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Most federal oil and leases in Utah go unsold

Published August 19, 2014 1:39 pm

Operators nominate land for drilling, but don't always show up at auction.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

A federal oil and gas lease auction was a bit of a bust Tuesday: Only two parcels fetched the minimum bid.

The Bureau of Land Management tried to auction 22 parcels totaling 39,000 acres in Tooele and Juab counties. But with a $2-an-acre minimum bid, only seven bidders were present. Two paid $33,000 for two parcels covering 2,063 acres — 5 percent of the total offered.

The sold leases are around Hop Creek, seven miles east of Nephi in the morning shadows of Mount Nebo. LT Land Group LLC of Salt Lake City bid $25-an-acre for one. International Petroleum bid $9-per-acre for the other.

Interest was not as low as the last time the BLM offered leases in its West Desert district. That August 2013 sale attracted no bids on any of 35 parcels in Tooele County.

The feds, meanwhile, have proposed leasing 69 parcels covering 72,236 acres, mostly in energy-rich Uintah and Carbon counties, at its next quarterly lease sale Nov. 18. Likely to generate more interest than any other this year, this sale involves leases in the Uinta Basin and around Helper and East Carbon.

The oil and gas industry is unhappy the BLM is not offering more acreage at this sale. Fewer than half the parcels nominated by the industry in Uintah, Duchesne, Emery and Carbon counties made the sale list, the Western Energy Alliance complained.

For example, of 60 parcels managed by the Price field office, the BLM withheld all or part of 17 due to conflicts with coal resources. All or part of another 34 because they overlap with sage grouse habitat.

"Our members continue to be harmed by these indeterminate delays and deferrals," the energy trade group wrote in comments for the sale's environmental assessment.

Environmentalists object that some parcels being sold Nov. 18 have possible impacts on riparian areas, cultural resources and sensitive species.

They also chide industry for nominating so many parcels that are poor candidates for development, citing the failure of many parcels to get the $2-an-acre minimum bid.





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