The recent uproar over oil and gas leasing in the Upper North Platte Valley in south-central Wyoming is anything but a battle of bumper sticker-style demagoguery between unswerving industry and conservation interests.

The industry is under real Wall Street pressure to make good on investments and secure natural gas supplies in an atmosphere of increasing environmental stipulations and pipeline contracts that extend 10 years into the future.

Wyoming owes its recent budget surpluses to the industry's successful efforts.

And even if they don't like the increasing density of well pad, pipeline and road networks on the landscape in the Rockies, conservation groups do expect the industry to snatch up any available leases in basin areas where natural gas reserves are already proven.

Factions from both sides have made compromises in recent years, understanding that Wyoming has deep interests in all the resources involved. But the Upper North Platte Valley hasn't been on the industry's radar.

That's why the latest clamor over proposed Bureau of Land Management leasing there has been viewed as a curious anomaly by nearly everyone involved.

"Frankly, the conservation community hasn't been worried about protecting (the Upper North Platte Valley) because it wasn't viewed as being at risk for development," said Erik Molvar, executive director of the Biodiversity Conservation Alliance.

Agency reconsiders

The BLM announced Friday afternoon it had pulled 13 parcels from its planned oil and gas lease sale on Tuesday.

The parcels encompass some 28,500 acres of federal minerals located in the Upper North Platte Valley near Encampment and Saratoga. A wide cross-section of local and regional stakeholders protested the lease parcels due to proximity to prime sage grouse, elk and mule deer habitat, prime trout fishing, recreation and agricultural resources.

Some 88 entities and individuals filed formal protests against the inclusion of the 13 parcels in Tuesday's oil and gas lease sale, according to the BLM. Gov. Dave Freudenthal added his support to delay leasing until more analysis is done.

North Platte Valley resident Jeb Steward is a Republican freshman in the state House of Representatives, and not your typical opposition leader to energy development in Wyoming. He represents a wide cross-section of Wyomingites who were stunned to learn that oil and gas developers might set up shop in one of Wyoming's most pristine mountain valleys.

Steward said local ranchers, town residents, outfitters and others have been involved in the BLM's revision of the Rawlins Field Office resource management plan. And the potential for oil and gas development just outside of Encampment was never a serious consideration.

"A lot of reasonable people are saying similar things," Steward said. "We merely want to take a step back and have some of these discussions up front to where we can balance this development better."

Unlikely reserves

It's not entirely unexpected to find opposition when federal lands are nominated for potential oil and gas development -- particularly when it involves pristine areas such as the Upper North Platte, one of Wyoming's most scenic valley communities.

What is unexpected is whether any oil or natural gas could possibly be found in the Precambrian sediment formations below the Encampment area.

"It caught most of us by surprise," said Steward, who provides contract ag services in the valley.

Steward said the area has a long cultural history tied not only to agriculture and recreation but to gold, silver and copper mining. But valley residents have to drive an hour or more to work in active oil and gas fields.

Steward said the Upper North Platte Valley has never been coveted for hydrocarbons.

"All the literature and knowledge had determined the resource in this area is zero, or negligible, (for oil and natural gas)," Steward said.

The Wyoming State Geological Survey agrees. WSGS geologist Rod DeBruin said there's neither the source rock to generate significant volumes of hydrocarbons, nor the reservoir rock to hold it.

"In general, that area doesn't have a very high potential," DeBruin said.

Even some longtime industry geologists in Wyoming gave the prospect for oil or gas development near Encampment a "snowball's chance" in Hades.

Which begs the question: Who nominated the parcels, and why?

BLM officials say they can't disclose who nominates parcels until after the sale occurs.

Industry officials have speculated it could be an individual or small company looking to make a new discovery, or possibly to beef up lease holdings to make its reserves look better on paper.

Bruce Collins, public affairs manager for the BLM's Rawlins and Lander field offices, said the agency can only base its decision on whether to lease certain parcels on considerations of multiple use in a particular resource area.

Resource management plans do include "high" to "low" oil and gas development scenarios. But it's not up to the BLM to decide whether it would make economic sense to drill for potential reserves.

"The economics (of developing a lease) is for someone to decide who is in the business," Collins said.

Shoring up years of gas

Although some in the industry suggest that filing protests against proposed oil and gas leasing has become a reflex among some groups, there doesn't appear to be a trend toward building opposition.

Of the BLM's 25 most recent oil and gas sales in Wyoming dating back to June 2003, only two other sales drew more than 10 protests, according to data supplied by the BLM.

Those included parcels in the Wyoming Range in 2006, and parcels that were mistakenly listed in February's lease sale.

Wyoming's natural gas producers have increased export volumes an average of 6.4 percent annually for the past 10 years, according to the Wyoming Oil and Gas Conservation Commission. With ballooning production from Colorado and Utah, the producers in the region have outpaced the construction of interstate pipelines to take the commodity to market.

At the same time, the industry's average rate of production from each well has declined, which means it takes more wells to produce the same amount of gas. Put that in contrast with the fact that the industry plans to continue increasing total production, and you have an exponentially growing presence on the landscape.

The BLM's advantage regarding the Upper North Platte Valley is that its decision to pull the 13 controversial leases comes at a time when the agency is still in the planning stage of deciding where oil and gas can be considered.

Though some industry officials have their doubts about the potential for commercial reserves in the particular area, some say it's not up to the BLM to make that decision. Even if areas do not hold great potential for development, they should be available so long as the BLM hasn't determined they should be off the table due to other resource considerations, according to Jimmy Goolsby of Casper-based Goolsby, Finley & Associates.

"We need to do more drilling in areas where we haven't drilled in the past," said Goolsby, whose firm specializes in energy consulting.

Goolsby explained that since a Reagan-era tax change in the 1980s, the oil and gas industry has been less willing to gamble on unproven areas because companies can't recover nearly as much of their investment if they hit dry holes.

"Companies want to know they are going to have a certain rate of return. So they go after what's known, and what's known has poorer and poorer reservoir quality," Goolsby said.

Energy reporter Dustin Bleizeffer can be reached at (307) 577-6069 or dustin.bleizeffer@trib.com.