label: MINERAL LEASING

GILLETTE - Contrary to reports from state officials on Monday, Gov. Dave Freudenthal said on Tuesday that he was indeed aware that the State Lands Office was preparing to offer state mineral lease parcels in the same Pinedale region that he protested several federal mineral lease parcels earlier this month.

Oil and gas industry leaders questioned why the governor would list environmental and legal concerns over leasing federal lands for mineral development in the same region that he approved the sale of state mineral leases.

Freudenthal said according to state law, the sole management purpose of state lands is to generate revenues for schools. BLM lands, on the other hand, are under a broader set of management imperatives often described as "multiple use."

"Those same (BLM) planning strictures and obligations don't apply to the state lands, and I think it is entirely appropriate to recognize that the state should continue to do its leases," Freudenthal said in a phone interview from Santa Fe, N.M., on Tuesday, where he was attending a Western Governors Association's meeting.

On Monday, State Land Director Lynne Boomgaarden said in an interview that the governor didn't realize the state had a lease sale in the same area as the federal lease sale he protested. But on Tuesday, the governor said he had indeed been aware of the two lease sales.

On June 7, Freudenthal protested 12 federal mineral lease parcels in the Pinedale region that were offered at the Bureau of Land Management's June lease auction. He argued that it wasn't prudent to offer the parcels before the BLM's Pinedale Field Office completes its Resource Management Plan (RMP) revision.

Just two days later, the State Lands Office conducted a sale of state mineral leases that included 12 parcels in the same region where Freudenthal had protested the federal leases.

Some in the industry said the governor's actions seemed inconsistent.

"If it's going to be willy nilly here to where you just protest some and not protest others, that doesn't give us the consistency we need to have a stable work environment," said Steven Degenfelder, vice president of land operations for Double Eagle Petroleum.

Freudenthal explained that state lands - both the surface and the sub-surface mineral estate - are governed solely on the basis of revenue maximization for the schools. Federal lands are governed by a much broader set of objectives which differ between the subsurface and surface.

"Under the law, the environmental concerns are not recognized as it relates to the state section. There is no state counterpart for NEPA or a regional land planning process for state lands," Freudenthal explained.

Degenfelder said it is also confusing that the state had pulled 12 mineral lease parcels from its June 7 sale at the request of the Wyoming Game & Fish Department because it had concerns about wildlife impacts. But Freudenthal reasoned that since the Game & Fish Department raised wildlife concerns with those state parcels, the state might not get a good revenue return by leasing them.

"It just doesn't seem like there's consistency," Degenfelder said.

The State Land Board, which is chaired by Freudenthal, must approve of bids for state mineral leases after a sale is conducted. Freudenthal said the board plans to approve of the bids made for all the state leases from the June 7 sale, including those in the Pinedale region, when it meets in August.