Denver, CO (Feb. 5) – Interior Secretary Ken Salazar’s decision to cancel previously issued oil and gas leases on 130,000 acres of federal government owned lands in Utah is “is going to cost the state of Utah many millions of dollars in lost revenues, right at a time when states are struggling to make ends meet,” according to a Western Democratic state senator.
“Secretary Salazar’s decision is a disappointment on many levels,” said Wyoming Senator Bill Vasey (D-Rawlins), Chairman of Americans for American Energy. “As a state legislator who is right now looking at having to make hard choices at the state level in tough economic times, I know that natural resource development is one of the few bright spots we have in the West.”
“In fact, I understand that Utah may have to cut back the length of its school year to address its budget shortfall. This decision may make that situation worse," Vasey said.
The Salazar decision “runs counter to current efforts to stimulate the nation’s economy,” added Greg Schnacke, President of Americans for American Energy. “This move will hurt economic development across the West and deprive Americans of large, new sources of clean U.S. energy.”
“Coming on the heels of one of the largest run-ups ever seen in energy prices this past year, the Secretary’s decision is a major disappointment for those advocating responsible development of domestic energy reserves to reduce our reliance on foreign sources of energy,” Schnacke said. “This decision runs counter to the notion of economic stimulus because it kills jobs, reduces tax revenue for schools and communities and continues America on the path of dependency on foreign sources of energy which aids our enemies abroad.”
“I hope this decision does not foreshadow where the Obama Administration will come down on new offshore drilling,” he added.
Schnacke explained that the Utah lease sale was the product of a seven-year public land management planning process, and will cost Utah millions of dollars through losses of royalty and tax revenue. The lands that were affected were thought to contain significant new natural gas reserves that would eventually serve American markets in Utah, the western U.S. and in the Midwest. Although Utah’s unemployment rate is significantly lower than the nation’s, the state is facing up to a 15% budget shortfall, according to some reports.
“Natural resource development is a significant contributor to Utah’s economy and unemployment rates in the areas of Utah that produce oil and gas are traditionally very low,” Schnacke said.
“The East Coast environmental extremists who are applauding this decision don’t have to make a payroll in Utah, or decide whether school kids must be sent home in order to balance the state budget,” said Schnacke.
The BLM manages some 22.9 million acres of lands in Utah with approximately 4.5 million acres currently under lease. In 1984, approximately 20 million acres were under lease according to industry sources. Surface disturbance is limited to about 31,000 acres which is less than 0.1%. Leasing is the first step in the oil and gas development process. The issuance of a lease does not guarantee that oil or gas will be found and much scientific and technical work must be completed to make that determination. In order to actually receive a federal permit to produce oil and gas, additional federal environmental requirements must be met including comprehensive NEPA environmental impact analysis.
“We call upon Secretary Salazar to conduct a rapid re-review of these leases and allow this responsible American energy development to go forward,” said Schnacke.