The first Wyoming oil and gas lease sales of the year closed Thursday, raking in $20 million from operators looking to drill on federal land and stoking pushback from environmental groups that say the areas overlap with sage grouse habitat and a cultural center.
Thursday’s results fall short of surprising highs set last spring, when the price of crude began to marginally improve and confidence in deregulation from the newly minted president was strong. About half of the income from Bureau of Land Management lease sales goes to Wyoming.
The two-day federal bidding war follows a one-week lease sale on state lands. Officials said they would not release the final results of the state sale as they had in the past. Those numbers will come out after members of the State Lands and Investment Board meet in mid-April.
However, the public auction is hosted online and the unapproved results show a number of pricey bids in the Powder River Basin.
The most expensive state parcel came in at more than $4,000 an acre for 36 acres north of Glenrock, an area proposed for a massive oil and gas project in the coming years. The second highest offer was in Laramie County, for more than $1,000 per acre on a parcel north of Cheyenne.
The federal auction also led to a number of high bids in the Powder River Basin, a hotspot for current oil and gas interest.
Titan Exploration paid the highest price tag at more than $12,000 per acre. The company has also paid premiums at earlier lease sales, raising eyebrows last year and stoking confidence in the Powder River Basin.
A number of protests were lodged with federal officials over this quarter’s sale, with some raising concerns about sage grouse habitat and others noting the proximity of potential drilling to locations like Fort Laramie.
The National Park Service weighed in with doubts about drilling near Fort Laramie during the environmental assessment period last year. Park officials noted the visual impact of drilling near the site as well as the increased truck traffic likely to negatively affect visitors to the fort.
The National Parks Conservation Association and Wyoming’s Powder River Basin Resource Council argued that the bureau had delayed its analysis of some key issues to the drilling stage, failing to take a wide-angle view of issues that could arise from drilling near the fort and in sage grouse habitat.
“There was almost no analysis whatsoever of the potential impacts to Fort Laramie National Historical Park in the lead up to this sale, despite requests from the National Park Service,” said Holly Sandbo, Northern Rockies Program Coordinator for National Parks Conservation Association, in a statement.
The Bureau of Land Management noted in its denial of these protests that impacts from drilling are too vague during the leasing stage. Analysis would be “misleading” and “speculative” at that time, officials wrote.
After the sale, some groups criticized Interior Secretary Ryan Zinke for his handling of sage grouse on public land.
“His indiscriminate auctioning off of the bird’s last habitat is a betrayal of his responsibility to protect our public lands and wildlife on behalf of the people,” said Michael Saul, a senior attorney at the Center for Biological Diversity in a statement. “This is an absolutely unacceptable sacrifice of the common good to private profit.”
Sage grouse are a key issue in Wyoming, particularly in light of their habitat’s overlap with oil and gas interests. Federal management plans, brokered by a coalition of federal, state and private partners over the last few years, staved off an endangered species listing for the bird.
Those plans, however, are under review and are likely to see changes in the months ahead. The decision to open up the sage grouse plans has ruffled feathers across the West, with many accusing the administration of valuing energy at the expense of wildlife.
Some sage grouse leaders in Wyoming have said that the plans can use some changes, though the vast majority of partners, from conservationists to western governors, have asked that the federal government be cautious about change. The fear of an endangered species listing looming in Wyoming’s future, where that designation would threaten the oil and gas industry, runs deep.
In total, the Bureau of Land Management leased about 152,000 acres in Wyoming for drilling last week.
The first of the oil and gas lease sales this year have not caused the shock and awe of 2017 revenue in Wyoming, which was about 800 percent higher than the previous year.
The March sale on federal lands in 2017 pulled in about $129 million. A state sale soon after got $30 million.
Wyoming’s Office of State Lands and Investments had a record year in 2017, with $60 million in total revenue. The results beat expectations by 500 percent, state officials said. About $53 million of the state lease income went to Wyoming school funding.
Federal leases hold for 10 years and pay a 12.5 percent royalty on production. State land is leased for a five-year term with a royalty rate of about 16 percent of the oil and gas’ market value.