GAO calls for more diligence in oil leases

The Utah Bureau of Land Management, during its quarterly oil and gas lease sale, is offering 241 parcels on nearly 360,000 acres in five counties as areas proposed for resource development.

But a new government report is critical of the Department of the Interior for not doing enough to encourage development of an existing cache of leases.

The BLM sale next month in Salt Lake City also includes 47 parcels proposed for geothermal development on 146,900 acres in Millard and Juab counties. It's the first time since June 2007 that the BLM has included geothermal leases in the sale.

Last month, Interior Secretary Dirk Kempthorne announced the opening of 118 million acres of BLM land and 79 million acres of National Forest Service land in the West for geothermal development. In Utah, nearly 9.5 million acres of BLM land and over 2.7 million acres of Forest Service land is on the table for geothermal drilling.

BLM officials said in a statement Tuesday that none of the parcels being offered in the sale are in federally designated wilderness areas or wilderness-study areas, which are off limits by law. However, watchdogs in recent weeks have repeatedly criticized the BLM and six of its land-management plans, contending they are not doing enough to protect environmental and cultural resources from development that includes oil-shale, oil, gas and off-road uses.

Meanwhile, the federal Government Accountability Office on Tuesday released a report advising the Interior Department to do more to "encourage diligent development" of oil and gas leases. The GAO also recommended that the Secretary of the Interior develop a strategy to evaluate options to encourage faster development of its oil and gas leases.

Last year, the Interior Department collected almost $10.5 billion in revenues from oil and gas leases. Citing an abundance of undeveloped leases, the GAO found that some states are using increased rental rates, shorter lease terms and "escalating" royalty rates.

From 1987 to 1996, the BLM in Utah issued 5,127 oil and gas leases, with only 323 of those leases being developed, or drilled, and only 225 that ended up producing oil or gas. Currently, the state BLM oversees oil and gas leases on 4.7 million acres in Utah. In 1984, that number was over 19.7 million acres of public lands.

The parcels considered in lease sales are first nominated by companies before the leases are offered up for sale. After nominations, a BLM review and a lease sale, a protest period is scheduled to resolve any objections to the proposed development.