UPDATE: Interior Orders Air Review Of 77 Utah Oil, Gas Leases
11 Juni 2009 - 7:18PM
Dow Jones News
The U.S. Department of the Interior Thursday ordered an air
quality review for the area around 77 controversial oil and gas
leases in Utah, saying some may ultimately be developed, but others
would need "extensive" review.
The announcement is likely to be mixed news for the oil
industry, reviving hopes for access in the area, but also further
delaying exploration. It's also emblematic of the difficulties the
Obama administration is facing in its efforts to slow domestic oil
and gas development while the public has urged new access on the
back of high prices.
Earlier this year, the Interior Department canceled a late 2008,
Bush administration deal on 77 leases to drill for oil and gas in
wilderness areas of Utah after environmental groups protested
against development, saying Interior had failed to adequately
conduct the required environmental and cultural assessments.
In the face of a showdown with Senate lawmakers, however,
Interior Secretary Ken Salazar later acquiesced, ordering Deputy
Secretary David Hayes to review the program.
Following the Hayes report published Thursday, the Department
ordered a comprehensive air quality strategy for the region, and
told the Bureau of Land Management to conduct a final
decision-making review of the 77 blocks.
Some of the parcels in areas with existing oil and gas
development "may be appropriate for development after a final
review," Interior said. "Other parcels in and near sensitive
landscapes will require a more extensive, site-specific review,"
the agency added.
"This report helps us unwind the problems that landed these 77
parcels in court with a temporary injunction," Salazar said in a
statement. "It is clear that in the rush to sell the leases, the
previous Administration bypassed normal reviews and consultations
with the National Park Service," he said, adding that many of them
were near national parks.
Hayes' report says some of the parcels that the BLM deems
appropriate to lease after a new review could be given back to the
original winning bidders. Fourteen blocks are within existing oil
and gas infrastructure, and 16 blocks are in areas that aren't
"near particularly sensitive landscapes." The remainder require
more detailed site-specific analysis, the report said.
Although there didn't appear to be a deadline for completion of
the air quality study, the report said development on some of the
leases may be able to move forward.
According to BLM statistics on the December 2008 lease sale,
Delta Petroleum Corp. (DPTR) and Pioneer Oil & Gas (POGS) would
be two of the companies most affected by Interior's decision.
- By Ian Talley, Dow Jones Newswires; (202) 862 9285;
ian.talley@dowjones.com;