Protests challenge state oil & gas leases in Red Desert

Several groups are asking state officials to reject oil and gas lease bids on 36 state parcels in the northern Red Desert and the Gold Triangle area because of potential impacts to historic trails and sensitive wildlife habitat.

The Office of State Lands already received lease bids for the parcels that the groups say should be withdrawn. In addition to cultural and environmental values, the groups say leasing some of the parcels would complicate proposed state-federal swaps designed to benefit the state by divesting of areas that are difficult to access and profit from due to restrictions on surrounding federal property.

In some instances, for example, road-building may be prohibited or restricted, earning the lands — state school trust property — the moniker of “stranded” state parcels.

Those stranded state parcels — located in federal wilderness areas, wilderness study areas and “areas of critical environmental concern,” are under study by a legislative committee considering how and whether to exchange them for more accessible federal lands. Yet as the legislative gears grind, a separate state board is scheduled to consider Aug. 9 whether to accept the contested bids.

“A lot of the parcels up for sale are ID’ed on [the legislative committee’s] spreadsheet as appropriate for an exchange,” said Steff Kessler, program director for the Wyoming Outdoor Council, one of the groups contesting the lease sale. “An oil and gas lease would complicate the [exchange] issue,” she said. “It adds a monkey wrench to the process.”

The State Board of Land Commissioners that’s scheduled to approve the bids at its Aug. 9 meeting is made up of Wyoming’s top five elected officials. Wyoming obtained the land from the federal government at statehood.

The board is charged by the state Constitution “to realize the largest possible proceeds” from the school-trust lands.

“That’s their core responsibility,” said Jason Crowder, assistant director at the Office of State Lands and Investments. The bulk of revenues are earmarked for K-12 education. The proposed leases are conditioned, however, with stipulations that seek to protect natural and historic values, Crowder said.

“There are development rules that have taken into account these wildlife and cultural resources,” Crowder said. Those include restrictions on when drilling might occur, for example, or setbacks from waterways.

“So, they have that Constitutional mandate, but they’ve taken that a step further,” he said of the State Board of Land Commissioners that oversees the property. “We can require a lessee to abide by certain stipulations to protect those [other] resources.”

Funding schools

Wyoming is struggling to fund its educational system, long reliant on mineral revenues, after a downturn in that sector in recent years. The bids on 21 parcels in question would garner $50,995 from energy interests. The leases cover 8,885 acres according to calculations made by WyoFile, based on bids posted on the state land office website. Successful lessees also will pay $1 an acre in annual rental fees for the five-year lease terms.

In addition to the 21 leases, located in the Red Desert, the state received bids on another 15 leases in sensitive wildlife habitat where no development has occurred, the groups say. The state held the online auction between July 11-18. The other 15 leases fall in an undeveloped area known as the Golden Triangle located at the southwestern edge of the Wind River Range and valued for its wildlife habitat. Among other resources, the triangle has sage grouse leks or breeding grounds that host more than 100 strutting males at a time.

The groups are asking the land commissioners to withdraw the 36 leases when it meets next week. Tom Rea, president of the Wyoming Chapter of the Oregon-California Trails Association; Jason Baldes, a member of the Eastern Shoshone Tribe who operates the Tribal Partnership Program with the National Wildlife Federation; and Mike Burd, a Green River sportsman and trona miner joined the Outdoor Council in protesting the leases.

Leasing would create “future management conflicts,” WOC executive director Lisa McGee wrote Gov. Matt Mead (R), chairman of the land board. “This is because some of these areas are so fragile, pristine or so easily disrupted, that a single well could significantly erode the integrity of the landscape or resource.”

There’s a better alternative, she wrote, one “that will ultimately be more lucrative than oil and gas leasing.” That alternative would be to follow the lead of the joint Agriculture, State and Public Lands and Water Resources committee and seek to exchange the state property for more accessible, less sensitive federal lands.

“At its last meeting, the committee voted to draft a resolution for the upcoming legislative session that would task our [federal] delegation to pursue, as many other western states have done, an exchange via federal legislation,” McGee’s letter said. “We believe the state will have far greater economic development opportunities with a coordinated land exchange involving these Northern Red Desert parcels (and others). Leasing these parcels now forecloses this future option.”

Lawmakers on the joint agriculture committee in June received a statewide list of so-called stranded lands amounting to 101,246 acres. Some are constrained by surrounding federal property designated as wilderness, where roadbuilding is prohibited. Other tracts are in federal wilderness study areas that must be managed to preserve wilderness characteristics. Others, still, are in areas where federal land managers have earmarked the landscape as an area of critical environmental concern.

In a report to the joint agriculture committee, the state lands office said Wyoming earned $194,122 from stranded properties in FY 2017.

Will there be oil rigs on the Oregon Trail?

What alarms McGee, Rea, Baldes, Burd and others are that two of the state parcels that received bids cover national historic trails. They “lie directly on top of or within the corridors of the Oregon/California/Mormon/Pony Express trails,” WOC wrote in an email to its members. Furthermore, four parcels are in or adjacent to federal Bureau of Land Management wilderness study areas. No drilling is allowed on the BLM lands and the state parcels are “far from roads and infrastructure,” the release said.

Four parcels are in the boundaries of BLM-designated areas where oil and gas leasing is prohibited to protect cultural and natural resources, the alert said. Three parcels are in the BLM’s designated South Pass historic landscape where views from the emigrant trails are “nationally significant,” the alert said.

Finally, 15 parcels contain crucial big game winter range or greater sage grouse core habitat.

The parcels were auctioned because they were nominated for sale, Crowder, the assistant director at the state lands office said. “It was 100 percent nominated by industry,” he said of the parcels in the recent statewide auction.

The state lands office offered 187 parcels covering 65,335 acres in 15 counties, according to a recent auction announcement posted on its website — far more than the 36 parcels the groups are contesting. At the July 11-18 sale, bidders made successful offerings on 128 parcels covering 40,915 acres.

The state received a total of $6,943,324 in bids in the statewide sale, according to the auction announcement. More than $6.2 million would be deposited in the state’s common school fund for K-12 education if the Board of Land Commissioners approves all the bids on Aug. 9.

In addition to the bid money, Wyoming would earn a royalty of 16 and 2/3 percent of production or market value of extracted minerals.

State seeks to protect lands with restrictions

Wyoming understands that its school trust property holds a variety of values, Crowder said. When parcels are nominated for sale, a list of them is circulated to the Wyoming Game and Fish Department and the State Historic Preservation Office for input.

Feedback is then incorporated in stipulations that limit what a lessee can do on the property, Crowder said. Stipulations that are applied to some of the protested leases include provisions to protect archeology, prevent the spread of aquatic invasive species, protect greater sage grouse core areas and big game winter range and to guard streams and lakes.

There are no provisions to protect views, like those along the historic trails, Crowder said. But, energy companies have been cooperative in such cases where conflicts arise, he said.

“Every company that we have worked with … they’ve really been good about moving around the parcel,” and developing in appropriate locations, he said. “They can hide pump jacks.”  

But the stipulations or protections aren’t enough to satisfy critics. “We don’t think the stipulations were tailored to and reflect the circumstances of surrounding lands,” WOC’s Kessler said.

“The fact that the state could offer a lease parcel under the Boars Tusk — the most iconic symbol of the Red Desert, and not know what they are doing is concerning,” she said. The Boars Tusk lease was later withdrawn, Kessler said. The state delayed that lease sale to ensure proper stipulations were in place, Crowder wrote in an email.

But other worrisome leases remain, including ones “smack dab on the Oregon Trail, in wilderness study areas where drilling is not allowed and access is pretty much impossible,” Kessler said. “It just doesn’t make sense.”

If it’s leased is it lost?

Conservationists have long promoted a warning about oil and gas leasing, telling the public that “once it’s leased, it’s lost.” This is because an energy company obtains various rights once it has paid its lease bid and rental fee. Conservation groups focus scrutiny of federal mineral leases on plans that propose what areas are appropriate for leasing, and then on the actual lease proposals themselves, weighing in early.

But WOC and others appeared blindsided by the state process. There was no widespread state call for public comment on whether the offered parcels were appropriate to develop, Kessler said.

“We found out this was up on the docket some time in June,” Kessler said. Added Crowder, “There’s really not a point [set aside] for public input in that process,” before the leases go in front of the state land board.

Bidding is “the first opportunity,” for a company to look into the feasibility of leasing, he said. “If they don’t have the lease, they can’t start that process of [conducting due] diligence.

“Once they get to that parcel, they have right to access that mineral,” Crowder said. A state lease does not give a company access rights through neighboring property. “They still have to comply with all the BLM regs to access that parcel.”

Contrary to the conservation maxim, “I would not say all is lost at that [leasing] point,” Crowder said. And while the Constitution protects education’s endowment, it’s silent on cultural and environmental resources. “The Constitution doesn’t take those into account,” he said.

Even as Crowder’s agency sells leases, it continues to work with the joint agriculture committee, he said. “Now we’re at the point of prioritizing those [stranded parcels] so we can talk to the Legislature,” he said.

Meantime, the State Board of Land Commissioners will determine the fate of the controversial parcels. While there’s no formal deadline for comment, leasing critics nevertheless urge residents to lobby the land board. A report and recommendation to the board is due five days before the Aug. 9 meeting, Crowder said.

Kessler and her supporters hope the leases would be withdrawn or deferred without harm to the state’s education system. “We understand and support the mandate for these state land parcels,” she said. “Because of that we’ve been working with the state ag committee on a proactive solution.

“Instead of kind of setting yourself up for conflict or frustration, it makes much more sense to exchange, consolidate your state lands in a place where you can access them,” she said. “What states have been turning to is putting this in Congressional legislation where the language essentially tells the BLM ‘You will do this land exchange with the state.’”

Such laws identify parcels and acreages and give the federal agency a timeline to act, she said. “It kicks up to a higher priority in the BLM where they allocate the resources.”

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There should be little difficulty in determining what’s a fair trade, Kessler said — a critical component in exchanges where the value of underground resources like oil and gas may be obscure.

“Most of these issues have been sorted out,” including in successful exchanges in Utah, she said. “It just takes research to ID the best way to go about the valuation and exchange. It’s been done enough. This is not rocket science.”