WASHINGTON, Feb 4 (Reuters) - Reversing Bush administration policy, the U.S. Interior Department on Wednesday canceled energy leases that would have opened lands near national parks in Utah to oil and natural gas drilling.
"I have directed (the department's) Bureau of Land Management not to accept the bids," Interior Secretary Ken Salazar told reporters on a conference call.
Environmental groups hailed the decision. They had filed a suit against the leases, complaining that Bush was rushing through a last-minute plan to auction pristine wilderness areas. They also said exploration would hurt tourism.
Oil and gas industry representatives expressed concern about the Obama administration's energy policy.
Salazar said the department would return the $6 million in bids on the 103,000 acres of contested parcels of land. He also said the department would reassess the decision to open these lands to energy exploration, which drew a firestorm of criticism from lawmakers and environmental groups.
He raised concerns about whether the department conducted the proper environmental evaluations and consultations with government agencies before proceeding with the lease sale.
Salazar said President Barack Obama supports responsible development of energy resources, but those interests must be weighed against protection for national landscapes.
No major integrated oil companies submitted winning bids for the disputed tracts. Winning bidders that will get refunds include Bill Barrett Corp (BBG.N), Questar Exploration and Production Co (STR.N) and prviately held Mustang Fuel Corp., Twlight Resources LLC and Enduring Resources LLC.
About a fourth of the total $6 million in winning bids for the parcels came from a college student who protested the lease sale by bidding on tracts he never intended to pay for.
The department never officially accepted the bids offered for these areas at the December lease sale held in the waning days of the Bush presidency.
A U.S. District Court had temporarily blocked the department from finalizing the lease sale, in response to a lawsuit from environmental groups including the Natural Resources Defense Council and the Sierra Club.
The groups charged that opening the areas to oil and gas development would hurt air quality at several national parks. They said the Bureau of Land Management did not complete the environmental impact analysis mandated by federal regulations.
"This is the first critical step in restoring balance to managing the public lands," said Sharon Buccino, a senior attorney at the Natural Resources Defense Council. "We had in the last administration an approach that really elevated energy development ... to the dominant use of public land, to the exclusion of a lot of other important values."
Buccino said the groups would keep pursuing their case to contest government resource management plans that authorized the Utah lease sale.
Charles Drevna, president of National Petrochemical and Refiners Association, questioned how this decision fits into Obama's stated commitment to energy independence.
"How does one (have) a goal of limiting dependence on foreign sources of oil and natural gas and at the same time throw up artificial road blocks to development of our own natural resources," Drevna told Reuters. (Additional reporting by Tom Doggett; Editing by David Gregorio)