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Drilling

An oil drilling site sits in the Powder River Basin. The third quarter oil and gas lease sale held by the Bureau of Land Management netted $8.3 million.

By the time the federal government’s quarterly sale of public land for oil and gas sales came to a close this week, 175 parcels of land encompassing over 264,000 Wyoming acres had garnered bids from eager developers. The sale fetched $8.3 million, with about half of these earning marked for the state.

In July, the Bureau of Land Management announced it would open up for auction 210 parcels encompassing 320,511 acres, having whittled down the number of nominated parcels from its initial count of 224. Officials deferred or rejected 14 parcels due to “resource conflicts,” according to the BLM. A considerable cluster of sales were located in the Big Horn Basin.

But several Wyoming conservation groups chose not to celebrate the in-roads made for development in one of the country’s leading energy centers.

A protest filed on Aug. 17 by four conservation groups opposed the pace and scope of the quarterly sale. The sale allowed sensitive wildlife habitat to go on the auction block, the protest stated.

For instance, 35 parcels fell into sage grouse priority habitat management areas, the conservation groups said. And six parcels intersected with the protected Red Desert-to-Hoback migration corridor, a 140-mile-long migration corridor for the Sublette deer herd. Nearly 200 parcels overlapped with crucial winter range for mule deer, elk or pronghorn, according to the analysis presented by the groups.

“The BLM is continuing a pattern of reckless leasing,” John Rader, conservation advocate at the Wyoming Outdoor Council, said. “They are offering hundreds of thousands of acres of public land for oil and gas development in important wildlife habitat.”

The federal land agency failed to consider reasonable alternatives to parcels that conflict with sensitive wildlife habitats and did not sufficiently assess the environmental impacts of leasing, the protest stated.

Sale worries conservationists

Population declines in sage grouse and mule deer populations have catalyzed a diverse set of stakeholders to advance wildlife protection plans at the state level. But to Rader, the federal government keeps plowing ahead with lease sales and disregarding the efforts of the state to protect species affected by development. An advisory group released recommendations last week to Wyoming’s governor on how to protect the state’s robust migration corridors and support healthy energy development. In August, Gov. Mark Gordon signed an updated executive order that maintained 15 million acres as protected sage grouse habitat.

“The federal strategy is undermining the state strategy,” Rader said. “I think it’s because the BLM and this (federal) administration are pursuing a single-use of our public lands (for industry) above all others. This is an energy dominance strategy.”

The statewide lease sales have attracted sustained criticism from conservation groups and some landowners, who contend the Trump administration’s energy dominance strategy has unlocked a race to claim thousands of public acres in sensitive habitats for dirt cheap, at the expense of the environment and the public.

A report published in July by the Wilderness Society, the National Audubon Society and the National Wildlife Federation considered how the uptick in oil and gas development on public land could threaten the longevity of sage grouse populations.

By examining leasing and permitting data on protected land, the study ultimately found a 54 percent increase in the rate of core sage grouse land leased to oil and gas developers between October 2015 and January 2017.

But some sage grouse experts challenged the study.

Leases and permits are not an appropriate measure of actual oil and gas activity, and even with the spike in approved permits, the core sage grouse areas have had minimal rig activity, explained Bob Budd, chairman of the state’s Sage Grouse Implementation Team and executive director of the Wyoming Wildlife and Natural Resource Trust. For its part, the report does not make a definitive connection between development and sage grouse numbers.

What’s more, a geospatial analysis unveiled Thursday by the Center for Western Priorities, a conservation group, found 1.3 million acres of active leases on Wyoming land sold for $2 or less an acre, often in noncompetitive sales. The sales limit public access to sold land for recreation and compromise sensitive wildlife habitats, without appropriately compensating taxpayers, the study concluded.

“These maps show how the federal government’s outdated oil and gas leasing process is allowing industry to lock up our lands across the West for just a couple dollars an acre, forsaking valuable conservation and recreation for the public,” said Kim Stevens, campaign manager at The Wilderness Society said in a statement.

About 50 parcels in Wyoming’s third quarter sale sold for $2 an acre.

Industry responds

But Pete Obermueller, executive director of the Petroleum Association of Wyoming, said the criticism swirling around lease sales for oil and gas development has been overblown and fails to account for the sizable financial benefits it has for residents of Wyoming.

“I have pretty strong objection to the argument that lease sales are happening too much and too fast,” he said.

Claiming the winning bid at a quarterly lease sale does not mean operators can immediately drill. They must also jump through several hurdles to obtain permits before drilling can begin.

“I think that criticism is trying to convince people that leasing means every single inch (of land) becomes industrialized,” he said. “It’s simply not a fair criticism. A lot of area that gets leased doesn’t get developed. Some of these areas do get developed but it’s a small percentage of the leased area because we’ve gotten so good at minimizing our impact.”

He also pointed to the substantial financial returns for the state, and country, at a time when global energy sources are at risk. On Sept. 14, a drone strike in Saudi Arabia obliterated about half of the country’s oil supply, sending the price of oil spinning.

“With what has just happened Saudi Arabia ... you start to think there is only one country in the world that can deal with a disruption like that in terms of oil supply and it’s the U.S.,” Obermueller said. “There’s really nobody else that can help with a global disruption like that.”

This quarter’s sale’s financial returns were substantially less than June, which brought in over $22 million. But in 2018, lease sales raked in $117 million for the state. Wyoming’s coffers also receive about half of all federal royalties collected.

In fiscal year 2017, the Bureau of Land Management reports 38.7 million barrels of oil were collected on 8.4 million acres of land the agency manages. Over 13,000 leases corresponded to that production.

As for the protests submitted against the third quarter lease sale, the federal agency dismissed or denied the protests on Monday, stating it conformed with existing rules protecting wildlife in coordination with the state.

“We affirm that the parcels to be offered are in conformance with the underlying Resource Management Plans, and are compliant with the National Environmental Policy Act and Federal Land Policy and Management Act in regards to Hydraulic Fracturing, (greenhouse gas) emissions, Big Game Migration Route and Corridors, and Greater Sage-grouse and the 210 parcels that are proposed to be offered,” the decision stated.

The bureau said it continued to seek recommendations from the Wyoming Game and Fish Department to consider potential environmental impacts of oil and gas construction.

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