Board delays some ND leases for oil drilling

BISMARCK, N.D. — More than 3,800 acres of state property in North Dakota's scenic Badlands won't be leased for oil drilling while officials develop a policy for reviewing energy exploration on environmentally sensitive land, a state board decided Friday.

The land in Billings, Bowman and Golden Valley counties in southwestern North Dakota had been on a list of tracts scheduled for a lease auction Tuesday in the state Capitol.

North Dakota's Board of University and School Lands voted Friday to remove the land from the auction list. Its chairman, Gov. Jack Dalrymple, said the leases will not be sold until the board drafts a policy determining whether land with strong conservation or environmental value should be leased.

Dalrymple said the 3,800 acres could eventually be leased. Refusing to lease state tracts will not necessarily stop oil exploration in the region, and the state can attach conditions to a lease that would help assuage environmental concerns, he said in an interview with The Associated Press.

"What we did ... was say, 'OK, let's not just be in a rush here. Let's be sure everybody understands what our policies and procedures are.' And then we'll move forward as usual," Dalrymple said. "I don't believe this is going to delay, or really impact, the amount of acres that are available for lease this spring."

The land board oversees the state Department of Trust Lands, which manages rights to explore for oil, coal and other minerals beneath 2.5 million acres of land. The board's members are Dalrymple, Attorney General Wayne Stenehjem, Treasurer Kathi Gilmore, Secretary of State Al Jaeger and Wayne Sanstead, the state superintendent of public instruction.

The trust lands department's commissioner, Lance Gaebe, said it would take less than six months to draft the policy.

The leases being auctioned Tuesday carry the right to explore for oil under the land's surface. Oil and natural gas production has been booming in western North Dakota, and competition for the leases is expected to be intense.

Lease income goes into a state trust benefitting public schools. The fund had more than $1.5 billion in assets on Sept. 30, the Department of Trust Lands' most recent financial report says. It will provide $92.5 million to schools during the two-year state budget period that started July 1.