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Tim DeChristopher Throws Utah Oil And Gas Drilling Leases Auction Into Chaos

PAUL FOY   12/19/08 08:53 PM ET   AP

Oil Utah

SALT LAKE CITY — An environmental activist tainted an auction of oil and gas drilling leases Friday by bidding up parcels of land by hundreds of thousands of dollars without any intention of paying for them, a federal official said.

The process was thrown into chaos and the bidding halted for a time before the auction was closed, with 116 parcels totaling 148,598 acres having sold for $7.2 million plus fees.

"He's tainted the entire auction," said Kent Hoffman, deputy state director for the U.S. Bureau of Land Management in Utah.

Hoffman said buyers will have 10 days to reconsider and withdraw their bids if they think they paid too much.

Tim DeChristopher, a 27-year-old University of Utah economics student, said his plan was to disrupt the auction and he feels he accomplished his goal.

DeChristopher won the bidding on 13 parcels, auction records show, and drove up the price of several other pieces of land.

"I thought I could be effective by making bids, driving up prices for others and winning some bids myself," the Salt Lake City man said.

Some bidders said they were forced to bid thousands of dollars more for their parcels, while others fumed that they lost their bids.

"We were hosed," said Jason Blake of Park City, a consulting geologist who was outbid on a 320-acre parcel. "It's very frustrating. I hope the guy is prosecuted."

Several bidders said they hadn't decided whether they would withdraw their bids. Some said they may reluctantly hold on to their leases _ despite the higher cost _ out of concern that the parcels might not go up for auction again under President-elect Barack Obama's administration.

BLM criminal investigators questioned DeChristopher, who says he expects to be charged. He was released and the case was referred to federal prosecutors for possible fraud charges, said Melodie Rydalch, a spokeswoman for the U.S. attorney's office.

"I'm willing to deal with that," DeChristopher said.

Other bidders at the auction had complained about DeChristopher as unfamiliar and bidding in an unconventional fashion, which raised suspicions, said Terry Catlin, leader of the BLM's Utah Energy Team.

DeChristopher snapped up 22,500 acres of land around Arches and Canyonlands parks but said he could afford to pay for only a few of those acres. He owes $1.7 million on all of his leases.

The sale of the leases has drawn complaints from environmental groups and scathing criticism from actor Robert Redford.

Activists said the sale would threaten Utah's wild lands and spoil the view from some of the state's spectacular national parks with drilling rigs.

"If we're going to sacrifice public lands, let's do it with some deliberation, not in a hasty way," said Joseph Flower, a University of Utah biology student who was among about 100 protesters outside the auction.

The bureau already had pulled some parcels from the sale in response to complaints from the National Park Service and others. Ultimately, the agency dropped more than half the 359,000 acres first proposed for auction.

Selma Sierra, who heads the BLM in Utah, said only 6 percent of lease parcels would ever see drilling because of the "costly and speculative" nature of the business. The federal government also typically imposes environmental safeguards on drilling parcels, Sierra said.

"Facts of the lease sale have been mischaracterized in the public forum, sowing confusion and misunderstanding," Sierra said.

Conservation groups sued Wednesday challenging 80 of the 132 lease parcels set to go up for bid, but the groups reached an agreement with the BLM one day later allowing the auction to go forward, according to the National Resources Defense Council.

The agreement filed with the U.S. District Court in Washington, D.C., stipulated that the government wouldn't issue leases on the 80 parcels for 30 days, giving a federal judge time to consider whether to block the leases.

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Filed by Nick Graham  |