California postpones oil, gas lease sales for fiscal year

08 May 2013 18:09  [Source: ICIS news]

HOUSTON (ICIS)--The US Bureau of Land Management (BLM) has postponed all oil and gas lease sales in California for the fiscal year that ends in September, a spokesman said on Wednesday, citing budget constraints and higher inspection and enforcement priorities.

The BLM had tentatively scheduled an oil and gas lease auction on 22 May for almost 1,300 acres (526 hectares) in Fresno and Kern counties, said David Christy of the BLM’s Central California District.

An auction for about 2,000 acres in Colusa County was another possibility for this fiscal year, but the agency had not yet conducted the environmental work on that area, Christy added.

The BLM said the sequester, or federal spending cuts that became effective in March, has resulted in budget constraints.

Additionally, the agency is focusing on higher priorities for conducting inspections and enforcement on existing leases and processing new applications for drilling permits.

“We’re just deferring new leases this year; work is going to continue on existing leases,” Christy said. “The main issue is that [current] operations are safe, and we’ll be processing applications for permits that allow them to drill wells or do additional work on existing wells.”

The BLM’s decision came after a federal judge ruled in March that the agency had violated the National Environmental Act and did not adequately consider the environmental impacts of hydraulic fracturing before auctioning about 2,700 acres of land in September 2011.

The two activist groups that had filed the lawsuit, the Sierra Club and the Center for Biological Diversity, said the BLM should rescind the oil and gas leases and conduct adequate environmental analyses.

However, the judge ordered the parties to submit a joint plan of action and reconvene on 15 April.

“We asked for an extension so we have until May 15,” Christy said on Wednesday.

The Sierra Club said it supports the BLM’s decision to postpone the sale of all oil and gas leases, adding that the agency “is taking seriously the recent federal court’s decision that unconventional oil and gas production, such as fracking, presents unknown risks to the public and requires federal agencies to ensure greater environmental protections”.

“BLM can not rely on its old, pre-fracking assumptions regarding oil and gas development,” the Sierra Club said. “Our public lands are too precious to be gambled with, especially for oil and gas companies’ short-term profits.”

The organisation urged the BLM and the Obama administration to consider the risks from “inadequately regulated oil extraction” and to invest in clean energy solutions.

Follow Tracy on Twitter

By: Tracy Dang
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly