Sage-Grouse Opens Door for Interior Oil-Gas Leasing ‘Drop Out’

Sept. 9, 2021, 10:01 AM

Conservation concerns—including protecting the greater sage-grouse—are avenues that the Biden administration are expected to use to sidestep making good on its plan to lease a Rhode Island-sized swath of land to oil and gas drillers.

“The safer political bet is to propose lots of acres and then allow those acres to drop out as the process moves forward,” said Susan Jane Brown, a staff attorney at the Western Environmental Law Center, a nonprofit legal group.

The Interior Department’s Bureau of Land Management in August proposed auctioning roughly 750,000 acres of mostly federal land in nine states to oil and gas developers during lease sales scheduled for February and March 2022. The sales were announced in August to comply with a Louisiana federal court’s preliminary injunction against the White House’s leasing “pause.”

But with Interior conducting a public feedback process and possibly an environmental review of the proposed acres, “I’m not sure I’d count on any of those lease sales actually happening just yet,” said Kevin Book, managing director of energy analysis firm ClearView Energy Partners LLC.

The greater sage-grouse may be key to whether the bulk of the leases go on the auction block.

The largest chunks of land scheduled for sale—nearly double the land area of Los Angeles—are in Wyoming, where environmental groups say drilling will encroach on habitat for the chicken-sized bird. States have tried protecting the sage-grouse to prevent it from needing Endangered Species Act protections that would curtail oil and gas drilling.

Most of the proposed leases are carry overs from sales arranged by the Trump administration that were canceled when President Joe Biden ordered the pause in January.

Courts Want Closer Look

But environmentalists say the proposed leases were included in the lease sales based on the Trump administration’s environmental analyses of the parcels, which may be insufficient to account for sage-grouse conflicts.

“The unfettered leasing under the Trump administration really encumbered a lot of sage-grouse habitat,” said Jeremy Nichols, director of the WildEarth Guardians energy program.

Interior is poised to repeat the Trump-era inadequate environmental analysis, and its leasing proposal is indefensible, Nichols said.

Courts have ruled repeatedly that lease sales conducted by the Trump administration failed to adequately account for environmental impacts, including effects on the greater sage-grouse.

Most recently, an Idaho federal judge in June barred Interior from issuing any new land-disturbing drilling activities in sage-grouse habitat before it conducts a more rigorous environmental analysis of how oil and gas will affect the bird.

The order casts doubt on Interior’s willingness to follow-through with including proposed Wyoming and Montana leases in the 2022 lease sales, said Pat Parenteau, an environmental law professor at Vermont Law School.

“I can’t believe BLM is going to repeat the same mistakes and issue more leases in GSG habitat without more analysis of impacts on the bird and alternatives to minimize loss of habitat,” Parenteau said in an email.

Industry Confident

Wyoming’s oil and gas industry is confident that its drilling practices are compatible with sage-grouse protection, said Ryan McConnaughey, communications director for the Petroleum Association of Wyoming.

“Wyoming has a strong history of working across government, industry, agriculture and the NGO community to protect sage-grouse and its habitat,” he said, adding that oil and gas operations comply with Wyoming regulations designed to safeguard the bird.

The land bureau may not offer all the proposed leases in a sale, and the public will have ample opportunity to request parcels to be removed, McConnaughey said.

The extent to which the land bureau will review the proposed lease parcels for sage-grouse conflicts is unclear. The Interior Department declined to comment Wednesday, pointing to its Aug. 24 statement that the land bureau will conduct environmental reviews on parcels proposed for leasing.

However, bureau news releases say the agency won’t re-evaluate lands that had been deferred from canceled lease sales planned during the Trump administration.

Stalling Tactics

The fate of the proposed 2022 lease sales is especially unclear because of the politics involved, Book said.

“I think the environmental critics of this move to sell leases are overlooking the realities at hand,” he said. “The optics are terrible. When you ask, ‘Can the Biden administration accommodate an agenda of environmental absolutism when they have such a thin and precarious political majority?’ the answer is no, they cannot.”

But the administration eventually can follow through on some its agenda to curtail oil and gas leasing by proposing to boost land rents and royalty rates while using environmental analyses to stall leasing, Book said.

“There’s a lot of time between now and February,” he said. “If the sales are found to be based on a flawed leasing process and a flawed land-management protocol, they may need to say they need to stop and review and come back again.”

A public comment period on the lease sales closes at the end of September. Interior is expected to publish its environmental reviews of the potential leases in October, followed by seven state-level federal lease sales in early 2022.

To contact the reporter on this story: Bobby Magill at bmagill@bloombergindustry.com

To contact the editors responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com; Rebecca Baker at rbaker@bloombergindustry.com

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