Statewide Gas Lease Auction Protests


On Wednesday, October 15, 2014, beginning at 9:30 am MDT, the Idaho Board of Land Commissioners will offer oil and gas leases of state lands and sub-surface mineral rights for sale to the highest bidder, at a public auction in the Idaho Department of Fish and Game Trophy Conference Room 101, at 600 South Walnut Street in Boise, Idaho [1]. The Idaho Department of Lands (IDL) periodically conducts these auctions and administers subsequent leases, with oversight and approval of the Land Board.  The 12.5-percent royalty derived from extracted oil and gas raises funds from lands held for the public trust and state wildlife and transportation departments and for specified beneficiary institutions through the state endowment trust.  Of the 11 tracts in Cassia, Gem, and Owyhee Counties, 600 acres in Cassia County and 160 acres in Gem County constitute state lands, while the nine parcels totaling 4,479 acres located in Owyhee County involve split estates of private landowners and state mineral holders [2].

Minimum, competitive bids by drilling companies at the oral auction open at only $0.25 per acre for the 5,279 acres available for leasing [3]. Successful bidders must pay their bid and the first year’s annual rent of $1.00 per acre for leases lasting up to ten years.  If these leases are not drilled or productive, IDL assesses additional drilling penalties of $1.00 per acre per year starting in the sixth year.  The state requires a $1,000 bond for exploration on each lease, which increases to $6,000 prior to drilling, in addition to a drilling permit bond issued by the Idaho Oil and Gas Conservation Commission.  Before entry on state lands for seismic exploration, companies must acquire IDL permits costing $100 per mile across contiguous tracts or a minimum of $100 per section.

At the last of several state lands and minerals auctions in Boise, on April 17, 2014, activists raised concerns about drilling under rivers and fossil fuel effects on climate change, demonstrating outside IDL headquarters and quietly occupying the auction room filled with gas company executives and attorneys who bid more than $1,148,435 to the state of Idaho [4]. The Idaho Department of Lands leased 17,700-plus acres for oil and gas drilling, including 1,415 acres of state public trust lands and minerals under or adjacent to Boise, Payette, and Snake river beds.  AM (Alta Mesa) Idaho of Houston, Texas, and Trendwell West of Rockford, Michigan, paid an average of $76 per acre for the 150  tracts in Ada, Canyon, Gem, Owyhee, Payette, and Washington counties.  The April 17 auction doubled the previously largest amount of Idaho public lands and minerals leased in one period, bringing the total to nearly 98,000 state acres, leased for as low as $2.35 per acre on average, besides the thousands more private acres leased in six southwestern counties [5].  Eighteen drilled but capped wells, awaiting pipelines and production and transportation infrastructure currently proposed or under construction, surround the first producing well in Idaho in February 2014, on the Teunissen Dairy near New Plymouth.  The Idaho Department of Environmental Quality found toluene from drilling mud in a water well several hundred feet away in fall 2012 [6]. Continue reading