A federal judge in Wyoming yesterday said the government must not delay decisions over whether to issue oil and gas leases in the West but that the Interior Department may refuse to issue leases even after a company has submitted a winning bid.
The 18-page ruling by U.S. District Judge Nancy Freudenthal in Cheyenne was claimed as a partial victory by both industry and conservation groups that have butted heads over where and how companies should be allowed to drill for oil and gas on public lands.
The Western Energy Alliance (WEA) last fall claimed Interior's Bureau of Land Management was illegally delaying the issuance of 118 leases sold between 2002 and 2005 but not yet issued, arguing the Mineral Leasing Act requires leases be issued within 60 days of a winning bid.
While Freudenthal agreed a decision must be made within 60 days, she said Interior is under no obligation to issue leases if they would harm public lands or the integrity of BLM's mineral leasing program. She ordered Interior to make a decision on the 47 remaining leases in the case -- nine in Wyoming and 38 in Utah -- within a month.
"There is no claim or vested right to lease issuance which is automatically gained simply because of payments made by the highest qualified responsible bidder," Freudenthal wrote. "However, this does not resolve the important and persuasive argument advanced by the energy companies that the sixty-day provision interjected within [federal law] must mean something."
Kathleen Sgamma, WEA's director of government and public affairs, said Freudenthal's decision was a "victory" for the plaintiffs.
"But it didn't go as far as we'd hoped," Sgamma said. "She was not willing to order the government to abide by the plain language of the Mineral Leasing Act."
The ruling was important because it will prevent BLM from dragging its feet on leasing decisions, which in recent years has led to a backlog of 1,500 leases in places like Wyoming, she said.
While the backlog is mostly cleared, it stranded roughly $100 million in bonus bids and stifled domestic development, industry has argued.
Conservation groups said the ruling recognizes Interior's discretion to consider protests brought by hunting and conservation groups and local governments asking BLM to reconsider its decision to make certain parcels available for sale.
"The judge rejected [plaintiffs'] position that BLM must 'lease first, think later,'" said Stephen Bloch, an attorney for the Southern Utah Wilderness Alliance. "The judge held that the BLM must decide whether or not to issue a lease sold at auction [within] 60 days of the sale. This is consistent with [Interior Secretary Ken] Salazar's oil and gas reforms, which are aiming for more certainty in the oil and gas lease sale process."
Freudenthal said BLM must issue decisions on whether lands are to be leased within 60 days of when a lease is paid for by the top qualified competitive bidder, unless the bidder waives this deadline.
"Until the secretary acts to issue the lease, the applicant has only a 'hope or expectation of a lease,' and not a vested right," she said.
Click here to read the ruling.