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Dale Wetzel, Associated Press
North Dakota Gov. Jack Dalrymple listens on Friday, Feb. 3, 2012, during a meeting of the North Dakota Board of University and School Lands in the North Dakota Capitol in Bismarck, N.D., about whether the board should delay leasing oil drilling rights on some state lands that have been deemed environmentally sensitive. Board members agreed to delay auctioning drilling rights on about 3,800 acres of property until the board can agree on a policy for reviewing environmentally valuable lands before they are included in a lease auction of state lands.

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.

North Dakota's Game and Fish Department and the North Dakota chapter of the Wildlife Society had asked that 5,344 acres of land in four counties be dropped from the sale. State Sen. Connie Triplett, D-Grand Forks, asked board members in a letter Wednesday to cancel the sale entirely.

The land board agreed Friday to remove 29 tracts, covering 3,819 acres. That total includes a dozen tracts, covering 1,760 acres, in Billings and Golden Valley counties that the board removed from the sale last month.

Terry Steinwand, director of the state Game and Fish Department, said the property provides habitat for wildlife, including bighorn sheep, sage grouse, pronghorn antelope and mule deer.

Mike McEnroe, a spokesman for the Wildlife Society, said some of the land was in roadless areas that could be eligible for a federal wilderness designation, which would make it off limits to development.

The land board did not act on a Wildlife Society request to also exclude 665 acres of land in Mountrail County, the state's leading oil producer.

Gaebe said the remaining 860 acres that the two organizations had asked to withhold from the sale have already been leased and were not to be part of the auction.

Steinwand said he was pleased by how the matter was handled, and future lease sales would be more closely reviewed beforehand to spot environmentally sensitive land.

"It'll be a collaborative effort, like they all need to be, getting together with the land department, oil and gas, and whoever else is necessary to determine what is the best thing to do," Steinwand said.