POWELL — Tens of thousands of acres of local public lands — running through Badger Basin to the Montana border and west to the Chief Joseph Highway — were leased last month for potential energy exploration.
Though development could be years off, the sales have excited some in the energy industry about prospects in Park County — and sparked protests from those concerned about development in critical wildlife habitat on the edge of the Greater Yellowstone Ecosystem. Many of the tracts of land sold in December are in areas that haven’t seen exploration for decades, if ever.
The Bureau of Land Management’s fourth quarter lease auctions in Wyoming covered 173,000 acres — including nearly 38,000 acres in Park County — and netted more than $10.6 million for the federal and state governments. About 60% of leases wind up being developed, the bureau says.
The sales sound big, but pale in comparison to the more than 9 million acres of BLM-managed leases in Wyoming. In 2018, BLM Wyoming raised about $117 million through oil and gas lease sales.
In the Dec. 10-11 quarterly sale, land in the Big Sand Coulee area, on Polecat Bench, north of the Ralston Reservoir and near the Clarks Fork Canyon were leased by a number of companies — all with headquarters outside of the state. The sales could bring future revenue for the county and state in the forms of jobs and taxes, but environmental groups could launch legal challenges before any development takes place.
The BLM offered up a total of 37 tracts of land in Park County, all nominated for leasing following an expression of interest by developers.
“The BLM won’t offer any tracts of land unless someone has requested it,” noted Steve Degenfelder, a spokesman for Kirkwood Resources, LLC, in Casper and a member of the board of directors of the Petroleum Association of Wyoming.
The interest is a positive sign for future development in Park County, Degenfelder said. However, others have taken a dimmer view.
The sales were opposed by several conservation entities, including the National Audubon Society, which is concerned about the majority of the Wyoming leases falling inside sage grouse habitat.
“They’re trying to get as much land leased while they have the opportunity to force it through,” said Brian Rutledge, the society’s vice president. “They’ve got a sympathetic administration that’s allowing this.”
Nationally, the Trump administration has been pressing to open public land to energy-producing companies, resulting in a 10-fold increase in leases across the West since 2016.
“The impetus is to make hay while the sun shines,” said Rutledge.
Of the companies that purchased the Park County leases, all were outfits “that don’t normally work in Wyoming,” he said.
“We have some really good energy companies that we work with in the state of Wyoming,” Rutledge said. “But we’re also seeing an awful lot of speculatives bought in these lease sales.”
John Rader, conservation advocate with the Wyoming Outdoor Council, said most of the tracts leased in Park County have little to no potential for oil and gas.
“We’re seeing a pattern of very irresponsible leasing in the middle of sage grouse core and migrating wildlife habitat,” Rader said. “They’re tying up our land and jeopardizing wildlife for bargain basement prices.”
Meanwhile, the National Parks Conservation Association argued in a protest that, in offering 23 of the 37 tracts in Park County, the BLM did not comply with its own agency directives on big-game winter range and migration corridors; the NPCA also cited concern about the leases impacting “big game migration routes and habitat connected to the vitality of Yellowstone National Park” and potentially degrading the experience of Yellowstone and Grand Teton park visitors. The group also argued the BLM had failed to follow the National Environmental Policy Act (NEPA), take a hard look at the potential impacts or fully involve the public in its decision.
“Poorly planned oil and gas development on the landscape adjacent to or connected to national park units can result in significant impacts on national park resources including visual impairment, increased light and air pollution, and water quality and quantity,” said Sharon Mader of the NPCA.
However, the BLM concluded that, while the NPCA might disagree with the leases, it had followed its regulations and the law.
Bureau leaders also rejected five other protests for various parcels across the state from the National Wildlife Federation, Wyoming Wildlife Federation, Saratoga-Encampment-Rawlins Conservation District, the Wyoming Outdoor Council, National Audubon Society, The Wilderness Society, Center for Biological Diversity, Sierra Club, Waterkeeper Alliance, Western Watersheds Project and WildEarth Guardians, plus dozens of protests from individuals who submitted form letters.
Out of the 169 parcels initially reviewed by the BLM across the state, 15 were completely or partially deferred by the bureau, including two in wildlife migration corridors.
Before offering leases, the BLM studies expressions of interest to ensure they aren’t in conflict with parks or Wyoming Game and Fish Department interests, said Brad Purdy, state public affairs specialist for the bureau.
As for the 37 parcels offered in Park County leases, all went to auction, but seven of the protested parcels failed to draw a buyer.
Several of the Wyoming leases sold for the minimum of $2 an acre. If not sold at auction, tracts can later be sold by the BLM for as little as $1.50 per acre.
Some might wonder why conservation organizations don’t put their money where their mouth is and simply buy the leases at auction. The answer: The 1920 Mineral Leasing Act requires lessees to “exercise reasonable diligence in developing and producing” energy resources. In other words, if you don’t intend on drilling, you can’t be part of the auction.
Once leased, winning bidders are given 10 years to develop. If oil or gas is found, the lease is held in production in perpetuity — and royalties flow.
Somewhere between 24-25% of revenue comes back to federal, state and local governments, said Degenfelder, of Kirkwood Resources.
“Now you know how we have such a small population but also have fantastic schools,” he said.
Degenfelder likes the benefits of the tax revenues that development provides, but he also is an avid outdoorsman. His one complaint is that some don’t connect the taxes and the benefits.
“I need to have a job to pay for my standard of living. And the state is no different,” he said. “I’m a big advocate of being a Wyoming citizen, but I also know what needs to be done to maintain the lifestyle we have become accustomed to.”
Wyoming is the biggest net energy supplier in the U.S. It’s the nation’s largest coalproducing state, produces more natural gas from federal leases than any other state and the second-highest amount of crude oil from onshore federal leases.
Meanwhile, tourism is the state’s second-largest industry — employing more people than energy — and is especially important in this northwest corner of the state, with its national parks and forests. Drawing outdoor sports enthusiasts and tourists and their fat wallets is important to Park County’s bottom line.
Preserving the remaining large swaths of wilderness for wildlife habitat is critical, said Rutledge, of the Audubon Society. Wyoming Game and Fish Department criteria show that key game species are struggling and facing new challenges with diseases. Sage grouse populations are also down for the past three years.
The leased parcels include multiple stipulations made to protect habitat for a myriad of reasons, including wildlife, plant, erosion, important cultural sites, geologic and paleontological resources, water resources and designated campgrounds, trailheads, day use areas and similar recreation sites.
“A lot of people like to say we shouldn’t even be leasing in this type of habitat. The leasing itself isn’t what causes disturbance to the habitat,” said Purdy, of the BLM.
He pointed to the extensive restrictions as the agency’s response to allowing development in sensitive areas.
“We use stipulations to balance development, conservation and the other resources that are out there,” he said.
All development must start with a drilling plan in an application for permit to drill that adheres to the National Environmental Policy Act (NEPA). Once the plan is approved, the BLM starts routine inspections to make sure companies are following the rules, Purdy said.
“If you’re out there and having instances of non-compliance, we’re going to increase inspections and enforcement,” he said.
The bureaucracy is intended to protect habitat, but environmental groups believe some of the fourth quarter parcels shouldn’t have been leased in the first place.
“BLM is supposed to be prioritizing development outside of core [sage grouse] habitat according to state and federal law,” said Rader, of the Wyoming Outdoor Council. “But in this lease sale almost every single parcel is in sage grouse habitat and almost half of the parcels are in core habitat. Even if the stipulations are mitigating some of the impacts, the volume of leasing in prime habitat is massive.”
Some 98% of leases sold in the fourth quarter lie inside sage grouse habitat, with 48% inside core habitat, said Rutledge, of the Audubon Society.
Rutledge played a role in the development of stipulations placed on parcels and “certainly they help,” he said. “But the idea was to use that habitat as a last resort, not as a first choice.”
At this point, one of the only ways to slow or stop future sales and development is through litigation.
“In my opinion, many of these lease sales are illegal,” Rutledge said. “We’ve filed objections and will continue to fight this.”
He added, “we’ll never recuperate those sites once they’re developed. This is armed resistance. We’ve got to go trench by trench holding these guys back. They’ll just bury us if we’re not careful.”
The BLM is planning to offer another 105 parcels equalling approximately 118,000 acres at its 2020 first quarter lease sale, but it remains to be seen how parcels are actually auctioned; a preliminary injunction issued by a U.S. District Court judge in Idaho has called the Trump administration’s changes to a 2015 collaborative sage grouse plan into question.