Feds holding back $100 million in drill leases

SALT LAKE CITY — Brian Wixom's company has paid the U.S. government hundreds of thousands of dollars for leases to drill for oil and gas on federal lands over the years, only to never put a rig in the ground.

The money simply sits in a federal bank account as Wixom and other drillers wait for an agonizing bureaucratic process to run its course.

As it turns out, the federal government is holding a boatload of money for leases it auctioned and sold but hasn't issued, holding them back for bureaucratic review because of environmental protests and lawsuits. The backlog grew exponentially under the administration of President George W. Bush as it pushed for more domestic drilling.

The Associated Press has calculated that the government is sitting on close to $100 million that was paid for millions of acres of energy leases in the Rocky Mountains that have been withheld for as long as seven years, according to records and interviews with BLM officials in Utah, Colorado and Wyoming.

Drillers are steamed by the process. They don't understand why the federal government is sitting on such an enormous sum of money, especially at a time when politicians Washington are so focused on spending stimulus money to revive the economy.

"It's just crazy that the government because of bureaucratic delays is sitting on that kind of money," said Kathleen Sgamma, government affairs director for the Denver-based Independent Petroleum Association of Mountain States. "Talk about an economic stimulus."

Secretary of the Interior Ken Salazar got an earful from oilmen on the issue during a "listening tour" stop in Salt Lake City in May. Then only a few months on the job, Salazar vowed to find out more about the process.

"We think the government should issue the leases we purchased or give the money back," Wixom told Salazar.

Officials acknowledge the leasing delays have grown worse, but say their hands are tied by legal wrangling that allows anyone to challenge a lease on public lands. Environmentalists seized on this option during the Bush years as the administration rushed to drill more, making the delays even longer.

"It's gotten very complex," said Kent Hoffman, deputy Utah director of lands and minerals for the Bureau of Land Management, the federal agency in charge of energy development on public lands. "We have to answer the protests in a very legal fashion, knowing the next step could be the Interior Board of Land Appeals or federal court."