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Feds holding back $100 million in drill leases

SALT LAKE CITY — Brian Wixom's company has paid the U.S. government hundreds of thousands of dollars for leases to drill for oil and gas on federal lands over the years, only to never put a rig in the ground.

The money simply sits in a federal bank account as Wixom and other drillers wait for an agonizing bureaucratic process to run its course.

As it turns out, the federal government is holding a boatload of money for leases it auctioned and sold but hasn't issued, holding them back for bureaucratic review because of environmental protests and lawsuits. The backlog grew exponentially under the administration of President George W. Bush as it pushed for more domestic drilling.

The Associated Press has calculated that the government is sitting on close to $100 million paid for millions of acres of energy leases in the Rocky Mountains that have been withheld for as long as seven years, according to records and interviews with BLM officials in Utah, Colorado and Wyoming.

Drillers are steamed by the process. They don't understand why the federal government is sitting on such an enormous sum of money, especially at a time when politicians in Washington are so focused on spending stimulus money to revive the economy.

"It's just crazy that the government, because of bureaucratic delays, is sitting on that kind of money," said Kathleen Sgamma, government affairs director for the Denver-based Independent Petroleum Association of Mountain States. "Talk about an economic stimulus."

So-called protest parcels have always been auctioned on a buyer-beware basis, yet that did little to deter speculators, brokers, drillers and oil companies in the past. It used to be that protests were resolved fairly easily — either a parcel was fit for oil and gas development or it wasn't. Now things have turned into "this long-term suspense," said Larry Williams, Utah director for the American Association of Professional Land Men.

"It's money sitting in the government's bank, not doing anybody good," Williams said. "It's just sitting there. The government can't use it, because they may have to give it back."

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