March 1, 2019 / 9:50 PM / in 3 months

U.S. holds major oil and gas lease sale in sage grouse habitat

(Reuters) - The U.S. government kicked off a major sale of oil and gas leases in Wyoming this week after rejecting protests over lands on offer that are considered critical areas for wildlife.

A sage grouse in a photo courtesy of the U.S. Bureau of Land Management. REUTERS/Bob Wick/BLM

The Bureau of Land Management is offering 565 parcels of land, representing more than 750,000 acres, for leasing via an online auction taking place all week.

By acreage offered, it is the Trump administration’s largest lease sale so far in a single state outside of Alaska, according to BLM sale notices and summaries.

Wyoming is the top U.S. state for gas production and the second-biggest for oil production on federal lands, according to the U.S. Energy Information Administration.

As of mid-day Thursday, sale results were mixed, with dozens of parcels garnering no bids, some selling for thousands of dollars an acre, and most falling somewhere in between.

The 565 parcels had originally been intended for a lease sale late last year, but a federal judge’s order in September required BLM to provide additional public comment and a 30-day protest period for parcels in greater sage-grouse habitats. All 565 parcels are located in sage grouse habitat.

Sage grouse, a threatened Western ground-dwelling bird, are considered by conservationists to be a key indicator for America’s dwindling sagebrush ecosystem.

The Trump administration has proposed easing Obama-era protections for the fowl, part of its “energy dominance” agenda to loosen environmental regulations and open up more federal land and waters to energy exploration.

The BLM received four protests to the sale from conservation groups and a wilderness school. Green groups argued the BLM was not prioritizing leasing outside of sage grouse habitats as required by current rules, and said officials had not evaluated the impacts to mule deer since dozens of parcels overlap with big game migration corridors and winter range.

Officials responded by pointing to a 2017 memorandum from BLM’s assistant director for energy, minerals and realty management in Washington that said “BLM does not need to lease and develop outside of (sage grouse) habitat management areas before considering any leasing and development within (sage grouse) habitat.”

Asked why it had proceeded with the sale despite the objections of environmental groups over sage grouse habitat, BLM’s Wyoming office said in a statement that it was in compliance with the federal judge’s order and would not comment on litigation.

With respect to big game herds, a BLM document said impacts are not expected to go beyond those reflected in prior regional land use plans.

“This sale is one of the most egregious examples of how far a policy of putting oil and gas first can take the Bureau of Land Management from its mission, putting so much important habitat at risk that both the BLM and the State of Wyoming have recognized and committed to protect,” an attorney for The Wilderness Society, a conservation group that protested the sale, said in an email.

Despite the size of the sale, BLM does not expect all of the leases to be developed. Less than 50 percent of all leases issued are explored, according to the BLM’s Decision Record for the sale.

“This lease sale is expected to be consistent,” it said.

Wyoming lease sales generated nearly $117 million in 2018, according to BLM. Revenues from lease sales are split between states and the federal government.

Crude oil production in Wyoming has been on the rise in the last two years as oil prices have recovered somewhat after their slump.

Asked why it was offering so much acreage, BLM said parcels of land had been nominated by individuals and industry players.

“The BLM is charged, by regulation, with reviewing every nominated parcel, determining whether it is appropriate for leasing under our existing policy and land use plans, and finally, offering qualified parcels in quarterly oil and gas lease sales,” BLM Wyoming spokeswoman Kristen Lenhardt said in an email.

Reporting by Nichola Groom; Editing by Chizu Nomiyama

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