Feds auction prime California land for oil development

SAN FRANCISCO — The federal government auctioned off nearly 18,000 acres of oil leases on prime public lands on Wednesday in Central California, home to prized vineyards, several endangered species and one of the largest deposits of shale oil in the country.

Eight different groups — including oil companies — bid for the leases involving 15 parcels of land up for auction in rural stretches of Monterey, San Benito and Fresno counties, Bureau of Land Management spokesman David Christy said. The agency plans to announce the winners within 24 hours.

Numerous environmental groups who see the auction as a sign that California is next in line for an oil and gas boom protested outside the auction in Sacramento, with some activists donning hazmat suits.

Democratic Rep. Sam Farr had asked the agency to put the auction on hold over concerns that the bureau wasn't doing enough to monitor the potential impacts of hydraulic fracturing, or fracking.

Winning bidders would have to be granted an additional permit from the bureau in order to start drilling using traditional technologies, or fracking, a technique to extract hard-to-reach gas and oil by pummeling rocks deep underground with high-pressure water, sand and chemicals.

"Fracking is not something that we have yet accepted as a proven technology," Farr said. "The oil lies deep and the water is shallow and in the Salinas Valley, healthy water is more important than oil. It's our economic base for agriculture."

The U.S. Energy Information Administration estimated last year that California's Monterey Shale formation contains more than 15 billion barrels of "technically recoverable shale oil," more than the amount contained in the Bakken oil fields of Montana and North Dakota, where oil-producing rock is sandwiched between layers of shale about two miles under the ground.

The Western States Petroleum Association has said the Monterey deposit represents an important piece of the state's energy future, and that hydraulic fracturing is safe.

The parcels — which Christy said have never been drilled before — include scenic stretches of southern Monterey County, where cattle ranchers and wine grape growers rely on tight water supplies to irrigate their pasturelands and vineyards. The area is also part of the historic range of the endangered California condor, whose global population was recently estimated at less than 400 birds.

The Center for Biological Diversity filed suit against BLM over a smaller lease auction held in roughly the same region last year, claiming the bureau had failed to properly review the environmental risks associated with increased oil and gas development.

"Fracking is not only intensifying oil and gas development in areas that were in production before, but it's opening up some beautiful, wild places where you previously didn't have drilling," said attorney Kassie Siegel, adding that the group ultimately may file another lawsuit over Wednesday's auction.