Winning bidders sue for leases

Energy industry representatives sued the federal government Monday, claiming the Department of Interior is breaking the law by failing to issue oil and gas leases to winning bidders within 60 days of being paid.

One of the plaintiffs, the Denver-based Western Energy Alliance trade group, said it also plans to sue within a few days over a new Bureau of Land Management policy that limits the use of categorical exclusions, which exempt some oil and gas operations from certain environmental reviews.

The Western Energy Alliance said the lawsuit Monday involves 118 Wyoming and Utah leases worth more than $4.5 million, which the BLM has refused to issue because of ongoing protests. The leases date to 2005.

The group said the BLM continues to hold more than $100 million worth of leases in a nonproductive capacity.

“There aren’t too many auctions … I’m aware of where the seller can decide not to provide the good or service that was purchased. You don’t go on eBay and buy something and then have to wait two years for your merchandise,” said Kathleen Sgamma, director of government affairs for the Western Energy Alliance.

Sgamma said her group also will be legally challenging the Interior Department decision in May to rewrite two of five criteria for using categorical exclusions. She said the changes directly contradict the 2005 energy law that spelled out when such exclusions should be granted.

“The bottom line on all of this is the Department of Interior is preventing job creation and economic activity in rural areas across the West and placing the region at a competitive disadvantage with others,” she said.

Interior Department spokeswoman Kendra Barkoff said she could not comment about litigation against the agency.

Mike Chiropolos, lands program official with the Western Resource Advocates conservation group, said the government is legally obligated to provide adequate environmental protections when it does oil and gas leasing. Protests result from actions such as offering leases in sage grouse habitat in Wyoming “despite everyone knowing they’re increasingly threatened,” he said.

Chiropolos said leasing reforms being instituted by Interior Secretary Ken Salazar should ensure that more review takes place before leasing occurs, reducing the number of protests.

Dave Alberswerth, a senior policy adviser for the Wilderness Society, said that in the case of categorical exclusions, although Congress enumerated ways they should be granted, industry isn’t automatically entitled to them.

Chiropolos said the exclusions are appropriate only where environmental review occurs elsewhere in the planning process for the drilling in question.

“Better-informed decisions are less likely to have unintended consequences which are bad for everybody,” he said.


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