US postpones oil, gas lease auctions in Calif.


Associated Press

Posted on May 7, 2013 at 5:01 PM

SAN FRANCISCO (AP) — Federal land managers on Tuesday postponed all oil and gas lease auctions in California until October, citing budget problems and low staffing as well as the toll of environmental litigation.

The U.S. Bureau of Land Management announced it would put off an auction planned for later this month for leases to drill almost 1,300 acres (over 526 hectares) of prime public lands near the Monterey Shale, home to one of the largest deposits of shale oil in America.

Another auction that had been in the works in the Ukiah area, about 100 miles (160 kilometers) north of San Francisco, also was put on hold until the end of the fiscal year.

A federal judge ruled last month that BLM had violated a key environmental law when the agency auctioned off the drilling rights for other parcels near the lush Salinas River Valley before performing a sweeping review of the impacts on water, wildlife and air quality. That came in response to a suit by environmentalists, who said the bureau had not properly reviewed the environmental risks associated with hydraulic fracturing and other types of oil and gas development.

"BLM's decision to cancel planned lease sales in California for 2013 is a welcome sign that the agency finally recognizes that its rubber-stamp approach to oil leasing is no longer viable," said Brendan Cummings, an attorney with the nonprofit Center for Biological Diversity, which sued over the previous auction.

The decision to postpone leasing doesn't mean that drilling on existing leases will stop, said BLM spokesman David Christy. The agency is concentrating its limited resources on enforcement on existing leases and other priorities, such as granting renewable energy permits, he said.

"For all the legal processes that take place, it takes a lot of staff time to gather information for litigation," Christy said. "So obviously there's some effect, but it wasn't like all by itself it shut us down."

A spokesman for the Western States Petroleum Association, whose members produce 80 percent of the state's oil, did not immediately respond to an email seeking comment.

Hydraulic fracturing, or fracking, has been quietly occurring for decades in California. The technique involves injecting high-pressure mixtures of water, sand or gravel, and chemicals into rock to extract oil. The technique is also used in other states to recover natural gas.

Environmentalists often worry that fracking can contaminate groundwater and pollute the air. The industry, however, has said the practice has been safely used for decades.


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