‘Sequester’ cuts force halt to California oil, gas lease sales

The Obama administration this month canceled onshore oil and gas lease sales in California for the rest of this year, blaming the “sequester” budget cuts — but acknowledging they were breaking yet another federal law that requires them to hold the sales.

The Bureau of Land Management’s California office acknowledged canceling the three sales conflicts with the Mineral Leasing Act of 1920, which requires each state office to conduct four sales a year.

But spokesman David Christy said they had a choice between granting new leases or allowing companies to continue exploring on existing leases. He said the operators in California noted they’d prefer to work existing leases if given the choice.

“We’ve got limited staff and tight budgets, so something’s got to give,” Mr. Christy said. “If we put the resources into offering a new lease, then we’ll have to cut back on our enforcement and inspection, which affects the current leases, or we cut back on applications on a permit to drill — that’s for drilling new wells on existing leases.”

The move didn’t sit well with energy advocates, who said the bureau cannot pick and choose which laws to violate.

“Just because of their budget cuts, they can’t decide not to meet their obligations,” said Kathleen Sgamma, vice president of government affairs for the Western Energy Alliance.

She said not holding the sales actually costs the government money. She said for every dollar the bureau spends administering its onshore oil and gas program, companies return $89 to taxpayers.

“By cutting back on leasing, they’re forgoing revenue today and tomorrow,” she said.

Some energy groups said the bureau has not halted permitting of green energy projects and is in fact adding personnel to streamline permits for solar farms — a move that, if true, would expose political motivations, said Rep. James Lankford, Oklahoma Republican.

“Basically this is a setup where they’re going to use the sequester to disallow what they don’t like and continue to push forward on what they do,” said Mr. Lankford, chairman of the House Oversight and Government Reform Committee’s energy policy subcommittee.

Mr. Lankford is holding a hearing Thursday to look into impediments to oil and gas production on federal lands, and he said one key question will be why it takes so much longer to get permitted to drill on federal lands than it does on state or private land.

“If you get on federal land, it is the picture of inefficiency,” he said.

California is the only Bureau of Land Management office that has cut oil and gas leases and blamed sequestration.

The bureau headquarters office in Washington didn’t reply to repeated messages seeking comment.

The bureau in California has held just one of the four required lease sales this fiscal year. That sale was in December.

Three other planned sales have been canceled: one May 22, one on an unspecified date in June, and one Sept. 11.

The December sale brought in $104,099 in revenue. The sale in September 2012 brought in $846,900. But Mr. Christy said the upcoming sale that was just canceled would have only brought in about $10,000, based on estimated bids.

He didn’t have estimates for the other two sales that would have taken place later this year.

Mr. Christy said he didn’t have a dollar figure for the savings from canceling the sales.