BUFFALO -- Coal-bed methane development plans of more than one well per 500 acres will be shelved in certain areas of the Powder River Basin for the next two years, according to federal land regulators.

Federal officials are drawing boundaries over large blocks of areas spanning the industry's "fairway" down the center of the basin between Gillette, Buffalo and Sheridan where the temporary limitations will be enforced beginning this summer.

"The oil and gas (industry) is certainly the most significant issue in terms of people, jobs and money," said Bureau of Land Management Buffalo field office manager Chris Hanson.

Grazing, recreation and other land uses could also be limited.

Hanson and other federal land managers faced a hostile crowd of more than 300 coal-bed methane workers and landowners here Wednesday as they laid out a sage grouse planning process that will shelve numerous pending developments and likely lead to layoffs in the industry.

Under the BLM's oversight, coal-bed methane development in the Powder River Basin has failed to protect the local sage grouse population, according to Hanson. If the industry is allowed to continue its current practices, it threatens to "extirpate" -- or exterminate -- a sage grouse population with important genetic linkages to other sage grouse populations in Wyoming and Montana.

In response, the office will prepare an amendment to its resource plan -- about a two-year process -- to modify its guidance of all land uses to better preserve sage grouse habitat. Hanson said that during the two-year interim planning process, the BLM cannot permit actions that might compromise the land use strategies that may result from the amendment process.

As a result, Buffalo field office managers are drawing boundaries for "interim management areas." These are areas where coal-bed methane development and all other activities may be "shelved" beginning this summer.

However, Hanson has refused to provide copies of the map. The boundaries may change in the next few weeks based on information provided to the agency about existing and planned facilities, he said. The map should be finalized by the end of June, and the interim limitations will likely go into effect this summer.

"Operators with pending APDs (applications for permit to drill), we'll let you know what the standing is, whether they go on the shelf or if we continue to process them," Hanson said.

He said if the interim limitations on industry seem restrictive, a listing of the sage grouse under the Endangered Species Act would be worse. The U.S. Fish and Wildlife Service has been ordered to reconsider its 2005 decision that the greater sage grouse didn't warrant consideration under the act, based on evidence that the scientific research of the chicken-sized bird was downplayed.

Hanson said the current legal and scientific national dialogue about the grouse is a driving factor in his office's current actions.

"The Powder River Basin is on the forefront of the issue because of science and the courts. And at the same time we have a lot of activity on the ground. Hence forward, the decisions we make are paramount," Hanson said.

Hanson stressed that the new land restrictions regarding sage grouse will affect all land and resource users. He said the BLM will respond to fires in certain areas "more proactively."

Hanson said his management team had already decided that pending coal-bed methane development plans more dense than one well per 500 acres would be shelved in the "interim management areas."

Many industry members in attendance responded with unmuffled cursing and made declarations that the peer-reviewed science the BLM is basing its current actions on must be flawed. Several attendees said they assumed that the 2003 Powder River Oil and Gas Project record of decision set in stone for the agency how it could manage the industry in regard to sage grouse.

But in fact, federal land managers committed to an "adaptive management" approach to coal-bed methane development in the 2003 planning document. Hanson said the agency also committed to not managing activities in a way that would push the sage grouse closer to an endangered species listing.

"We're finding some of those assumptions may not have been as valid as we'd hoped," Hanson said.

The most up-to-date peer-reviewed research indicates large habitat blocs are necessary for grouse conservation, according to BLM officials. The BLM Buffalo field office to date has only considered protecting breeding grounds and nesting habitat within a 2-mile radius of development activities during certain times of the year.

"But new information suggests we have to look at habitats beyond two miles," Hanson said. "We're looking at corridors and connectivity. These (protected habitats) can't be isolated 40 acres here and there."

The impact of West Nile virus on sage grouse was little understood in 2003. But ongoing monitoring suggests it is a major concern for the Powder River Basin population, according to the BLM.

Ben Lamb, the Montana Wildlife Federation's director for state and national issues, said he was concerned that the oil and gas industry already has "insider dealings" with the BLM on the sage grouse issue in the Powder River Basin.

"As hunters and anglers, we recognize the need to produce energy," Lamb said in a press release. "But the voice of Montana's sportsmen should never be excluded when decisions impacting important wildlife habitat are discussed."

He said ranchers, farmers and sportsmen seem to have taken a back seat to ongoing discussions within the BLM regarding sage grouse.

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