Barrett Corp: Banning Roan-top drilling effectively voids leases

Trying to develop oil and gas reserves beneath the top of the Roan Plateau through directional drilling from the surrounding base wouldn’t work, and requiring it, in effect, would invalidate an energy company’s leases, the company is arguing in court.

Bill Barrett Corp. (BBC) has made a court filing explaining the basis of its appeal of a ruling this summer. Barrett says it seeks to challenge a judge’s finding that the Bureau of Land Management didn’t adequately explain its decision not to analyze in detail the idea of requiring the directional drilling approach to protect the plateau top.

The company contends that the BLM’s “underlying administrative record documented this proposed alternative as being entirely technically and economically feasible,” it says in the recent filing.

Indeed, if the 10th Circuit Court of Appeals refuses to immediately consider its appeal and the BLM decides to adopt the directional drilling alternative, “then BLM would effectively be voiding BBC’s leases because BBC would not be able to access and develop its leases ... resulting in a loss of real property interests and irreparable economic harm to the company,” it says.

The Denver-based company makes its case in a response to a request by the appeals court for arguments on whether it has jurisdiction to hear immediate appeals in the case.

In June, ruling in a lawsuit brought by conservation groups, U.S. District Court Judge Marcia Krieger set aside the BLM’s plan leading to the 2008 leasing of some 55,000 acres on and around the plateau near Rifle for oil and gas development.

She remanded the matter back to the agency for further action and raised questions not only about the directional drilling alternative, but the adequacy of the BLM’s air quality, and specifically ozone impact, reviews.

Barrett owns some 40,000 acres of affected leases, including all the plateau-top acreage that conservationists have particularly targeted for protection.

Antero Resources, WPX Energy and OXY USA, which hold the rest of the acreage leased in 2008, back Barrett’s contention that the appeals court should hear the case.

But the BLM and conservation groups argue that the appeals court lacks jurisdiction.

Conservationists note in their own filing that the appeals court previously has held that when a district court sends a matter back to an agency for more proceedings, that’s generally considered a non-final decision and not subject to immediate appeal.

“The goal of this general rule is ‘to avoid the waste and confusion engendered by piecemeal review of cases,’” conservation attorneys note, quoting a past 10th Circuit ruling.

A filing by a Department of Justice attorney questions proceeding with an appeal when the lawsuit was filed against the BLM, not the energy companies, and it has decided not to appeal.

While conservationists consider Krieger’s ruling an overall victory, after BBC appealed they decided to cross-appeal. They disagree with Krieger’s finding that the BLM was bound by congressional legislation to lease “some meaningful part” of the plateau, but say they can pursue that issue later if they choose to challenge the BLM’s subsequent, revised Roan decision.


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