The Utah School and Institutional Trust Lands Administration plans to auction land for oil and gas development in April, and where that land is located and where the agency owns other land that could be leased or sold makes environmentalists and conservationists cringe.
A dozen SITLA parcels slated for auction in April comprise 7,000 acres in five counties and are located, as SITLA puts it, "within an existing Bureau of Land Management Wilderness Reinventory Area" or within a BLM wilderness study area. A reinventory area means the land is a candidate for federal protection under a wilderness-study designation.
Despite the wilderness-study designations for lands that surround a SITLA lease parcel, an oil and gas operator can legally still drill on it.
The parcels were left over from SITLA's most recent lease sale last October. Nineteen parcels were posted as available through SITLA's so-called over-the-counter leasing (noncompetitive bidding) until Jan. 22. Parcels are nominated for leasing by the public, including oil and gas operators.
The January sale, in which sealed bids are made, is now planned for April because SITLA hopes higher prices will yield more money for the Utah public schools that share portions of the sale revenues with other state agencies. If oil and gas prices don't rebound by April, the sale could be postponed again, said LaVonne Garrison, SITLA's assistant director for oil and gas.
Stephen Bloch, an attorney for the Southern Utah Wilderness Alliance, said this week that his group would fight any development of those lands that are surrounded by wilderness study areas.
"As far as the oil and gas leasing in wilderness study areas, the lessees know, or should know, what they're getting into and that SUWA will strongly oppose any and all steps by lessees to access and drill on these leases," he said in an e-mail to the Deseret News.
Garrison wouldn't speculate on why the 12 parcels didn't sell. Sometimes parcels won't receive bids, she said, because they're surrounded by protected federal lands, making access to the SITLA parcels difficult or impossible.
SITLA attorney Tom Mitchell said that in Utah, "it's a rare piece of state or private acreage that isn't close to or in the middle of an area of federal concern." About 1 million SITLA acres are surrounded by or close to areas with special federal designations that provide protection for tracts of land and its wildlife.
But Garrison said that a SITLA parcel has a sort of regulatory bubble over it that exempts it from the rules and regulations imposed by a federal designation such as "wilderness study area" on lands surrounding the SITLA parcels.
"The BLM regulations apply to federal lands but not to private or trust lands," Garrison said.
The BLM last Friday held an oil- and gas-lease sale in which more than half of the parcels were pulled from the auction block. The BLM temporarily deferred thousands of acres from the sale because of complaints that the parcels were too close to sensitive scenic and wilderness areas in Utah's famed red-rock country.
Mitchell said SITLA discloses to potential lease-holders that a particular parcel of trust land may be close to federally protected public lands. SITLA land is sometimes included in an overlay of an area designated as wilderness, and Mitchell said oil and gas wells already are located in some of those areas.
The wilderness study areas surrounding a SITLA parcel "may make it more or less interesting to a potential lessee," Mitchell said. "It's certainly relevant. It has no bearing on our decision to offer them."
SITLA ran into problems in recent years when proposals to sell land near Tabby Mountain and the Little Hole fishing hotspot on the Green River prompted public outcry. SITLA decided not to sell the Tabby Mountain land and considered forming an advisory committee to help the agency make decisions about "sensitive" areas. The Utah Division of Wildlife Resources purchased the 356 acres near Little Hole for over $1.6 million, staving off fears the land would be developed into a resort. The committee, however, was never formed.
Mitchell said his agency has no "legal authority" to consider withholding parcels from its sales if state trust officials know the land is close to or abuts wilderness areas. Mitchell said SITLA is engaged in ongoing efforts to trade or sell land to the federal government if there is a problem with the parcels being too close to sensitive areas.
But SITLA's bread and butter is oil and gas, and its most recent lease sale last October generated more than $930,000 in revenues from leases targeting minerals. The agency now has about 2,700 oil and gas leases to get at minerals under trust land, with about 600 that have one or more wells on them, for about 1,500 wells on trust lands throughout the state.For the 2007 fiscal year, about 40 percent of SITLA's $155 million in revenues came from oil and gas activities on SITLA land. But with lower oil prices these days, SITLA's oil and gas revenues are expected to drop. The agency's oil- and gas-lease sales this year are planned for April, July and October.
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