The Obama administration initiated reforms to make the oil and gas leasing process on public lands work better for industry, government, taxpayers, and wildlife. The reforms have received praise and demonstrated results – environmental groups have filed fewer objections to leases in response to this more transparent process. The reforms have also ensured full environmental reviews that examine the risks to wildlife and provide for mitigation measures whenever potential impacts are present or when previous environmental analysis has not been completed on a site.
Energy industry groups, however, have challenged the reforms from the beginning. Reversing the reforms would mean a return to a closed system in which companies select public land acres they want to lease for drilling and proceed to development with almost no transparency, out of reach from members of the public that want to ensure wildlife, water, air quality and other concerns are fully incorporated into decision making.
Last week, at the request of an energy industry trade group, a Federal Judge in Wyoming vacated a segment of these leasing reforms. The Western Energy Alliance sued the Department of the Interior over Secretary Salazar’s Instruction Memorandum 2010-118 clarifying the use of categorical exclusions (CX’s), which exempt certain activities from environmental review. This memorandum is important because it responds to deep concerns about the misuse of categorical exclusions to fast-track oil and gas development projects on public lands without adequate environmental or public review. IM 2010-118 resolved long-standing issues (highlighted by the GAO) by making the following changes:
1. BLM would evaluate whether “extraordinary circumstances” were present that precluded use of the CXs to skip environmental review;
2. BLM would require environmental analysis prior to permitting new drilling at a site where drilling had occurred, but might not have been analyzed before;
3. BLM would require specific analysis of place-based development before permitting new drilling at a site that was part of a larger field (previously not required).
The judge’s decision to vacate these three targeted reforms found that the BLM’s process for changing its position on CXs was not correct – it did not find that the changes themselves were illegal or wrong. Industry spokespeople, however, have already tried to use this ruling as proof that leasing reforms should be thrown out or ignored. This is an incorrect interpretation of this narrow ruling.
The ruling expressed no opinion on the merits of the agency’s policies to ensure that oil and gas drilling will not proceed without necessary environmental analysis. The court’s decision means BLM cannot rely on its 2010 guidance right now, but it does not require BLM to return to a practice of endangering our wildlife and natural resources to permit drilling without any common sense limitations. The BLM retains ultimate discretion over both deciding what lands should be leased for drilling and if, how, and when they should be drilled – and the agency can and should continue to exercise its authority wisely.