How did BLM make the decision to offer lands for lease near rivers?

In some oil and gas lease sales BLM offers lands for oil and gas leasing near riverways, including those being considered for Wild and Scenic River reccomendation in planning. These special places are floated by Utahns and visitors from throughout the world, but many of them also have potential for oil and gas reserves that could help meet our Nation’s energy demands. BLM acknowledges these are special places, and is committed to protecting what makes these places special.

In most cases, BLM offers lands for oil and gas leasing with set backs from the river. These set backs vary based upon the topgraphy of specific areas. For portions of rivers with high recreational use, BLM is committed to preventing development on public land from being seen from the river way and audible to river runners after the wells are in place. In addition, BLM will use mitigation measures in this area to ensure that it does not impair the scenery and solitude as one floats the river way. Leasing lands will not guarantee development. Companies will still have to apply for exploration and drilling permits, at which point BLM may manage the area in a way that protects visitors experience on the river way. Many of these areas have been leased in the past, and the leases have expired without development.

How does BLM make decisions to offer for leases on BLM-managed lands near National Parks?

Other locations that we have taken special care in our decisions to lease have been with parcels on BLM managed lands near National Parks. BLM works with the National Park Service during land use planning to obtain input and coordinate regarding leasing of lands adjacent to or near National Park units. Additionally, we coordinate with appropriate Park Service units for each lease sale and provide descriptions of parcels under consideration, consistent with land use planning decisions.  BLM may defer the offering of parcels if they are within key viewsheds of highly visited park locations. If development is proposed on a lease after it is issued, BLM works additionally with the Park Service to mitigate impacts, once a site-specific proposal is received.

 

How much BLM land in the state is currently under lease?

Approximately 4.3 million acres.

Historically, what has been the trend in leasing on BLM lands in Utah?

In the mid 1980’s prior to changes in leasing regulations, approximately 16 million acres of BLM lands in the state were under lease. Over the past decade, the number of acres leased has varied between 4.5 and 3.2 million acres, a historic low. Rising demand and energy prices over the past several years has resulted in increased demand. In 2003, 3.8 million acres were reported; current estimates show 4.3 million acres under lease.

What has caused this cyclic rise and fall?

Market forces driven by the rise and fall of energy prices

How do Public Lands contribute to local and national energy needs?

Lands managed by the Department of the Interior produce one-third of all domestic coal, oil and natural gas. In addition, renewable energy infrastructure on public lands administered by BLM is also one of the main sources of renewable energy, including two geothermal plants in Southwestern Utah.

Demand for natural gas is expected to increase 50 percent over the next 20 years and oil consumption expected to increase 30 percent. Since 1970, the size of the average house has increased 55 percent while the size of the American family decreased 13 percent.

More than half of U.S. households use natural gas (55 percent). It is the primary fuel used for heating in our nation. In addition, this clean-burning fuel is being used more and more for electrical generation. Since pipeline infrastructure is the primary means for transportation of natural gas, almost of all the nation’s natural gas must be produced domestically.

A study conducted under the Energy Policy and Conservation Act of 2000 found that Federal Lands in the Western United States contain nearly 140 trillion cubic feet of natural gas – enough to heat more than 55 million homes for nearly 30 years. The study also estimated that Federal Lands contain about 68 percent of all undiscovered U.S. oil resources and 74 percent of undiscovered natural gas resources.

In 2005, Utah produced 303.6 billion cubic feet of natural gas—enough to heat approximately four million homes for one year. Utah consumes approximately half of its natural gas, making it a net exporter to other states in the region.

Why is Oil and Gas Leasing Important to Utah’s Economy?

If development occurs on Public Lands in Utah, the State receives additional royalties and local communities benefit from jobs and increased spending. Much of this funding is shared with local counties for transportation, schools and other social programs. According to a report by the Utah Energy Office, the drilling of a typical well in the Uintah Basin adds approximately 15 jobs and $360,000 in additional personal income. These jobs would be in the mineral and construction sectors, as well as indirect services such as retail. If these jobs were sustained by future development, it could have significant long-term economic impacts.

Revenues from leasing are shared equally between the federal government and the State of Utah. Since the passage for the Mineral Leasing Act in 1920, the State of Utah has received $962,468,000 from mineral revenues on federally managed public lands.

In 2005, Utah produced 15.7 million barrels of crude oil and 303.6 billion cubic feet of natural gas. However, despite recent increases, Utah’s crude oil production meets less than one-third of in-state demand, causing Utah to depend on other states and countries. Production has increased to meet the demands of this region as population has increased. Drilling in the state has also increased—from 378 wells drilled in 2002 to nearly 700 wells drilled in 2005.

Exploration and discovery of new reserves is imperative to meet rising demand while production from existing wells declines. Leasing is the first step to discovering these new reserves. Prior to drilling, industry typically conducts studies like geophysical testing to determine if mineral extraction is economically viable. Understandably, before conducting such costly studies, companies want a reasonable assurance that they will have rights and access to the resources if their research shows potential. Leasing provides this assurance, but at the same time it allows BLM the ability to implement a myriad of laws, regulations, and policies that protect other resources if oil and gas development occurs.

Why is there an increase in leasing in Utah, particularly in the central portion of the state?

Due to recent discoveries in the central portion of the state, interest in BLM oil and gas lease sales has increased. BLM has sold and issued nearly one million acres of oil and gas leases in its central Utah field offices since the 2004 discovery.

Interest in leasing is reflected in the amount of land nominated for lease sales over the past few years. What was typically nominated in a year-long period several years ago is now nominated for a single quarterly lease sale. Lease sales prior to 2004 seldom resulted in more than 100 parcels, but since then, upwards of 300 parcels have been offered in a single sale. Utah BLM has held four record breaking sales in the last three years. Since 2002, the average bid per acre for a lease has grown from $10.25 to $113.70

What is Utah's annual oil and gas production?

Utah's current oil and gas production statistics can be found at the web site for the Utah Division of Oil Gas and Mining (UDOGM). For this information, see the links below: