US Interior Dept Orders Air Review of 77 Utah Oil, Gas Leases

WASHINGTON (Dow Jones Newswires), Jun. 11, 2009

The U.S. Department of the Interior Thursday ordered an air quality review for the area around 77 controversial oil and gas leases in Utah, saying some may ultimately be developed, but others would need "extensive" review.

The announcement is likely to be mixed news for the oil industry, reviving hopes for access in the area, but also further delaying exploration.

Earlier this year, Interior Secretary Ken Salazar acquiesced in the face of a showdown with Senate lawmakers, promising to review the leases after he had previously canceled the program.

The Interior Department had backed out of a late-2008 deal on 778 leases to drill for oil and gas in wilderness areas of Utah after environmental groups protested against development, saying the previous administration had failed to adequately conduct the required environmental and cultural assessments.

The Department Thursday ordered a comprehensive air quality strategy for the region, and told the Bureau of Land Management to conduct a final decision-making review of the 77 blocks.

Some of the parcels in areas with existing oil and gas development "may be appropriate for development after a final review," Interior said. "Other parcels in and near sensitive landscapes will require a more extensive, site-specific review," the agency added.

"This report helps us unwind the problems that landed these 77 parcels in court with a temporary injunction," Salazar said in a statement. "It is clear that in the rush to sell the leases, the previous Administration bypassed normal reviews and consultations with the National Park Service," he said, adding that many of them were near National Parks.  

Copyright (c) 2009 Dow Jones & Company, Inc.