Oil and gas companies have requested a record number of parcels in Utah to be available in the upcoming Bureau of Land Management lease sale — nearly two-thirds of them areas previously unexplored for drilling. The increase in requests likely reflects soaring oil and gas prices.
The BLM will offer 281,530 acres for oil and gas drilling in its June 25 sale, or about 70 percent of what the industry requested. That is more than double the highest number of acres requested by industry in the past under current BLM procedures.
Businesses asked for 398,000 acres, but the BLM trimmed the figure after a resource analysis, including a review of environmental effects.
Analysts say the move to explore land that hasn't been previously drilled reflects an increased willingness to take risks that may not pay off.
"What you're seeing is a response to elevated commodity prices. The longer they stay elevated, the more people will move up that ladder of risk," said John Baza, associate director of oil and gas for the Utah Division of Oil and Gas Mining.
Two-thirds of the land — in Juab, Millard, Sanpete and Sevier counties — has not been a source of oil and gas, the agency reports.
The leasings have occurred for years, but the opening of areas previously considered wilderness quality has drawn protests from conservation groups.
Steve Bloch, attorney for the Southern Utah Wilderness Alliance, said the group hadn't yet analyzed the parcels offered in the June sale to determine what it would protest, but that the leasing of previously unexplored lands is troubling.
"Why are we leasing these lands to companies when we know that there isn't anything there — and allowing them to scar the landscape when all the research shows these areas don't have the resources?" he asked.
Mining companies that want to lease land can nominate parcels of BLM property that become available at quarterly auctions. Once land is approved, interested parties can bid on the parcels starting at $2 per acre.
Winning bidders then pay nominal fees over the lease's 10-year life. They pay 12.5 percent royalties on any profits, split between federal and state governments.
Robert Lopez, branch chief of leasing for the Utah BLM, said companies that request specific acres to be offered in auctions have likely conducted geologic studies to help determine if they have oil or gas to offer.
The names of the requesting companies are not public, Lopez said.
Included in the land approved by the BLM for the June lease sale is 15,582 acres within the Manti-LaSal National Forest, which was approved by the U.S. Forest Service, Lopez said. He said the Forest Service places greater restrictions on forests, making them less attractive to businesses.