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Front Page » February 23, 2006 » Local News » Federal oil, gas lease sale in Utah nets $9.5 million
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Federal oil, gas lease sale in Utah nets $9.5 million


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The United States Bureau of Land Management's February quarterly oil and gas lease sale netted $9.4 million dollars.

The leases offered for sale involved 78 parcels or 114,993 acres of public lands, explained the Utah BLM office.

Fifty-nine leases were sold with bids ranging from $2 to $1,100 per acre.

The 59 parcels encompass 82,641 acres of federal lands located within Utah's boundaries.

Parcels that were not bid on will be open for non-competitive bid for the next two years.

The high bids were received by International Petroleum of Salt Lake City for parcels in the Richfield BLM field office, noted the federal agency.

The high bid was $1,100 per acre and totaled $1.3 million. The high bid by parcel was $1.6 million for a 2,036 acre parcel.

Bidding in the Richfield area was particularly competitive with all 18 parcels from the field office receiving offers, pointed out the BLM. Recent discoveries in the "Central Overthrust" belt have prompted new interest by energy companies.

"The sale results reflect that Utah is at the heart of the Rocky Mountain oil and gas frontier," commented Terry Catlin, Utah BLM lead for oil and gas leasing.

"Utah public lands are playing a critical role in meeting the region's energy needs, particularly with natural gas development. With the active bidding we saw on parcels throughout the state today, it's clear industry is interested in potentially untapped oil and gas reserves," added the federal agency representative.

Catlin noted that all individual parcels are scrutinized prior to the sale to determine if the public lands can be offered in compliance with federal statutes.

The federal guidelines in question include the National Environmental Policy Act, Endangered Species Act, National Historic Preservation Act and in the resource management/land use plan.

To ensure the protection of other resources, numerous stipulations and stringent requirements are placed on leases that are issued, explained the BLM representative.

The stipulations may include seasonal occupancy restrictions to protect wildlife and limits on surface disturbing activities.

Once an operator proposes exploration or development on a BLM-issued lease, the federal agency carries out additional environmental analysis to determine the site-specific need for various types of impact limiting or mitigation measures, according to U.S. officials.

According to Catlin, the impact limiting or mitigation measures may include:

•Revegetation of sites to control soil erosion and help curb the spread of weeds.

•Strategic placement of structures and machinery with colors blending with the landscape.

•Establishment of buffer zones to minimize affects to wildlife habitat.

•Burying power lines and pipelines under or adjacent to roads accessing the projects to protect wildlife and minimize visual impacts.

In addition, many operators use best management practices when developing federal oil and gas leases, noted Caitlin. The practices include remote sensing to monitor well production and minimize surface impacts.

Less than 1 percent of the acreage managed by the BLM experiences surface disturbance from oil and gas activity, according to federal officials.

U.S. government estimates indicate that federal lands contain about 68 percent of all undiscovered oil and 74 percent of undiscovered natural gas in the nation.

A detailed oil and gas inventory completed by the U.S. interior and energy departments found that federal lands in five key western geologic basins contain nearly 140 million trillion cubic feet of natural gas.

The estimate is enough natural gas to supply the 56 million homes currently using the heating fuel for the next 30 years.

The five key geological basins are located in Utah, Montana, Wyoming, Colorado and New Mexico

The Mineral Leasing Act of 1920 and the 1987 Federal Onshore Oil and Gas Leasing Reform Act authorize leasing of federal oil and gas resources.

The 1987 law, which amended the leasing act, requires each BLM state office to conduct oil and gas lease sales on at least a quarterly basis.

The sale was consistent with the 1969 National Environmental Policy Act (NEPA) and the BLM's existing plans which guide management of all activities on federal public lands.

The BLM carries out the agency's mission under the authority of the 1976 Federal Land Policy and Management Act.

The act directs the BLM to manage the public lands for multiple uses while protecting natural, historical and other resources.

Environmentally sound production of domestic energy from fossil and renewable resources is a part of the BLM's multiple-use mission, explained the federal agency's representative.

Energy from federally managed sources presently accounts for more than 30 percent of America's total production, concluded Caitlin.


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