SAN FRANCISCO — Leading oil industry groups said Thursday federal land managers are blocking new energy development and job creation by postponing all oil and gas lease auctions on prime public lands in California until October.
Officials with the American Petroleum Institute, the largest lobbying group for the oil and gas industry, said the U.S. Bureau of Land Management's recent announcement that it will temporarily put off energy leasing in the state will prevent economic growth.
"We now know that California holds a vast amount of oil and natural gas resources, especially in the Monterey Shale located in the central part of the state," John Felmy, the chief economist said in a conference call with reporters Thursday. "Unfortunately, current federal policy continues to prevent our nation from taking full advantage of this opportunity."
BLM has said Friday's decision was forced by sequester-related budget problems, low staffing and the toll of environmental litigation over parcels near the Monterey Shale, one of the nation's largest deposits of shale oil.
The immediate impact was to postpone an auction planned for later this month for leases to drill almost 1,300 acres of public lands in Fresno and Kern counties.
Another auction for about 2,000 acres that had been in the works in Colusa County, about 75 miles northwest of Sacramento, also was put on hold until the end of the fiscal year.
The agency will instead concentrate on enforcement of existing leases, issuing drilling permits for leased parcels and granting renewable energy permits, BLM's state director Jim Kenna said earlier this week.
Postponing the auctions will set the government back about $25,000 in rent and bids from the lease sales, Kenna said.
The Institute for Energy Research, a conservative advocacy group, went further in its criticism, calling the decision "the Obama plan to maximize the sequester's harm to the U.S. economy."
"The American people deserve a full accounting of the Obama administration's policies for public lands, and Congress must force BLM to answer for (the) decision," the group's Senior Vice President Daniel Kish said in a statement.
The agency made its decision after a federal judge ruled last month that BLM violated a key environmental law when it auctioned 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. The ruling was in response to a lawsuit by the nonprofit Center for Biological Diversity, which alleged the bureau had not properly reviewed the environmental risks associated with hydraulic fracturing and other types of oil and gas development.
"(The) Interior Department continues to auction off our public lands for oil development without seriously considering the pollution risks of fracking," said Brendan Cummings, an attorney with the center.