Suit targets BLM oil and gas leases

CHEYENNE — An organization representing more than 400 oil and gas companies in the Rocky Mountain region filed a federal lawsuit Monday, asserting the Bureau of Land Management violated the law by failing to issue leases after receiving payment.

The suit, originating in Wyoming, is the latest legal volley in the ongoing battle over what oil and gas producers say are failed land management policies practiced by the Department of Interior.

Brought by the Western Energy Alliance, the suit contends the 118 leases in question are worth more than $4.5 million and date back as far as 2005.

"BLM continues to hold over $100 million worth of leases across the West in a nonproductive capacity and our lawsuit is seeking to change that behavior," a statement by the group said.

Formerly known as the Independent Petroleum Association of Mountain States, the Western Energy Alliance references Baseline Minerals in its lawsuit, saying it bid on leases involving a little more than 64,000 acres in Utah, paying about $544,000.

Overall, the Denver-based company spent nearly $3 million on 73 separate leases in Wyoming and Utah from November 2005 to August 2010, according to the complaint, and Salazar has not issued any of the leases.

The suit points to language in the Mineral Leasing Act which says the Interior secretary "shall accept" the highest bid from the responsible qualified bidder and leases "shall be issued" within 60 days of payment.

Despite those provisions, the industry association says the leases have been held up as part of on-shore oil reforms by Salazar's office, creating ambiguity over the bid process and uncertainty about prospects for gas and oil development.

The group also contends that an independent audit by the General Accounting Office found that the BLM failed to issue leases for protested parcels within the mandated time frame in Utah 91 percent of the time and in Wyoming at nearly 100 percent of the time over a two-year period.

Last month, a federal judge in Salt Lake City said Salazar was wrong to yank 77 leases that had been offered at a controversial BLM auction in 2008. That suit, too, hinged on the legal interpretations that distinguish "shall" from "may" and argued that Salazar lacked the discretion to pull the leases. Although Judge Dee Benson ruled Salazar had exceeded his statutory authority by withdrawing the leases after they had been offered and paid for at auction, the judge noted the suit was brought too late.

e-mail: amyjoi@desnews.com