March 20, 2018 / 11:07 AM / 8 months ago

Drillers snap up federal leases near Utah's wilderness monuments

WASHINGTON (Reuters) - The U.S. Bureau of Land Management on Tuesday auctioned off more than 51,000 acres (21,000 hectares) in southeastern Utah for oil and gas development, a sign of strong industry demand in a region conservationists have vowed to protect.

FILE PHOTO: The view from Comb Ridge is pictured in Utah’s Bears Ears area of the Four Corners Region, Utah, U.S. December 18, 2016. REUTERS/Annie Knox/File Photo

The Utah lease sale included terrain near the former boundaries of the Bears Ears National Monument, whose size was scaled back by the Trump administration last year, as well as the Hovenweep and Canyons of the Ancients monuments, according to the bureau.

Results of the online auction, posted on Tuesday afternoon, showed that all 43 parcels up for sale received winning bids, which averaged $28.68 per acre and ranged between $2 and $93 per acre. Total proceeds from the auction were $1.56 million, according to the BLM.

“This means drilling in these parcels poses a more serious and immediate threat to the landscape and archaeological resources,” Aaron Weiss, media director for the Center for Western Priorities, said about the apparent strong demand.

The Monticello area received some of the highest bids, with Context Energy LLC bidding $145,600 for a 1,600-acre parcel, according to the BLM. Other bidders included Ayers Energy LLC, Wasatch Energy LLC and Kirkwood Oil and Gas Inc, according to the data.

The auction comes as the administration of President Donald Trump seeks to boost domestic energy production by expanding federal leasing and rolling back land protections.

Local officials have been eager to open up the areas, administered by the BLM, saying resource extraction is one of few economic opportunities for rural San Juan county, one of Utah’s poorest areas.

“Oil and gas operations are an important contributor to a diversified county economy and the county supports leasing as a necessary step toward realizing economic benefits,” county planner Nick Sanberg said in comments to the BLM.

But conservation groups fumed, threatening lawsuits.

“We won’t sit idly by while President Trump and Interior Secretary (Ryan) Zinke auction off America’s cultural and public lands heritage to the oil and gas industry,” said Stephen Bloch, legal director with the Southern Utah Wilderness Alliance. The alliance argued that the BLM did not adequately study potential impacts on wilderness and cultural sites.

Southeastern Utah’s dramatic landscapes are rich in Native American artifacts, historical sites and dinosaur fossils.

A 360 acre-parcel near Bears Ears received a winning bid of $28 per acre, while 13 parcels near the nearby Hovenweep monument sold at an average of $29 per acre. A bid of $7 per acre won a 965-acre parcel next to Canyons of the Ancients National Monument.

The results were more competitive than those of a lease sale last week in which a 200-acre parcel near the Upper Missouri River Breaks National Monument sold for the minimum $2 per acre.

Zinke this month deferred or scaled back two other lease sales near archaeological and tourist sites in New Mexico and his home state of Montana amid local outcry and opposition from state lawmakers. 

The BLM was not immediately available for comment but said it would post results of the sale, including names of winning bidders, by Wednesday morning.

Other recent lease sales have yielded relatively low bids, a reflection of soft demand for federal property as the oil and gas industry taps vast reserves on private lands.

Reporting by Valerie Volcovici; editing by Richard Valdmanis, David Gregorio and Leslie Adler

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