HUNTLEY -- Fighting wildfires will continue to cost the government a billion dollars or more annually as more houses are built in wooded, rural areas, the nation's top forestry official said Wednesday.

Agriculture Undersecretary Mark Rey said 8.4 million houses were built in wildfire-prone areas during the 1990s, complicating firefighting efforts and driving costs to a record $1.4 billion last year.

"You can't say that's made fire seasons more severe, but you can say unequivocally that it's made firefighting more expensive," Rey said.

Rey's comments came while touring a ranch near a rural subdivision where three houses were lost in fires over the past year.

Federal firefighting efforts this year already have topped $800 million on burns totaling more than 10,100 square miles -- with two months to go before the end of fire season.

A recent shift in strategy has seen the government let some fires burn if they are not threatening houses or other property. That was meant to save money and reduce risks for firefighters.

But Rey said the rural building boom precludes any cost savings, as fires are more likely to endanger houses. Only an end to almost a decade of drought conditions across much of the West would lower costs significantly, he said.

Rey was visiting Montana to promote the Bush administration's version of a farm bill pending in Congress that includes money for fire restoration programs.

He also announced his agency was nearing completion of a deal to buy a 14,000-acre conservation easement from a Custer County ranch. The easement would keep the property as rangeland that cannot be developed. Officials described it as the largest purchase to date under the five-year-old Grassland Reserve Program.

The visit came just four days after U.S. District Judge Donald Molloy in Missoula threatened to hold him in contempt of court over the U.S. Forest Service's failure to analyze the environmental impacts of fish-killing fire retardant used to suppress wildfires.

An environmental group sued the agency over the issue in 2003, after more than 20,000 fish were killed by retardant dropped over an Oregon creek.