US Dept. of Interior
Teleconference about Restoring Balance in Controversial
Last-Minute Oil and Gas Lease Sale near Utah National Parks
February 4, 2009
1:30 pm CT
Moderator: Frank Quimby
Coordinator: Welcome and thank you for standing by. All participants are in a listen only until the question and answer session of today's conference. I'd like to inform all parties that the call is being recorded. If there are any objections to disconnect.
I'd like to turn the call over to your host today. Mr. Frank Quimby, you may begin.
Frank Quimby: Good afternoon. Welcome to Secretary of the Interior Ken Salazar's New Media teleconference. The Secretary will make an important announcement this afternoon. Following that we will open the teleconference to a question and answer session.
With that I'd like to introduce Secretary of the Interior Ken Salazar.
Ken Salazar: Thank you joining me on today's call. In it's last week in office the Bush administration rushed ahead to sell oil and gas leases at the doorstep of some of our nation's icons, some of our nation's most treasured landscapes and did so particularly in Utah.
In the December 19, 2008 lease sale they offered 130 parcels for oil and gas development, 77 parcels of which are close in proximity to Arches' and Candyland's National Parks, Dinosaur National Monument and Nine Mile Canyon. The 77 parcels in total contain about 130,000 acres.
President Obama and I believe strongly that we need to responsibly develop our oil and gas supplies to help reduce our dependence on foreign oil but we must do so in a thoughtful and balanced way. We need to make sure that we protect our signature landscapes and cultural resources for future generations.
The 77 parcels that the Bush administration offered on the doorstep of our national treasures in Utah raised some very important questions. Among those questions, we need to recognize that the environmental review process that was followed was from our point of view not complete.
I have concerns about the degree of consultation and the time of that consultation with the National Park Service. And there are other important factors that should have been considered in that review including the factors of air quality and the impact of development on air quality in the vicinity of the parks.
These are real issues and the United States District Court has agreed that these are real issues. On January 17 of this year the District Court drafted a motion for a temporary restraining order on these leases. Because of the need to review these parcels and because of their proximity to landscapes of national significance, I have directed the Bureau of Land Management not to accept the bids on the 77 parcels.
We will take time and take a fresh look at these 77 parcels and determine whether they are appropriate for oil and gas development. The step I am taking today is in compliance with existing processes and authorities of the Secretary of the Interior.
Under the BLM lease sale process companies bid on parcels and the BLM then reviews the bids to decide whether to accept them or not to accept them. A Government contract is not completed until the BLM formally accepts the bid, which in this case it has not done for these 77 parcels.
It will take time to restore balance to our development of our conventional resources and to restore the type of thoughtful approach that we should have. But this is an important first step in making sure that we have the right balance between development of our resources and protection of our environment.
With that I would be happy to open up for questions.
Coordinator: If there are any questions, press star 1 and record your name. Once again, any questions, press star 1.
Your first question comes from Jeff Young. Your line's open. Please state your affiliation.
Jeff Young: Hi Secretary. It's Jeff Young with the public radio program Living On Earth. Can you hear me okay?
Ken Salazar: Yes I can hear you well.
Jeff Young: I'm wondering if you've given any thought to what you want to do now with offshore oil resources and what kind of changes or plans are afoot there.
Ken Salazar: We are looking at the offshore issue, which is very much on the table because of the fact that the five-year plan was reopened up. As President Obama has said, we believe that the OCS is a place where there might be appropriate locations for exploration and for development. And at this point we simply are in the process of reviewing what kinds of changes ought to be made.
Jeff Young: But no decisions as yet.
Ken Salazar: What was that?
Jeff Young: No decisions as yet?
Ken Salazar: No decisions.
Jeff Young: Thank you.
Coordinator: Next question comes from Steve Davies. Please state your affiliation.
Steve Davies: I'm with Endangered Species and Wetlands Report. Secretary Salazar just wanted to clarify two very quick questions. Will your direction to BLM - does that have immediate effect and also what is the effect on the proceedings regarding Tim DeChristopher?
Ken Salazar: First the effect will be immediate.
Steve Davies: Yeah.
Ken Salazar: This is a directive to the BLM therefore the lease process will not go forward with respect to the 77 parcels.
Secondly with respect to the DeChristopher, which you raised, the United States Attorney has the matter. The United States Attorney is reviewing it and beyond that I am not going to provide any other comments with respect to the DeChristopher matter.
Steve Davies: Thank you sir.
Coordinator: Tina Sealy your line is open. Please state your affiliation.
Tina Sealy: Hi. Tina Sealy with Bloomberg News. I just wanted to first of all verify that these 77 leases are the ones that were never actually offered in the December 19 lease sale. Is that correct?
Ken Salazar: Now these 77 parcels were indeed offered in that lease sale. There were other parcels that were also offered but which were not in the place of an area of these sensitivities.
Tina Sealy: Okay. Maybe I'm misunderstanding. I was under the impression that the court agreement that was in place prevented these leases from being part of that December 19 sale. Is that not the case?
Ken Salazar: No, that's not the case.
Tina Sealy: Okay. Can you give us a figure then for how much as bid on these parcels and how much potential revenues the Government is going to forego by canceling them?
Ken Salazar: The bids that were offered on these 77 parcels were approximately $6 million.
Tina Sealy: Thank you.
Coordinator: (Kristen Parker) you line's open. Please state your affiliation.
(Kristen Parker): Yes Secretary. I guess I have two questions now. The 77 parcels - earlier when you first spoke you gave the list of national parks (net). Is that where these are all close to, these parcels?
Ken Salazar: Yes. They are the ones that are in the closest proximity to Arches' and Candyland's National Parks, Dinosaur National Monument and Nine Mile Canyon.
(Kristen Parker): Are producers begin notified of this?
Ken Salazar: Yes.
(Kristen Parker): Will they receive their money back right now or what? Will the Government hold onto their - the money, you know, their bid money?
Ken Salazar: The money will be returned.
(Kristen Parker): Oh really? All six million?
Ken Salazar: Yes.
(Kristen Parker): When will the money be returned?
Ken Salazar: It'll go through the normal processes of refunding the money when - in a situation such as this. The BLM will not accept the bid for the leases so the money will be returned under the normal processes of the BLM.
(Kristen Parker): So in effect, by your action today that lease sale never occurred or a part of it never occurred.
Ken Salazar: Sorry, I didn't hear your question.
(Kristen Parker): So in effect, by your action today that lease sale never occurred or a least part of it did not occur.
Ken Salazar: What is meant by my action today is that with respect to these 77 parcels we are not accepting the bids with respect to these 77 parcels. It doesn't mean that there won't be at some point in time additional leases with respect to these 77 parcels. We want to make sure that the process including the National Park consultation and other environment reviews are complete.
And it may be that out of these 130,000 acres there is a portion of it or maybe a very large part of it that actually ends up being subjected to a new lease sale. But with respect to the action today, what essentially I have done is to have removed the 77 parcels from the consummation of a lease.
(Kristen Parker): Can we ask how many bids, you know, how many parcels - the bids on parcels will you - will still stay. I mean say 77 are off the table. How many still remain on the table and their bids?
Ken Salazar: There were 116 parcels overall...
(Kristen Parker): Okay.
Ken Salazar: ...with respect to the lease sale.
(Kristen Parker): Okay.
Ken Salazar: We have therefore allowed a number of those leased parcels to move forward and those bids will be accepted and those leases will be consummated. So what we are taking off the table are 77 out of the 116 leased parcels.
(Kristen Parker): Do you have any idea of how many of the bids you will hold on to? What is the dollar amount?
Ken Salazar: I'm sorry. I couldn't hear your question.
(Kristen Parker): You know, in a dollar amount, how much of the bids will the Government still hold onto? You're giving up $6 million back to the producers. How many - how much in dollar terms will you hold onto?
Ken Salazar: You know, I could do the math but let me get the - let me get the specific number back to you. There will be - there will be money that will come into the BLM and the Federal Government through the - I guess that would be 16, 25, 30 - be, you know, some 40 lease parcels that were - for a fact there will be an oil and gas lease that will be signed by the BLM. And that money will come in to the Federal Government. We'll get back to you on the specific number.
(Kristen Parker): Thank you sir.
Coordinator: Juliet Eilperin your line's open. State your affiliation.
Juliet Eilperin: Hi there. Juliet from the Washington Post. Mr. Secretary can you talk about - obviously this is one of the most high profile leftover cases concerning energy extraction on public land that was pending from the Bush administration. And then there's obviously offshore leasing. Are there any other decisions that you can identify at this time that you're - that you're weighing that you might possibly revisit?
Ken Salazar: Juliet there were a number of decisions that were made by the Bush administration in the last several months of its existence. In my view many of those decisions are being rushed without going through the proper environmental review and without making sure that there was the sound science that supported those decisions.
We are looking at many of those matters and they're on the table. This is only one among a dozen or so of those matters that we're looking at.
Juliet Eilperin: Right. I was just wondering. I know that, you know, they range from a number of things including endangered species and so forth and I was wondering if there's specific drilling ones that you might identify.
Ken Salazar: We will be having additional announcements in the days and weeks ahead as we complete our review of other items.
Julie Eilperin: Okay. Thanks.
Coordinator: (David Fry). Your line's open. State your affiliation.
(David Fry): NewWest.net. Hi Secretary. I guess following up on that, one of those was oil shale and I'm curious if you see yourself reexamining the oil shale regulations that were pushed through at the last minute.
Ken Salazar: (David) we have a number of reviews under way with respect to the oil shale program but we have not yet reached any decision and are examining a number of different options.
(David Fry): And on the - you recently came to Colorado speaking about the ethics concerns at the MMS. Can you talk about if you see further cases coming out of that?
Ken Salazar: I announced in Lakewood on Thursday that we were moving forward with a number of actions concerning MMS, those actions including a re-referral to the Department of Justice with a review as to the propriety of the prior disposition of the criminal cases.
The issuance of the new code of conduct with respect to MMS employees, a review of the personnel actions that were taken in connection with that sex and drug and alcohol scandal that occurred there on Government property. And those actions are moving forward.
Tom Strickland, the former United States Attorney from Colorado is in charge of that review. We also are looking at a number of ethics issues within the department and as we deal with those issues, we will be providing you more information.
(David Fry): Now if I could just ask one more question on sort of a broader philosophical level, could you talk about how you see your philosophy as Head of Interior differing from those of your predecessors under the Bush administration?
Ken Salazar: My approach in this matter and the way I approached natural resources development in our - in Colorado in the past and as I have approached it in our country in the past and that is that there has to be a balance. We know that we depend on the resources that we extract from our lands for a great part of our energy portfolio for this nation.
We provide about a third of our oil and gas, natural gas energy from our public lands and that powers America's economy. We prove about 50% of the coal that is used in America. My view is that we will continue to use those resources as part of our energy portfolio as we open up avenues to the new energy frontier that we are creating and will create in the years ahead.
But as we move forward the conventional resources that we have used oil, gas and coal will continue to be part of that portfolio. I would say the difference between my approach and President Obama's approach on the one hand and on the other hand President Bush's and Vice President Cheney's and my predecessors approach to these issues is that we believe there ought to be a balance.
That we can find ways in which development can move forward but at the same time as development moves forward that we will make sure that we're providing appropriate protections and mitigation so that the treasured landscapes and wildlife habitat and (river) corridors and the streams and water quality are protected.
So we'll find - we'll find a balance that these resources that we're dealing with which the Department of Interior has responsibility over on behalf of the American people we will continue to develop those resources but we'll do it in a way that balances that development with the needed protection.
(David Fry): Thank you.
Coordinator: Howard Berkis your line's open. State your affiliation.
Howard Berkis: Yes. And this is Howard Berkis from National Public Radio. Mr. Secretary, two questions for you. One, what is your thinking about whether the Justice Department should prosecute Tim DeChristopher?
Ken Salazar: Hoard as I said earlier the U.S. Attorney has the matter and is reviewing it. Beyond that I am not at liberty to comment.
Howard Berkis: You don't have an opinion or you don't want to state an opinion about whether he should be prosecuted?
Ken Salazar: I have stated what I'm going to say on the DeChristopher matter.
Howard Berkis: One other question. Do you anticipate any changes in the Utah BLM office given the way that the lease sale was handled?
Ken Salazar: I don't have any comment on that matter either.
Howard Berkis: Thank you.
Coordinator: (Eric Bontricker) your line's open. State your affiliation.
(Eric Bontricker): Hello Mr. Secretary. This is (Eric Bontricker) with Greenwire. I had a quick question about the - you said you wanted to reexamine the science that was used in these plans.
Now the resource management - these are three resource management plans that allowed for these leases; Vernal, Price and Moab; three out of six plans altogether that the BLM had been working on for the majority of the Bush administration for these lands in eastern Utah.
My question is if you're going to be examining the science in these three plans and these leases, are you also going to be reexamining the resource management plans for the other three areas or any other BLM areas? In other words, is this going to be part of a larger review?
Ken Salazar: No, (Eric) at this point in time we are looking at many of the Bush administration decisions and some of them are probably going to be good decisions that we'll be fully supportive of. There are others, which we will disagree with.
But we are at this particular point in time is we have identified these 77 parcels as being of significant concern to us as I said in my comments at the beginning of this press conference. I don't necessary believe that all of these 77 parcels won't go into oil and gas exploration and development at some point in time in the future.
But I do believe that when we think about the proximity of the Arches National Park, the Candyland's National Park, Dinosaur National Monument and Nine Mile Canyon that those are American iconic treasures that we need to make sure are being protected.
And so we have identified this area as one of those high priority areas that we were able to take a hard look at and make a decision. Now with respect to other matters that involve resource management plans, we'll take those as we are - as we get our feet on the ground and look at each one of them with more specificity.
(Eric Bontricker): All right. Thank you.
Coordinator: (Unintelligible) your line's open. State your affiliation.
Frank Quimby: (Joyce), can we take one more question?
Coordinator: Sure (unintelligible) your line is open.
Man: Okay. Thank you. Secretary Salazar, just to clarify and question first of all, you mentioned that the acreage of - involving this 77 parcels was about 130,000. How many acres were offered in the December 19 lease sale in total?
Ken Salazar: There were - the total of the 130 parcels I think was about 150,000 acres.
Man: Hundred fifty thousand. Okay. Very good. Over the last two or three months given the attention that has been focused on this lease sale, industry has complained that some pronouncements from members of the Obama transition and then the Obama administration as well as the lawsuit by the environmental groups had the affect of depressing prices at the lease sale.
If you go through environmental analysis and then - and some renewed (EISes), these leases and then they are offered again for sale, can BLM anticipate perhaps getting a higher price this time around?
Ken Salazar: You know, I think it's - the answer to that is all - it's speculative because you really don't know what the price of oil and gas will be at the time. The fact of the matter is that, you know, oil is - oil and gas are much cheaper now than they were three or four months ago.
And what is ultimately offered for these lease parcels really is dependent on what is happening in the market and what oil companies look at the future in terms of the - of oil pricing.
Man: Okay.
Ken Salazar: But it think it'll largely depend on the market forces that are at play at the point in time when a subset of these 77 parcels are put back on the table for lease sale.
Man: Very good. And a final question. As the 12 or so situations that you're department is reviewing, would the Yellowstone snowmobiles order be among them?
Ken Salazar: You know, I'm not going to comment yet on all the other things that we are taking a look at. You know, we - I have been charged by President Obama to clean up the Department of the Interior. We have some wonderful employees out of the 67,000 employees who are here, you know, 99.9% of them are great people and they do a great job.
But the policy positions of the department over the last eight years have really been driven out of the White House and we are looking at many of the decisions that were made. And my charge from President Obama in the Department of the Interior is to move forward to bring about the change that is required and to implement a reform agenda.
And we will do that together as a team working closely with the President and working closely with the members of Congress and at the end of the day working to do our very best on behalf of the American people.
Man: Thank you very much.
Frank Quimby: Thank you very much Mr. Secretary. (Joyce) that concludes our teleconference.
Coordinator: Okay. Thank you for your participation. Everyone may disconnect at this time.