OIL AND GAS

Tribe, enviros relish victory as Interior nixes lease

Blackfeet tribal Chairman Harry Barnes wants to savor the moment.

After years of conflict over oil and gas development in an area the Blackfeet consider sacred, Barnes got his wish: Yesterday, the Obama administration canceled the area's most contentious oil and gas lease. And while a broader battle over drilling in the Montana region continues, the chairman says now is a time for celebration.

"Today, we won," he said after the Interior Department's announcement. "We relish that moment, and we'll deal with tomorrow tomorrow."

That moment -- Interior's cancellation of Solenex LLC's undeveloped lease in the Badger-Two Medicine area of Lewis and Clark National Forest -- was more than three decades in the making. Interior first issued the 6,200-acre lease in 1982 without in-depth environmental review. Tribes and environmentalists challenged subsequent drilling permits, and the lease has been suspended ever since.

Interior and the Forest Service waffled on a decision for years until Solenex sued and a federal judge this week forced Interior to make a final decision. Interior Secretary Sally Jewell responded by canceling the lease, saying it was issued without proper environmental or cultural review (Greenwire, March 17).

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"This is the right action to take on behalf of current and future generations," she said in a statement. "Today's action honors Badger-Two Medicine's rich cultural and natural resources and recognizes the irreparable impacts that oil and gas development would have on them."

Barnes, who said he is not opposed to oil and gas development generally, said nixing Solenex's lease was crucial to protecting an area held close by both the Blackfeet and the state.

"There's a lot of celebrating going on back in Montana right now," said Barnes, who was meeting with lawmakers in Washington, D.C., this week. "It's a very special, unique place to the Blackfeet, but really to all the citizens of Montana."

The decision elicited a cascade of praise from environmental groups, tribal advocates and their allies. Jacqueline Pata, executive director of the National Congress of American Indians, called Interior's move "a major victory in the tribe's 34 year struggle to protect this sacred place." National Parks Conservation Association President and CEO Theresa Pierno touted the added protection of nearby Glacier National Park.

"This pristine landscape is home not only to the Blackfeet culture's origin stories, but also some of our country's most iconic wildlife -- grizzly bears, wolves, wolverines, and bald eagles," she said in a statement. "This decision heeds the call of the many individuals who raised their voices in unison, calling for permanent protection of the Badger-Two Medicine."

Sen. Jon Tester (D-Mont.), the lone member of Montana's congressional delegation to support the lease cancellation, called the decision an acknowledgement that some places are too special to drill.

"The Badger-Two Medicine has unique cultural, historical, spiritual, and recreational significance to the Blackfeet Nation and outdoor enthusiasts in Montana," he said in a statement. "For generations Blackfeet families and outdoorsmen have enjoyed this treasured place and today's decision will help ensure that this area remains pristine for years to come. There are special places in this world where we just shouldn't drill, and the Badger-Two Medicine is one of them."

Over the past year, the Advisory Council on Historic Preservation and Agriculture Secretary Tom Vilsack, who oversees the Forest Service, have recommended that the lease be canceled.

'Winner-takes-all'

On the other side of the battle, industry advocates are railing against the lease cancellation, calling it unfair and unwarranted.

"It's a sad day in the United States when a government agency can unilaterally cancel a paid mineral lease especially after numerous approved exploration permits had previously been issued," Montana Petroleum Association Executive Director Alan Olson said in a statement. "The current federal administration is going out of their way to decimate the natural resources industries in this state as well as the nation."

Attorneys from the Mountain States Legal Foundation, which is representing Solenex, did not respond to requests for comment and have not indicated whether they will challenge Interior's decision. Vice President and Chief Legal Officer Steven Lechner has previously argued that Interior lacks authority to cancel the lease because the company has never violated any provisions. His argument is part of a broader debate over the extent of Interior's power to change its mind on already-issued leases (EnergyWire, Feb. 19).

The Western Energy Alliance's Kathleen Sgamma told EnergyWire in an email that Interior's decision fails to account for the numerous environmental and cultural studies conducted in the 1980s and early '90s -- mostly following the challenge to the initial application for a permit to drill (APD).

"It's probably the most studied APD in history," she said. "In fact, if BLM had allowed Solenex to move forward in the early 1990s, the well might even have finished producing by this time and the small well pad completely reclaimed to its previous condition."

Interior's decision letter notes that the agency will pay Solenex $31,235 to cover lease payments made between 1982 and 1985, when the lease was suspended. Sgamma dismissed the refund as a paltry attempt to make up for the company's years of investment.

"Instead, BLM has denied the private property rights of a small business for over three decades, tying up the company's investment which cannot be fully recouped by refunding just the lease payments," she said.

According to Michael Jamison, who coordinates NPCA's Crown of the Continents program, Solenex was offered "orders of magnitude more than that" during settlement negotiations among industry, environmentalists and tribal advocates. Jamison said he understood industry's frustration and wished a settlement could have been reached.

"It's not a clean end; it's sort of winner-takes-all politics," he said. "A negotiated settlement would have been far superior to pursuing cancellation [through litigation]. That requires willing participants to negotiate reasonably to find common ground."

'Fight is not yet over'

More negotiations between industry and opponents of drilling in the Badger-Two Medicine area may be on the horizon.

Earthjustice attorney Aurora Janke noted that the Solenex lease is only one of several in the area, and environmental groups will continue to pressure Interior to cancel the remaining leases, which have also been suspended for decades.

"We absolutely intend to continue fighting for the Badger-Two Medicine area," she said yesterday. "The fight is not yet over."

Though Interior has not yet signaled any plans for the 18 other suspended leases -- which represent 34,000 acres -- Jamison noted that they were issued alongside the Solenex lease, under the same inadequate review processes.

"All of these leases in the Badger-Two Medicine were issued under the same template," he said. "If you make the assertion that these 6,000 acres held by Solenex were leased illegally, you have to acknowledge then that the remaining leases likewise were leased illegally."

Jamison added that he hopes the various groups can negotiate a settlement that compensates leaseholders while moving them out of sensitive areas.

"The legal history and the legal underpinnings of the rationale behind today's decision do suggest that we'll be having future conversations," he said. "I believe it may still be possible to reach some sort of a settlement with the remaining leaseholders."

Twitter: @ellengilmer Email: egilmer@eenews.net

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