After Interior Secretary Ken Salazar and Bureau of Land Management chief Bob Abbey announced in December that much untrammeled public land across the West may soon receive the new “Wild Lands” designation, Utah Gov. Gary Herbert warned Congress in March that the designation will cost Utah billions, while others in the GOP called the move a “land grab” that sent “shockwaves” across the West.
The announcement provoked Utah state lawmakers and the state’s oil and gas industry, whose temper was still simmering after Salazar rescinded 77 oil and gas leases around eastern Utah national parks in 2009. It was when those leases were being sold that activist Tim DeCristopher staged his famous protest, for which he was recently convicted and faces prison time.
Both of those events were watershed moments for the Utah oil and gas industry and its supporters in the state Legislature, industry boosters say.
Now, as a way for the state to mount a more organized assault against federal moves to moderate oil and gas development on public lands, Herbert is expected to soon sign a bill the Legislature passed this winter creating a new Utah Office of Energy Development.
The office’s mission is to put under one roof most of the state’s employees working on energy issues who are now spread throughout state government and to implement Herbert’s 10-year energy plan.
The plan lays out broad goals for both renewable and traditional energy generation, but one of its primary messages is explicit: Keep Utah’s public lands open to drilling rigs.
Lamenting that resolving conflicts with the federal government over energy development on public lands is a “long and laborious” process, one of the plan’s primary recommendations is for the state to create a strategy for the “legitimate use of Utah’s public lands for energy development purposes” by working with the federal government to strike a balance between economic and environmental sustainability.
“The goal is for us to have access to responsible energy development as we need to meet our energy baseload needs and transmission needs,” said Amanda Smith, Utah Department of Environmental Quality chief and Herbert’s energy advisor who will serve as the director of the new Office of Energy Development. She called the new office “a more organized way to approach” gaining access to federal lands for energy development.
Utah officials have grown tired of conflicting messages from the federal government about the kind of development that should or shouldn’t occur on public lands and the inability for industry and local governments to find certainty regarding energy development policy in the public lands planning process, she said.
“So, the process relied upon by local government and industry has been upended, and that has led us to look at, one, how can we be more organized as a state to address those issues and speaking with a unified voice?” she said.
The BLM’s new Wild Lands policy has everyone concerned because the oil and gas industry believes it introduces a new level of uncertainty into the oil and gas marketplace, said Lee Peacock, president of the Utah Petroleum Association.
He said the policy will contribute to a continuing federal oil and gas leasing slowdown in Utah that has occurred during the Obama administration, which could lead to the industry taking its investment money elsewhere.
Salazar’s canceling of the 77 leases, he said, was “the tip of the iceberg as far as what the future of Utah’s public lands is.”
Though the BLM’s November 2010 and February 2011 oil and gas lease sales were halted entirely ahead of a new leasing schedule for the state, leasing has hardly stopped in Utah over the last two years.
Beginning in May, the Utah BLM is implementing an oil and gas leasing reform plan, part of a larger leasing reform program the BLM began to implement last year to allow for greater environmental review. The plan stipulates that lease sales will be held quarterly as usual, but rotating among the state’s BLM field offices, giving the industry one opportunity each year to lease a specific area of the state.
The May lease sale will focus on the St. George area in southwest Utah, and the next opportunity for the industry to lease land around Arches and Canyonlands national parks is in February 2012.
The Office of Energy Development’s mission to mount a more organized effort against such federal leasing plans, Peacock said, “is of keen importance to us.”
But according to Steve Block of the Southern Utah Wilderness Alliance, the creation of the Office of Energy Development isn’t of keen importance to much at all. The notion that the Obama administration is trying to kill oil and gas development is false, he said.
Despite the industry’s concerns about certainty on public lands, oil and gas development has been booming in Utah over the past year. With 30 active drilling rigs in Utah today, there are now more than twice the number of rigs in the state than when Utah hit its two-year low in drilling activity with 14 rigs in May 2009, according to industry rig count data compiled by Houston-based Baker Hughes.
The industry started drilling, or “spudded,” 975 wells in Utah in 2010, rebounding from 2009’s six-year low of 514 spuds but still down from the state’s 2008 peak of 1,144 spudded wells, according to Utah Division of Oil, Gas and Mining data.
In northeast Utah alone, the BLM’s Vernal Field Office is expected to process 1,400 federal drilling permit applications this year.
“I have a hard time imagining how the state is going to take a more pro-industry tack than it’s taken in the recent past,” Bloch said, calling Herbert’s energy plan and the OED “sagebrush saber rattling.”
“To me, it’s much ado about nothing,” he said. “The state is already very active in trying to pursue this agenda. It’s just another face of what they’ve been trying to do for years.”
Bobby Magill can be found online at www.bobbymagill.com.