Protest: Is public land really public? Government accused of chasing away recreationers, oil industry

Government accused of driving off recreationers, oil and gas industry

Published: Saturday, Feb. 7 2009 12:24 a.m. MST

Rep. Michael Noel, R-Kanab, right, cheers as former Utah Jazz forward Karl Malone speaks during a rally.

Jason Olson, Deseret News

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Protesters took to Utah's Capitol Hill on Friday, angry over government land-use practices they say idle the engines of off-road vehicles and stifle the prospects of oil and gas exploration.

The rowdy crowd, featuring an appearance by former Utah Jazz player Karl Malone, said government has gone too far to limit their freedoms on lands that belong to the public.

"Right now, I can't take my kid off the side of the road and teach him how to ride his motorcycle unless it's been designated by the federal government as an open area," said Scott Wheeler, a Price resident and member of the Castle Country Off-Highway Vehicle Association.

The rally also featured remarks by Kevin Carter, director of the Utah School and Institutional Trust Lands Administration, which derives nearly half of its revenue from oil and gas leases.

Carter later said he was disappointed by Interior Secretary Ken Salazar's decision this week to rescind the sale of 77 parcels of Bureau of Land Management land in Utah that were auctioned in December.

Salazar was critical of the environmental review process conducted under the Bush administration, saying it was inadequate and that much of the land was on the doorsteps of national parks and monuments.

But Carter said the action also had the effect of "sterilizing" 37,000 acres of school trust lands that are intermingled with the federal lands now off the auction block.

"Basically it neuters their value," because most companies won't do field development if they can't start out with a large enough land base, he said.

Carter said he's spent days on Capitol Hill since the start of the legislative session and watched agency officials agonize over how to make cuts to already strapped budgets.

"Then, with one stroke of a pen, Secretary Salazar took$3.5 million from Utah," which Carter said is the state's share of the bids. Carter said millions more in future revenue stands to be lost because the land — and the price tags — are like they don't exist at this point.

The protest came, ironically, on the same day the BLM of Utah posted its proposed list of parcels available March 24 in the quarterly mandated oil and gas lease sale. The list identifies 109 parcels totaling close to 160,000 acres.

With the here-you-have-it-here-you-don't approach industry officials said the government took last time around, there's skepticism over the next auction.

"It will be interesting to see what happens with that," said Kathleen Sgamma, Independent Petroleum Association of Mountain States spokeswoman.

The association, which represents more than 400 companies involved in the exploration of gas and oil inthe Intermountain West, criticized Salazar earlier this week and questioned pulling the parcels given economic conditions.

"The gas and oil industry is extremely important to Utah's economy," she said. "In the Uintah Basin alone, oil and gas accounts for 60 percent of the wages, and that is according to the University of Utah."

Don Colton, president of Utah-based Pioneer Oil and Gas, said interest from would-be parcel purchasers was already waning and was evidenced at December's BLM auction.

"It was not a very good sale," he said. "You're seeing less and less interest."

Colton was prepared in December to bid on some parcels along the I-15 corridor in central Utah, but the BLM pulled them at the last minute. That still mystifies him, and he can understand the frustration of company officials who followed the rules of the process, put in their bids and paid their money, thought they had acquired the land — only to find out they don't have it after all.

"It gets quite frustrating," he said. "There needs to be a clear mandate … if you knew it was going to be off limits you wouldn't even go in there. If you are going to allow it, allow it. If you're not, don't."

Colton has been in the exploration of oil and gas business since 1981 and said over time, the regulations have made it tougher and tougher for companies to do business in the Rocky Mountain area.

"There's been more red tape, more requirements, and while there is a point that you have patience, there is also the point where you just walk away."

By the time a company gets to the point where it wants to bid on a parcel of land, Colton said about 20 percent of the overall project's cost is tied up in preliminary work such as geology, seismic and aerial gravity and magnetic surveys.

If the company loses the bid — or in this case has the bid rescinded — those are costs that are never recouped.

And after the land is acquired, Colton said, there are additional permitting processes companies have to go through, all of which can be subject to protests and court action that delay the ability to drill for years.

"We're up against a group (environmental protesters) that really doesn't want you to do anything and there is no compromise. … They would have never built the interstate freeway system if they had to go through this."

Contributing: David Servatius

E-mail: amyjoi@desnews.com

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