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CHEYENNE, Wyo. — The number of oil and gas leases the Bureau of Land Management office in Wyoming will be auctioning off next February will hit a three-year low, according to bureau statistics.

And there's a variety of answers and finger-pointing between the BLM, the energy industry and conservation groups about why that is.

Just 31 leases will be offered at the BLM's auction in February, according to the bureau. That's the lowest amount of parcels offered at any BLM auction during at least the past three years, and it's less than a third of the 94 leases put up during the bureau's most recent auction later this month.

The sudden dip corresponds with a drop in the number of land parcels nominated by energy developers for auction. Just 45 parcels were nominated for February's auction, a fourth of the nominations received for the November auction.

And there are just 34 nominations on the preliminary list for the BLM auction following that, in May.

Fewer BLM leases sold means less money for the state, which gets about half the money brought in from the sales. November's auction brought in nearly $14 million in total receipts.

And the number of leases offered has declined overall during the past three years since 2008, when the BLM regularly sold more than 130 parcels at each auction. Starting this year, the agency reduced the number of auctions per year from six to four because of reduced demand.

But why are the number of nominations -- and, therefore, leases -- dropping? That all depends who you ask.

Michael Madrid, the BLM's fluid mineral operations branch chief in Wyoming, said it's a reflection of skittishness the energy industry had this past summer about a two-year backlog of unissued leases.

BLM only started moving to issue the leases in late summer, Madrid said.

And because lease nominations for February's auction had to be turned in by August -- six months before the auction -- Madrid said industry officials were likely leery about nominating more parcels and tying up more of their money when they weren't sure when they'd actually get the lease.

Madrid also said several auctions in the past have had fewer leases up for bid. The number of leases offered during the November auction, he said, were "surprisingly high."

"I guess it's all relative," he said. "It's not too bad."

But Bruce Hinchey, president of the Petroleum Association of Wyoming, said Madrid's explanation for the reduced number of leases offered was "a joke."

The BLM, he said, is refusing to put up leases for auction because of threats of lawsuits from environmental groups. The agency, he added, is also facing a lawsuit from the petroleum industry to try and force action on issuing 118 oil and gas leases in Wyoming and Utah.

"They're getting it coming and going right now because of the way they're handling everything that's going on down there with the lease auctions," Hinchey said. "Many of the companies I've talked to continue to nominate parcels, and they won't put them up."

BLM spokeswoman Mary Wilson denied that the bureau was withholding leases because of a fear of legal action.

"If we were skittish about lawsuits, we might as well just lock the doors and shutter the windows now," she said, laughing.

Erik Molvar, a wildlife biologist with the Laramie-based Biodiversity Conservation Alliance, also disputed Hinchey's reasoning. Molvar said the drop is because BLM has auctioned off too much land for oil and gas development.

"They've got almost all of Wyoming under lease and there's almost nothing left out there to offer for sale," he said.

 

Contact Jeremy Pelzer at jeremy.pelzer@trib.com or 307-632-1244.

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