Federal government cancels yet another oil and gas lease sale in Utah

Lawsuit filed to block Biden administration’s resumption of leasing after a year-and-a-half-long pause.

(Trent Nelson | The Salt Lake Tribune) Previously drilled public land on the Green River's Horseshoe Bend, south of Vernal, on Wednesday, Nov. 17, 2021, was to auctioned for oil and gas leasing Thursday. But the Bureau of Land Management nixed the sale at the last minute after discovering a mistake in its environmental analysis. Overflight provided by LightHawk.

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The federal government’s long-anticipated resumption of oil and gas leasing on public lands got off to a rocky start this week with the cancellation of a sale in Utah and a lawsuit from environmental groups unhappy with what they see as a repudiation of President Joe Biden’s campaign pledge to combat climate change.

The Bureau of Land Management’s Utah office was to hold its first oil and gas lease auction Thursday since Biden’s arrival in the White House, offering but a single Uinta Basin parcel that came with an old natural gas well that the new lessee would be required to plug and reclaim.

McLish #3 in the Horseshoe Bend gasfield is among hundreds of unproductive wells dotting Utah’s public lands. Many of these pose a threat to the environment after their operators bailed on their reclamation obligations.

However, it turned out the BLM itself plugged this well several months ago, so the agency nixed the sale, much to the delight of environmental groups.

“We are pleased the BLM granted our protest and won’t be offering any parcels for oil and gas leasing and development in Utah at the proposed summer lease sale,” said Landon Newell, a staff attorney with the Southern Utah Wilderness Alliance (SUWA) which had protested the sale. “But it is extremely problematic that BLM is moving forward with other sales throughout the West. There’s no serious dispute that as a nation we need to quickly turn our backs on fossil fuels if we are to have any hope of avoiding the worst outcomes of the climate crisis.”

The Interior Department still planned auctions in seven other Western states this week, prompting a lawsuit from several other groups alleging the Biden administration must take more aggressive steps to limit fossil fuel production on public lands.

The burning of coal, oil and gas is the leading driver of greenhouse gas emissions blamed for global warming.

Led by the Center for Biological Diversity and Sierra Club, the environmental suit was filed Tuesday in U.S. District Court in Wyoming, where most of the 144,000 acres of proposed leases are located.

“President Biden came into office promising bold action on climate. Moving forward with these lease sales flies in the face of science and any chance for us to meet our climate goals,” Dan Ritzman, director of Sierra Club’s Lands, Water, Wildlife campaign. “For the sake of our environment and our future, we must transition away from the toxic fossil fuel industry that prioritizes handouts to oil and gas companies over the interests of local communities, wildlife, and conservation efforts.”

The suit drew a strong rebuke from industry groups, accusing environmentalists of “trying to conjure up” a legal precedent putting an end to all oil and gas development on public land.

(Brian Maffly | Tribune file photo) Pump jacks pull up hydrocarbons in the Three Rivers oil field southwest of Vernal, near Pelican Lake and the Green River, pictured on June 14, 2019.

“With obstructionist groups having challenged 3,500 recent drilling permits and 5,900 leases issued since 2015, there is a coordinated effort to drive an agenda through the courts of absolutely no federal production at all,” said Kathleen Sgamma, president of Western Energy Alliance. “Actual laws passed by Congress such as the Mineral Leasing Act [of 1920], which requires regular lease sales, and the Federal Land Policy and Management Act, which specifies that oil and natural gas is one of the primary uses of public lands, are the prevailing law of the land.”

Sgamma was already unhappy with the BLM’s decision to offer just one 160-acre parcel at Thursday’s Utah auction. With a year and a half since the last auction, she said, there is a great deal of pent-up demand for public land oil and gas leases, demand that is expected to intensify with energy prices approaching historic highs.

“The environmental lobby won’t be satisfied unless they get 100% no new leasing and development,” Sgamma fumed. “Public lands are managed in a balanced manner. Balance is a word these groups don’t understand.”

Utah’s next quarterly auction would be in September, assuming BLM decides to offer any new leases.

While industry complains that its access to Western public lands is being curtailed by the new administration, data shows plenty of land is already set aside for development and industry is sitting on hundreds of leases.

The proposed Utah lease illustrates this point, according to Newell, the SUWA lawyer. It was previously held by a Utah company known as Hot Rod Oil, which had acquired several wells on Horseshoe Bend about 25 years ago and then walked away after failing to turn a profit from their meager production.

Two of Hot Rod’s old wells were targeted by BLM’s new program using taxpayer money to plug “orphaned” wells at a cost of about $100,000 each.

Federal regulations frown on industry idling wells on federal leases for extended periods, yet Utah’s landscapes are dotted with old unproductive wells. In response to a recent Freedom of Information Act request, the BLM released a list of 642 unplugged wells in Utah that have not consistently produced oil and gas in four or more years.

In protesting the Utah sale, SUWA said there was no longer a valid rationale for offering it once the old McLish well was plugged.

“BLM’s decision to move forward with offering Parcel 7072 for development only serves to foster more lease speculation, while putting important wildlife habitat at risk,” Newell wrote in SUWA’s protest.

In a rare instance of concurrence, BLM Utah deputy state director Kent Hoffman agreed.

“At this time there is no oil and gas program need which requires that this parcel be made available for lease,” wrote Hoffman in a decision released Wednesday.