Canyon National Recreation Area.
“The effect of oil and gas leasing near an area as pristinely beautiful and important to the American West as Canyonlands National Park cannot be ignored,” said Walt Dabney, the retired park superintendent who once oversaw Canyonlands and Arches. “To drill around these lands threatens the health of surrounding communities and forever diminishes a piece of America.”
The BLM netted more than $3 million in bonus bids on the 69 parcels sold. The leases obligate the agency to accommodate energy extraction from them for at least 10 years.
Tuesday’s large offerings reflect Interior Secretary Ryan Zinke’s policy mandates to lower barriers to drilling on public lands, which required the BLM to drop “master leasing,” streamline environmental analysis, reduce opportunities for public comment, and speed the permitting and leasing processes — all to the frustration of the environmental community.
Under the new leasing guidelines, the BLM now quickly offers any land industry nominates for leasing as long as that property is eligible for development. The BLM’s December sale will be even larger, offering 225 parcels that span 330,000 acres in Utah.
“This is the textbook example of Trump’s ‘energy dominance’ agenda. That’s what it looks like here in Utah. It’s a full-on assault on our state’s wildest places,” David Pacheco, a Southern Utah Wilderness Alliance activist, said at a protest Tuesday in front of the BLM’s Salt Lake City headquarters in The Gateway.
SUWA, the Sierra Club and the Center for Biological Diversity jointly submitted a formal 43-page protest, which remains unresolved, against the sale. Among many concerns, the groups objected to the wholesale leasing of the San Rafael Desert, east of Hanksville and State Road 24.
“The oil and gas industry has been trying to get its hands on this place for many years,” Pacheco said. “The rules have changed. There is very little opportunity for public involvement. The public has been given a 30-day notice but no opportunity to comment. The only comment that was accepted was a 10-day period where we could launch a protest.”
The Western Energy Alliance, an industry trade group, has praised the BLM for offering more acreage for oil and gas leasing, arguing that a spate of big sales represented “pent-up demand” after years of restraint during the Obama administration. Some of the Utah parcels may have failed to sell because the nominating company lost interest in the years it took to make them available for sale, the group’s president, Kathleen Sgamma, wrote in an email.
She was hardly fazed by Tuesday’s low bids.
“Parcels receiving minimum bids indicate that only one company is interested in them, not that they shouldn’t be leased,” Sgamma said. Such areas are usually associated with “wildcat” operations and are not yet proved to have high potential.
“Contrast that with the high bid of $81,000 at the BLM New Mexico sales last week that brought in $972 million. That’s indicative of the red-hot Permian Basin,” Sgamma wrote. “Unfortunately, Utah doesn’t have a hot play right now like the Permian. But the bright side is that the government does pocket that leasing revenue, and if the area pans out, it would generate royalty revenue as well.”
The 40 parcels that received no bids Tuesday can now be purchased for $1.50 an acre over the counter in the BLM’s state office.
Nearly all parcels that did sell were inside a 12-by-24-mile block the BLM offered in southern Emery County covered by the now-abandoned San Rafael Desert master-leasing plan. It abuts Canyonlands' Horseshoe Canyon, home to the Grand Gallery filled with Barrier Canyon-style pictographs.
“These are world-class cultural resources,” Pacheco said, “that we simply cannot afford to have oil and gas development going on next door to.”
Other lease areas that concern environmentalist are the bluffs on the west side of Labyrinth Canyon, Sweetwater Reef, the lower San Rafael River and Robbers Roost.
A Canadian firm called North American Helium, based in Calgary, was Tuesday’s big spender, submitting winning bids on 24 parcels, more than a third of all that sold. The firm ran up bidding to $221 an acre for one 1,970-acre parcel north of Hanksville.
A player in the helium market, the firm reveals no interest in oil and gas development on its website.
BLM’s Nevada auction Tuesday, meanwhile, was an even bigger bust than Utah’s. Not one of the 144 parcels, covering nearly 300,000 acres, drew a bid.