Utah Counties Sue U.S. Over Cancelled Leases

Published August 1, 2009

Three Utah counties have teamed up with five petroleum companies to sue Interior Secretary Ken Salazar, alleging he unlawfully cancelled 77 leases to drill for oil and gas on federal land in the state.

Among other things, the suits allege Salazar exceeded his authority when, in February, he shelved 77 oil and gas leases that had been auctioned off by the Bureau of Land Management to the highest bidder in December 2008.

The plaintiffs maintain the federal Mineral Leasing Act requires the secretary to issue the leases after they have been duly auctioned off and paid for by the winning bidders.

Environmentalists Raised Obstacles

Environmental activist groups, led by the Southern Utah Wilderness Alliance, had previously challenged the auction, saying BLM failed to follow environmental law in approving the leases. In January, a federal district court issued a temporary injunction against the sale of the parcels, and the following month Salazar withdrew the leases pending a review of the transaction.

An Interior Department report released June 11 said BLM failed to provide the National Park Service with the customary opportunity to provide input on the lease auction. It also called for a comprehensive regional air quality strategy and a further review before deciding whether to reinstate the parcels.

The report added it may be appropriate to reinstate some of the parcels located near areas where drilling is already taking place, but it recommended other parcels be withdrawn from consideration.

Locals Support Production

Salazar’s action has angered state and local officials. Utah Sen. Robert Bennett (R) blocked the nomination of David Hayes to be Interior Department deputy secretary for two months over the cancelled leases, demanding a review and explanation of Salazar’s decision.

Mike Lee, former general counsel to Gov. Jon Huntsman Jr. (R) and attorney for the counties suing Salazar, emphasized the economic damage the decision would do to local communities.

“It’s not just money going to some fat cats,” Lee told the Salt Lake City Tribune for a May 15 article.

In addition to the loss of jobs in the drilling fields, Lee noted the counties will suffer lost royalty revenues that would have helped fund law enforcement, infrastructure improvements, and local schools.

Sign of Obama Hostility?

The auction took place in the final weeks of the Bush administration, and its cancellation is seen by some as a sign of the Obama administration’s fundamental hostility to fossil fuels.

“This is just one of the many anti-energy policies from the Obama administration. These leases were seven years in the making, and Secretary Salazar claims they were rushed,” said Dan Simmons, director of state affairs at the Washington-based Institute for Energy Research.

“The American people are demanding access to our vast energy resources, but so far the Obama administration has thwarted efforts to increase our domestic energy production,” said Simmons.

Bonner R. Cohen, Ph.D. ([email protected]) is a senior fellow at the National Center for Public Policy Research in Washington, DC.