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3 Utah Counties, Oil Companies Sue Interior

by Patty Henetz

Three petroleum companies and three Utah counties are suing the U.S. Interior Department, alleging that Secretary Ken Salazar broke the law in setting aside 77 disputed oil and gas lease parcels in the Beehive State.

The twin lawsuits, filed this week in U.S. District Court in Salt Lake City, argue that federal mining law required the Bureau of Land Management to proceed with issuing leases to winning bidders after a Dec. 19 auction at the BLM's Utah headquarters, which was disrupted by Tim DeChristopher (AFP/Getty Images/Chris Hondros) The twin lawsuits, filed this week in U.S. District Court in Salt Lake City, argue that federal mining law required the Bureau of Land Management to proceed with issuing leases to winning bidders after a Dec. 19 auction at the BLM's Utah headquarters.

The plaintiffs -- Uintah, Carbon and Duchesne counties and Impact Energy Resources of Colorado, Peak Royalty of Utah and Questar Exploration and Development of Texas -- claim the BLM had to issue the leases within 60 days of the auction.

But those claims could be rejected for lack of standing and the plaintiffs' inability to prove harm, a conservationist attorney said Thursday.

The Dec. 19 auction already was in federal court that day because the Southern Utah Wilderness Alliance and several other conservation groups had sued to stop it. Ultimately, the groups successfully argued the BLM didn't properly follow environmental law when setting up the sale of 77 parcels on 103,000 acres of public land near Arches and Canyonlands national parks, Dinosaur National Monument and Nine Mile Canyon.

Soon after it commenced, the auction fell into disarray when University of Utah student Tim DeChristopher won 14 bids with no intention of paying for them as a protest against Bush administration drilling policies. BLM Deputy Director Kent Hoffman afterward allowed any of the bidders to withdraw, if they wished, with no penalty.

On Jan. 17, a federal judge issued a temporary restraining order against the auction, finding fault with BLM's air-quality and historic-preservation analyses. The BLM subsequently returned the legitimate bidders' money.

On Feb. 4, shortly after his confirmation, Salazar announced he would shelve the 77 disputed leases pending "a fresh look" at the adequacy of BLM's environmental reviews. At the same time, Salazar refused to bar the parcels permanently from drilling.

Mike Lee, Gov. Jon Huntsman Jr.'s former general counsel and attorney for the counties, said even though Salazar made his move after the federal judge's ruling, that didn't give him the authority to suspend the leases.

Salazar's action, Lee said, harmed the counties' economies because they base their budgets on oil and gas royalty revenues as well as taxes realized from gas-field jobs.

"These are local economies, small communities heavily dependent on ... oil and gas production," Lee said Thursday. "It's not just money going to some fat cats."

The Denver-based attorneys for the oil and gas companies didn't respond to a request for comment. Nor did the BLM. But the agency repeatedly has said it is not bound to issue leases just because someone won a bid. If individuals or organizations have protested the leases -- and all of the 77 parcels were under protest -- the BLM must resolve the objections before issuing the leases, a task that can take years.

While SUWA is not a party to the latest lawsuits -- not yet, anyway -- attorney Heidi McIntosh said she doubted the counties or drillers would get far with their claims.

"The counties are trying to base the lawsuit on speculative injury to someone else," she said.

The real crux of the issue is the restraining order, which bars the Interior Department from finalizing the leases, McIntosh said. "Secretary Salazar cannot reinstate those leases at this point."

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