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CHEYENNE, Wyo. - Gov. Dave Freudenthal says he's encouraged that the Bureau of Land Management will focus its efforts to protect sage grouse on between 200,000 and 400,000 acres of crucial sage grouse habitat the state has identified in the Powder River Basin.

Donald Simpson, acting director of the BLM in Wyoming, wrote to Freudenthal on Thursday saying that the BLM plans to incorporate the state's strategy of protecting the birds in core strategic areas while continuing to allow oil and gas production in the Powder River Basin.

The U.S. Fish and Wildlife Service, under orders from a federal judge in Idaho, is considering whether sage grouse deserve protection under the federal Endangered Species Act. The bird exists in Wyoming and 10 other Western states, but scientists say the bird's population has plummeted in the face of recent energy development.

In Wyoming, a Sage Grouse Implementation Team appointed by Freudenthal recommended in March that efforts to protect the birds in the Powder River Basin should focus on "core population areas" of between 200,000 to 400,000 acres. The Fish and Wildlife Service told the state last month it agrees with that approach.

Simpson, in his letter to the governor, stated that it also seems appropriate for the BLM to focus its management strategy on the state's proposed core areas.

"This allows us to preserve sufficient sage-grouse habitat, secure adequate decision space for our future (Buffalo Resource Management Plan) modification, and begin processing permits no later than mid-July," Simpson wrote.

In response, Freudenthal issued a statement on Thursday: "Wyoming is home to robust sage grouse populations and habitats that just happen to overlay world class oil and gas, uranium, grazing, wind and other resources," the governor said. "Our challenge is to protect sage grouse and other values while we meet the nation's energy needs and protect the interests of landowners."

An official with the BLM's Buffalo office said last month that the agency was considering shelving plans for some coal-bed methane development in the Powder River Basin as it worked on new rules aimed at protecting sage grouse.

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Simpson, in his letter to Freudenthal, states that he's aware of rumors that the BLM is not processing drilling permits and has imposed a moratorium. "This is incorrect," Simpson wrote, "the BLM is processing drilling permits."

Teresa Howes, spokeswoman for the BLM in Cheyenne, said Thursday that the agency is gathering information from energy industry officials while continuing to process drilling permits.

"What we're doing is we're working with industry, we're working with the governor's information," Howes said. "And if there comes a point, and there may, where we can't make modifications, there may be some point where we're unable to process the permits."

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