The U.S. Department of the Interior Thursday ordered an air quality review for the area around 77 controversial oil and gas leases in Utah, saying some may ultimately be developed, but others would need "extensive" review.

The announcement is likely to be mixed news for the oil industry, reviving hopes for access in the area, but also further delaying exploration. It's also emblematic of the difficulties the Obama administration is facing in its efforts to slow domestic oil and gas development while the public has urged new access on the back of high prices.

Earlier this year, the Interior Department canceled a late 2008, Bush administration deal on 77 leases to drill for oil and gas in wilderness areas of Utah after environmental groups protested against development, saying Interior had failed to adequately conduct the required environmental and cultural assessments.

In the face of a showdown with Senate lawmakers, however, Interior Secretary Ken Salazar later acquiesced, ordering Deputy Secretary David Hayes to review the program.

Following the Hayes report published Thursday, the Department ordered a comprehensive air quality strategy for the region, and told the Bureau of Land Management to conduct a final decision-making review of the 77 blocks.

Some of the parcels in areas with existing oil and gas development "may be appropriate for development after a final review," Interior said. "Other parcels in and near sensitive landscapes will require a more extensive, site-specific review," the agency added.

"This report helps us unwind the problems that landed these 77 parcels in court with a temporary injunction," Salazar said in a statement. "It is clear that in the rush to sell the leases, the previous Administration bypassed normal reviews and consultations with the National Park Service," he said, adding that many of them were near national parks.

Hayes' report says some of the parcels that the BLM deems appropriate to lease after a new review could be given back to the original winning bidders. Fourteen blocks are within existing oil and gas infrastructure, and 16 blocks are in areas that aren't "near particularly sensitive landscapes." The remainder require more detailed site-specific analysis, the report said.

Although there didn't appear to be a deadline for completion of the air quality study, the report said development on some of the leases may be able to move forward.

According to BLM statistics on the December 2008 lease sale, Delta Petroleum Corp. (DPTR) and Pioneer Oil & Gas (POGS) would be two of the companies most affected by Interior's decision.

- By Ian Talley, Dow Jones Newswires; (202) 862 9285; ian.talley@dowjones.com;