Feb. 4 (Bloomberg) -- Interior Secretary Ken Salazar said he is nullifying oil and natural gas drilling leases on about 130,000 acres in Utah because they are near national parks and questions have been raised about environmental reviews.

“Those are American iconic treasures we need to make sure are being protected,” Salazar said on a conference call with reporters today. He also said the environmental review process “was not complete.”

The government will forgo $6 million of $7.5 million in bids on the leases from a Dec. 19 auction, Salazar said. The directive today, affecting 77 of the 116 leases sold, are for areas near Dinosaur National Monument and Arches and Canyonlands national parks.

The auction was disrupted by a student opposed to oil and gas development. The student, Tim DeChristopher, bid on some parcels and ended up winning $1.7 million in leases. The sale had also been challenged in court by the Sierra Club, the Natural Resources Defense Council and the Wilderness Society.

Salazar declined to comment on DeChristopher’s status, saying the U.S. Attorney’s Office is reviewing the matter.

“I see this announcement as a sign that after eight long years of rapacious greed and backdoor dealings, our government is returning a sense of balance to the way it manages our lands,” actor and director Robert Redford, a trustee for the Natural Resources Defense Council, said in a statement.

An oil industry group said canceling the sale would undermine the Obama administration’s goals for energy, the environment and the economy.

Limiting Development

“We wonder why the administration is implementing policies that will limit economic development in the West, decrease energy security and make addressing climate change even more difficult,” Kathleen Sgamma, director of government affairs for the Independent Petroleum Association of Mountain States, said in a statement.

Salazar said some portion of the leases being withdrawn today could eventually go back on the auction block.

“I don’t necessarily believe that all of these 77 parcels won’t go into oil and gas development at some time in the future,” Salazar said.

The environmental groups say they will continue their court case to challenge the resource management plan that spurred the December lease sale, as well as future leases for the area.

Resource management plans generally span 15 to 20 years, Sharon Buccino, senior attorney for the Natural Resources Defense Council, said in a telephone interview. Another lease sale is coming up in Utah next month, she said.

“We can find ways in which development can move forward,” said Salazar. “We will make sure we’re providing appropriate protection and mitigation.”

To contact the reporters on this story: Daniel Whitten in Washington at dwhitten2@bloomberg.net; Tina Seeley in Washington at tseeley@bloomberg.net.

Last Updated: February 4, 2009 16:01 EST