Salazar blasts oil industry while outlining new land-lease reforms

Interior Secretary Ken Salazar Wednesday once again blasted the oil-and-gas industry for attacking his policies and for abuses committed under previous administrations. The comments came during a conference call in which the Secretary announced new federal leasing reforms for drilling on public lands.

ken salazar

Salazar, the focus of repeated grilling Wednesday on whether he plans to run for Colorado governor given the withdrawal of Gov. Bill Ritter, sidestepped those questions and outlined an aggressive new leasing program meant to continue domestic oil and gas exploration and production but under stronger environmental and public health protections.

“The difference is that in the prior administration the oil and gas industry essentially were the kings of the world,” Salazar told reporters. “Whatever they wanted to happen essentially happened. The department was essentially a handmaiden of the industry.”

Salazar described new guidelines for U.S. Bureau of Land Management (BLM) field offices when it comes to identifying and leasing appropriate parcels; new environmental review policies that take a closer look at other natural attributes of a proposed lease parcel; and a Department of the Interior Energy Reform Team to oversee the changes.

A ‘command-and-control system’

Critics were quick to jump on the plan.

“We are disappointed to see the DOI moving to a bureaucratic command-and-control system in which government bureaucrats — rather than scientists with expertise in natural gas and oil development — dictate where energy development should occur. The market-based system has worked well for decades,” Independent Petroleum Association of Mountain States (IPAMS) government affairs director Kathleen Sgamma said in a release.

Salazar, who has grown increasingly pointed in his rebukes of the industry, said the notion that the DOI is trying to slow or shut down oil and gas production on public lands is patently false.

“I expect that the shrill nature of the criticisms from the oil and gas industry will come anyway, but there is a reality here and I think the facts speak for themselves. Those facts are that in 2009 the BLM held 35 onshore oil and gas leases, including four lease sales in December of ’09 alone. That’s 2,542 parcels covering 2.9 million acres.”

State Senate Minority Leader Josh Penry, R-Grand Junction, a frequent critic of the more environmentally stringent drilling regulations passed by the legislature last spring, issued a statement comparing Salazar’s announcement with the new state rules.

“Punitive restrictions on this important industry have already caused devastating job losses in my hometown,” Penry said. “Why on earth would Secretary Salazar want to take Colorado’s job-killing rules national?”

Good-for-business guidelines

Proponents of Salazar’s reforms say the recent slowdown is a function of the global recession and plummeting commodity prices. They also say better guidelines and closer government and public scrutiny will lead to fewer appeals of lease sales and less uncertainty for industry investors. In other words, they believe the new guidelines would be good for business.

Salazar cited records that demonstrated 40 percent of BLM leases were protested in 2008, during the Bush years, compared to 1 percent protested in 1998.

“A Department of Interior that was bringing about a slowdown or a moratorium on oil and gas development would have brought an end to much of that oil and gas leasing [in 2009] and we did not,” Salazar said. “Those from the industry who are crying out are simply crying because we are being thoughtful and are supporting development in the right way and in the right places.”

Indeed, representatives of Colorado’s oil and gas industry were much more measured than Penry in their response to Salazar’s reforms, acknowledging that they could be dealing with him as governor later this year.

“The natural gas industry will continue to work with the Department of Interior to ensure that energy resources are developed responsibly on federal lands,” said Tisha Conoly Schuller, president of the Colorado Oil & Gas Association (COGA).

“Once we review the new guidelines, we will work with Secretary Salazar and the BLM to ensure that the process provides some regulatory certainty for industry; it’s important that lease protests are reduced and that the playing field is level for all energy development.”

COGA is currently suing the state over the new Colorado rules, which Republicans on the gubernatorial campaign trail– including Penry, until he dropped out and backed former GOP congressman Scott McInnis– have used as a rallying cry against the Ritter administration. But Conoly Schuller said COGA will work to promote natural gas production no matter who is in the governor’s mansion.

“The natural gas industry is working with this administration, and we will continue to work with the next administration, regardless of party,” she said. “Our focus is to ensure that natural gas is a key element of Colorado’s energy solution. We wish the Governor and his family well.”

The candy shop

Environmentalists and sportsmen were effusive in their praise for the reforms, which they say will allow them more input on the recreational value of a potential lease parcel before it’s fast-tracked for drilling using categorical exclusions granted during the Bush administration under the Energy Policy Act of 2005.

“The steps outlined by Secretary Salazar should result in more effective conservation of important fish and wildlife habitat and sustaining our fishing and hunting opportunities,” Leah Elwell, conservation coordinator for the Federation of Fly Fishers, said in a release.

Salazar acknowledged the competing resources at play in federal oil and gas leasing. He said the Obama administration knows it can do much better when it comes to balancing wildlife habitat, energy development and public health.

“In the past our public lands were the essential candy store of the oil and gas industry, walk in and take whatever they wanted, and that’s not the way it ought to be done,” he said.

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