Judge, attorney hammer away at Interior Secretary Ken Salazar's decision to pull Utah oil leases

SALT LAKE CITY — A federal judge on Wednesday grilled an attorney defending Interior Secretary Ken Salazar's decision to pull 77 oil and gas leases that were successfully bid on at a Salt Lake City auction in 2008, asking repeatedly how the federal government can get around the language of the law that said the leases should have gone through.

"You are fast and loose with the terms 'offer' and 'acceptance,' " Judge Dee Benson said during the questioning of Department of Justice attorney Tyler Welti.

"You keep telling me your conclusions, but tell me why … tell me how you get around the plain language?" Benson asked.

The federal judge did not issue a decision in the hearing, but he indicated at its conclusion that he would rule quickly on the issue.

That "plain language" is the key component of the statute governing such sales and leases. It says that, once parcels are offered at auction, the government shall award the bid to the highest qualified bidder and shall issue the lease.

Welti had argued that Salazar continued to have discretion to pull the leases even though money had changed hands, because the leases had yet to be physically issued with an official signature.

In a suit brought by the impacted Utah counties of Uintah, Duchesne and Carbon and joined by three oil and gas companies, attorney Robert Thompson said there was nothing in the statute or corresponding regulations that support Salazar's February 2009 decision.

"There are no regulations covering this unprecedented decision," he said. "It says (the federal government) has the right to withdraw the leases prior to the sale, not whenever (they) decide to. … Shall means shall, and may means may."

In an action that drew howls of outrage from oil companies and state and federal policymakers in Utah, Salazar withdrew 77 parcels that had been put out to bid at the Bureau of Land Management's auction in Salt Lake City.

Some of the parcels remain under review. Eight were subsequently deemed inappropriate because of purported environmental impacts, and dozens of others were allowed to go forward.

Benson, too, wondered aloud at Welti's insistence that, after an auction in which parcels are offered, bids are accepted and a "winner" is announced, the government could then change its mind.