After getting what amounts to a loud raspberry from industry, the Interior Department's Bureau of Land Management has backed off--but not abandoned -- a controversial proposal to let applicants for federal oil and gas leases prepare their own environmental assessments.

In a Federal Register notice yesterday, the agency said it "will not require or actively encourage" lease applicants to do their own environmental analyses, but it will leave that option open if somebody is interested.

BLM floated the proposal last summer as a way to speed the leasing process, open more lands to oil and gas development and decrease its "analytical workload," all in the spirit of turning government tasks over to the private sector. But the oil and gas industry saw the do-it-yourself proposal as a horse of an entirely different color -- mostly green.

"Although the proposal is offered as a 'streamlining' effort, we see it principally as a shift in who pays the bills," Texaco Inc. responded in written comments to the agency.

Under the National Environmental Policy Act, federal agencies must weigh environmental factors before taking any action that could adversely affect the environment. In cases involving major actions, a full-blown environmental impact statement might be required. All that takes time, not to mention money.

Conoco worried that a lease applicant "could be required to expose a considerable sum of money with no hope of any real return" if an EIS turned up a significant adverse effect. Representatives of independent oil and gas developers complained that the potential costs would drive many small operators out of business.

Companies of all sizes expressed concern that any environmental study done in their shop, rather than BLM's, would be subject to endless court challenges on grounds of bias.

Oil companies also questioned whether BLM had the statutory authority to transfer responsibility for the environmental studies and, getting right to the bottom line, whether transferring responsibility would save any time.

"It is not appropriate for the BLM to shift the cost and obligation of environmental analyses from the federal government to the private sector," an official from Champlin Petroleum Co. wrote. Atlantic Richfield Co. told the agency that the "current arms-length relationship . . .is a more expedient, cost-effective and less troublesome mechanism."

Only two environmental groups responded to BLM's invitation for comments, and both were skeptical of the idea of letting the fox, as it were, count noses in the hen house. The National Wildlife Federation said that "human nature raises the possibility that the applicant or his contractor would make a determination in favor of the applicant's own interest."

The Conservation Council of North Carolina was a little more direct. "If the applicant does bear the costs, how can the bureau realistically expect the contractor to remain disinterested?" it wrote. "By reading to him or her from the Bible?"

BLM's decision to leave the option open did not satisfy the environmentalists entirely. "Many of our concerns would still exist," said Tom Lustig, who filed the National Wildlife Federation's comment. He noted that BLM would still have the right to review and reject a company's environmental assessment, but added, "Even if they have the best of intentions, do they have the manpower?"

Meanwhile, BLM's motion did not go without a second.

The president of an environmental consulting firm in San Francisco told the agency, "I see no reason why an applicant should not pay for a consultant-prepared environmental assessment . . . . I recommend that you require all environmental documents to be consultant-prepared."