Posted on April 2, 2010 by James Spaanstra
Robert D. Comer
James R. Spaanstra
Recently, the Bureau of Land Management (“BLM”) and several Montana environmental groups agreed to suspend 61 Montana oil and gas leases as settlement of a case challenging lease issuance for failure to consider climate change effects. The leases, which had been issued, were suspended while BLM conducts additional analysis of greenhouse gas fugitive emissions and climate change impacts under the National Environmental Policy Act. As part of the settlement, BLM also asserts “authority to void or terminate any lease, if it determines upon review that such an action is appropriate.
On March 18, 2010, Judge Molloy of the United States District Court for the District of Montana entered an order dismissing the case based on the settlement agreement, despite the absence of the oil and gas industry from the settlement discussions. BLM and the environmentalist parties are seeking to keep confidential the deliberations that led to the settlement. This stands in contrast to prior positions taken by the United States regarding the release of settlement discussion documents under the Freedom of Information Act (FOIA) pursuant to the U.S. Supreme Court Klamath decision in 2000.
Unlike the 77 Utah leases that were voided by BLM in 2009, the agency did not admit to error in the NEPA process leading to issuance of the leases. The takeaway from these BLM actions is to make sure that your company has solid NEPA analysis that fully considers climate change and greenhouse gas issues, including those resulting from production and gathering operation fugitive emissions, when applying for leases and APDs. The willingness to suspend or void leases represents a new chapter in available remedies BLM is willing to use, whereby even already issued leases may now be at risk. Click here to review the settlement and click here to review the order.