Utah oil and gas producers balk at Obama reforms

As Interior Secretary Ken Salazar continues to institute reforms to the nation's oil and gas leasing program, a group of independent producers mostly in the Intermountain West lashed out Thursday, saying the bureaucratic hurdles being foisted on the industry are "mind-boggling and nonsensical."

The Western Business Roundtable discussion organized by the Independent Petroleum Association of Mountain States was held Thursday in Denver to showcase federal policies the association contends are choking investment opportunities out of the region. The group also says the federal government is imposing strangleholds that are capping oil and gas production.

"It's having a huge impact on our economies, not only in Uintah County, but all over the western United States," said Uintah County Commissioner Mark Raymond.

Pointing to a 44 percent loss of jobs in the oil, gas and mining sector in his county alone since 2008, Raymond said he and 90 other county commissioners and mayors in the region have penned a letter urging the Obama administration to curtail its punitive and restrictive environmental practices.

While Uintah County has tried to diversify its economy, half of its jobs are oil- and gas-related and account for 60 percent of the wages, he said.

"These are nice jobs, high-paying jobs."

The event highlighted the struggle of a small oil and gas producer, Stewart Petroleum, that completed an environmental assessment required by the Bureau of Land Management to drill nine exploratory directional wells for natural gas. That was in 2006, and although accepted by the federal land agency, the permit was subsequently challenged by an environmental group.

The company, with an investment of $9 million already made, completed another environmental assessment that although submitted last year, remains under BLM review.

Owner Daryl Stewart said each well that would have been drilled for the Vernal-area project would have created an additional 120 Uintah County jobs in support of the largest natural gas find he has ever been associated with.

"It's been gridlock. I should have six or eight or all nine wells by this time, but there is no fiduciary accountability on the part of these environmental groups."

Stewart said he has sunk millions into a project in which the permitting process that was supposed to take a few months has instead dragged onto "year four. … The uncertainty of it has me getting to the point where I'll have to sit down and close up shop in Utah on federal lands," he said.