Judge Orders “Accelerated” Review of Long-Disputed Montana Oil and Gas Leases

On July 27, 2015, U.S. District Judge Richard Leon ordered the BLM to develop an “accelerated schedule” within the next 21 days to be used to decide whether to authorize development of 18 federal oil and gas leases that were originally issued in 1982, but have been suspended for several decades. As discussed earlier [insert link to NRP post from 4/16/15], while the leases were originally issued over 30 years ago, they were suspended by the BLM in 1992 following controversy over whether any development should occur in the area.

Solenex, LLC, who holds record title to the leases, filed suit in 2013, arguing that the BLM’s decades-long suspension is unlawful and violates the Mineral Leasing Act. On Monday, Judge Leon denied Solenex’s request to order BLM to lift the suspension, instead ordering the BLM and Forest Service to develop a schedule outlining when a final decision will be made. Calling the BLM’s failure to make a decision on the suspension “unreasonable,” Judge Leon stated “[n]o combination of excuses could possibly justify such ineptitude or recalcitrance for such an epic period of time.”

Judge Leon’s order requires the BLM and Forest Service to come up with an “accelerated and fixed schedule” in the next 21 days that identifies the tasks that still need to be completed before a final decision can be made and how long those tasks are expected to take. Attorneys for Solenex have stated that they are disappointed the court did not order the suspensions lifted, but are thankful that the court is taking the issue seriously.

Blackfeet tribal Chairman Harry Barnes stated that the tribe, which considers the area in which the leases are located to be a sacred cultural site, will continue to protest any oil and gas development in the area. “The tribe will never let any drilling go ahead . . . We've fought it for too long, and we're going to continue to fight it.”

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Obama Administration Proposes Changes to ESA-listing Rule

In an apparent attempt to head-off legislative changes to the Endangered Species Act (“ESA”) that have been threatened by Congressional Republicans, President Obama unveiled a suite of proposed changed to the ESA species listing process.   These changes, contained in a proposed rule that was announced on May 19, are largely focused on making it more difficult to file petitions to list species and designate critical habitat.

Section 4 of the ESA allows “any person” to petition the federal government (either the Fish and Wildlife Service for terrestrial species, or the National Oceanic and Atmospheric Administration for aquatic species) to list the species as threatened or endangered. This provision has resulted in a slew of petitions filed by individuals and environmental groups, often seeking the listing of numerous species through a single petition. The FWS and NOAA, which are required by ESA Section 4 to respond to petitions within 90 days, have been unable to keep up with the petitions. The result has been numerous pieces of multi-district litigation and settlement agreements requiring that FWS and NOAA respond to listing petitions within specified timeframes.

Under the proposed rule, listing petitions would be limited to one species at a time, preventing the massive omnibus petitions that gave rise to the multi-district litigation settlements. The rule would also require that parties submitting petitions to list species provide copies of the petitions to state fish and game agencies at least 30 days before they are submitted to FWS or NOAA. If a state wishes to submit comments on the accuracy or completeness of the petition, the petition is required to submit the state’s comments to the FWS or NOAA along with the petition.  The proposed rule also requires that specific information on the species be provided with the petition, including disclosure of any data that would not support listing of the species.  The petitions would also have to include:

•Literature citations that are specific enough for the agencies to find the information, including by page and chapter.

•Electronic or hard copies of any supporting materials, such as publications, maps, reports and letters cited in the petition, or valid links to public websites where the information can be found.

•Information demonstrating that the petitioned wildlife meets ESA's definition of a "species."

•Information on current population status and trends and estimates of current population sizes and distributions, both in captivity and the wild, if available.

The proposed rule can be found at:  http://www.fws.gov/home/feature/2015/proposed-revised-petition-regulations.pdf 

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Utah Law Copied by More Western States Attempting to Take Control of Federal Land

Utah’s Transfer of Public Lands Act (“TPLA”) demands that the federal government “extinguish” its title to more than 30 million acres of federal public lands by December 31, 2014. Utah Code Ann. § 63L-6-101 et seq. (2012). When the law was enacted in 2012, former Department of Interior Secretary Ken Salazar charged that the legislation “defied common sense.”

Since then, Utah’s own legislative lawyers and most outside legal analyses have concluded that if challenged, it is likely that courts would find the law unconstitutional. In addition, the state probably could not afford to manage the lands. A report prepared by the University of Utah’s Bureau of Economic and Business Research, Utah State University’s Department of Applied Economics and Weber State University’s Department of Economics concluded that unless all of the 30 million acres were opened to natural resource extraction, the state would not have sufficient funds to manage the land. Even then, the state would have to demand 100% of the royalties (rather than split them 50/50 with the federal government, as it does currently).

Finally, even if the law survived legal challenge, all of the 30 million acres were opened to natural resource extraction, and Utah received 100% of the royalties, the report also concluded that oil and gas prices would have to remain stable and high in order to generate revenue sufficient to cover the cost of managing the land. As recent events in the industry have taught some and reminded others, oil and gas prices, like those of most commodities, do not historically remain stable or high.

This year, Democratic Utah state senator Jim Dabakis introduced a bill that would have required the state attorney general to sue the federal government for state control over 20 million acres of public land by June 2016. According to senator Dabakis, “[t]he intent of the bill is to once and for all settle the question about who owns public lands in Utah[.] . . . It’s about forcing the hand of those who’ve made careers out of this dispute.” By the end of the 2015 legislative session, Senate Bill 105 did not pass, presumably leaving at least some careers in place for now.

Likewise, the law remains in place, unchallenged and unchanged. Perhaps more surprising, despite studies concluding the numerous ways in which Utah’s law “defies common sense,” this year, seven western states joined Utah in laying the groundwork for land transfers by introducing similar bills to their own state legislatures. Although this land grab may be proceeding at geologic pace, its progress appears to be headed toward making a mountain out of a molehill.    

Read more about this issue in an article published in High Country News: http://www.hcn.org/articles/the-taxpayer-money-behind-local-control-demands?utm_source=wcn1&utm_medium=email

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Colorado Enters Discussion on Federal Land “Takeover”

Colorado has now joined eight other western states in the ongoing discussion of state assumption of control of federally-managed public lands. This has been a hot button issue among western conservatives since the 1970’s, but the movement has recently gained new momentum with the States of Utah, Wyoming, Montana, Idaho and Nevada in various stages of developing plans to either study or implement assumption of management of these lands.

Colorado is the first Democratic-leaning state legislature to take action—albeit tepid—to discuss the “takeover.” Earlier this week, the Colorado Senate Agriculture, Natural Resources and Energy Committee approved a proposal to study the benefits of assuming control of Colorado’s nearly 24 million acres of federally-managed land. The Committee voted along party lines to approve legislation that would establish the Colorado Federal Land Management Commission. The Commission would be a 15-member body made up of County Commissioners from around the state, but weighted toward representation from Counties dominated by federal public lands.

Opposition to the bill has been strong among elected Democrats and sportsman, conservation, and environmental groups in the state and, as reported by Greenwire, during public comment at the hearing, opponents to the bill outnumbered supporters 3-to-1. Much of the opposition has been focused on the make-up of the Committee, which opponents fear leaves numerous stakeholders out of the planning process. Other opponents raised concern that it would be legally impossible for states to “assume” control federally-managed public lands.

Supporters of the bill countered that the Commission is merely a first step in analyzing the issue. Under the bill, the Commission would prepare two reports to be issued in April 2016 and April 2017. It is only after the reports are completed that the legislature would re-visit the issue.

The bill now heads to the full Republican-controlled Senate, where it is expected to pass. However, the bill will likely face an uphill battle in the Colorado House, which is controlled by Democrats.

To read Greenwire’s coverage (subscription required), see:   http://www.eenews.net/greenwire/2015/04/24/stories/1060017407

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Senator Tester calls for Cancellation of Long-disputed Montana Oil and Gas Leases

At the end of March 2015, Montana’s U.S. Senator Jon Tester joined the Blackfeet Nation in calling on the federal government to cancel 18 existing federal oil and gas leases located in Northwestern Montana. These leases have been the focus of controversy for several decades, and Senator Tester’s recent letter appears to signal a new chapter in the ongoing debate.

The leases (collectively referred to as the Solenex Leases) were issued by BLM in 1982. Two years later, the BLM issued an APD for one of the leases, thereby approving wellsite development. However, that development was halted and the other 46 leases were indefinitely suspended when the BLM and U.S. Forest Service (as the surface management agency) issued a series of suspensions between 1993 and 1997, finally deciding in 1998 to “indefinitely suspend” the leases. 29 of the leases have since been voluntarily relinquished, but 18 leases still remain.

The Solenex Leases are located along the Rocky Mountain Front in an area referred to by the Blackfeet as the Badger-Two Medicine. This area is bordered by the Blackfeet Reservation to the Northeast and generally lies southeast of Glacier National Park. While the area is outside of the Blackfeet Reservation boundary, it is considered spiritually significant to some tribal members. The area has now been placed off-limits to future oil and gas leasing as a result of a 2006 statue introduced by Senator Max Baucus that recognizes “valid existing rights”. Thus, the debate now centers on the fate of the remaining 18 leases.

Although the Blackfeet Nation was largely silent on the issue during the 1980’s, ‘90’s and early 2000’s, the Tribe has now publicly expressed opposition to the leases and, with the support of several environmental groups, has argued that the leases should be cancelled on the grounds that they were issued with inadequate NEPA analysis and that the Tribe was not consulted prior to lease issuance.

While the Tribe, with the support of Senator Tester, attempts to exert political pressure on the BLM and Forest Service to finally cancel the leases, Solenex, the owner of several of the remaining leases, has filed suit in federal court arguing that the BLM’s “indefinite” suspension violates the Mineral Leasing Act. Obama administration attorneys have responded that the suspension is “reasonable,” given the complexity of the issue and the fact that remedial environmental analyses are ongoing.

Given the renewed attention being paid to this issue in the courthouse, at the agencies and on Capitol Hill, it seems possible that finality may be close at hand. While it is difficult to predict what form resolution may take, it is likely to be achieved through some combination of litigation and political deal-making.

For more information on the Solenex v. BLM litigation, see the Mountain States Legal Foundation website: https://www.mountainstateslegal.org/cases/all-cases/solenex-llc-v.-jewell#.VS1s0IznaUl

Senator Tester’s letter to Secretaries Jewell and Vilsack can be found at: http://www.tester.senate.gov/?p=news&id=3864

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United States Senate Passes Amendment “Supporting” Transfer of Public Lands to States

Last week, the United States Senate passed a largely symbolic budget amendment sponsored by Alaska Senator Lisa Murkowski (chair of the Senate Energy and Natural Resources Committee) that “supports” the idea of selling, transferring or trading federally-managed public lands to the states. The idea of western states “taking back” public lands has been around since the Sagebrush Rebellion of the 1970’s, but in recent years has been gaining new momentum.   In the last 5 years, 8 states, including Utah, Wyoming, Montana, Idaho and Nevada have “studied” the feasibility of “taking back” or somehow acquiring title to the millions of acres of federally-managed public lands that were reserved to the Union at the time of statehood.

The amendment, S. A. 838 to Senate Resolution 11, is described as “establish[ing] a spending-neutral reserve fund relating to the disposal of certain Federal land,” and conveys no actual authority to transfer lands and does not cover any specific parcels or identify any states by name. Instead, the purpose of the amendment is to demonstrate that “considering such bills is a priority of the Congress” says Robert Dillon, communications director for the Senate Energy and Natural Resource Committee, as reported by High Country News.   Under the Senate authorization, the chamber’s “support” applies generally to “initiatives to sell or transfer to, or exchange with, a State or local government any Federal land that is not within the boundaries of a National Park, National Preserve, or National Monument.” Voting on the measure was largely split down party lines, with Senator Cory Gardner of Colorado as the lone Western Republican to vote no, joining all of the Western Democrats.

While the idea of states taking title to federally-managed public lands (whether through voluntary transfer or litigation) has been widely viewed as, at best, an unlikely and costly proposition, the idea has gained considerable traction in Western states with large percentages of federally-managed public lands. Utah has taken the idea the farthest, passing a law in 2012 demanding the transfer of approximately 20 million acres of federal land. In each fiscal year since 2012, the Utah legislature has allocated taxpayer money to study the issue and devise legal strategies. Most recently, in the 2015 Utah legislative session, the state passed a law allocating considerable funds to pay outside legal counsel to help devise a legal strategy and, potentially, bring litigation against the federal government. The state has recently issued an RFP soliciting bids for this work.

The issue has raised considerable debate in Utah and across the West, with most casual observers wondering about the legality and feasibility of the proposal. While the State of Utah staunchly defends the basic legality of its law authorizing the “take-back” of federal lands, most scholars disagree. According to John Ruple of the University of Utah College of Law, “The [United States] Constitution gives the federal government the authority to retain and manage that land.” Proponents of “taking back” federal lands argue that state enabling acts require federal transfer of public lands to the states. However, as stated by Mr. Ruple, states’ enabling acts do not create an obligation to “return” lands to state management; instead, in the enabling acts, “the state is disclaiming any future claims to federal lands.”

The Senate’s recent action in approving Amendment 838 does not affect the fundamental Constitutional question of state assumption of federal land. It does, however, signal a willingness on the part of the legislative branch to dive into what has, until recently, been a debate largely confined to Western state houses.

High Country News has an excellent series of articles covering the full range of the public land transfer debate:

https://www.hcn.org/articles/utah-bill-would-push-land-transfer-debate-to-federal-court

https://www.hcn.org/articles/western-states-trying-to-take-back-federal-lands-get-a-boost-from-the-u-s-senate

For the State of Utah’s position on its federal land transfer law, see:

http://publiclands.utah.gov/current-projects/transfer-of-public-lands-act/

The University of Utah College of Law’s analysis, authored by John Ruple, can be found at:

http://content.lib.utah.edu:81/cdm4/item_viewer.php?CISOROOT=/utlawrev&CISOPTR=9160

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New BLM Fracking Rule

On March 20, 2015, after considering more than 1.5 million comments, the BLM released its much anticipated fracking rule for oil and gas wells on Federal and Indian lands.

More than 90 percent of all wells, including those on Federal and Indian property, are hydraulically fractured by injecting water, sand and chemicals under high pressure to stimulate the flow of oil and gas. Due to increased public concern over fracking, the rule imposes new requirements for assurance of wellbore integrity, management of flowback fluids, and disclosure of chemicals. The rule requires:

• Before fracking, operators have to perform a successful mechanical integrity test showing that the well can withstand at least the maximum anticipated pressure for 30 minutes with no more than a 10 percent loss of pressure.
• All flowback fluids from fracking must be stored in above-ground tanks. A lined pit may be used instead only if a tank would be infeasible and numerous conditions are met, including being at least 300’ from any stream and 50’ from any usable groundwater.
• Chemicals used in fracking have to be disclosed publicly within 30 days of the last stage of fracking for each well. This information must be certified and submitted “through FracFocus or another BLM-designated database, or in a Subsequent Report Sundry Notice.”

The rule allows operators to request a variance from particular requirements if “the proposed alternative meets or exceeds the objectives of the regulation for which the variance is being requested,” but the “decision whether to grant or deny the variance request is entirely within the BLM’s discretion” and may be rescinded or modified at any time. Various states, including Colorado, Wyoming and North Dakota, are considering whether they might be able to opt out of at least parts of the new rule because their own standards are so strict. BLM Director Neil Kornze told a House Natural Resources subcommittee on March 24 that he is looking at whether variances are warranted for Wyoming and other states and would like to reach those determinations before the 90-day effective date of the rule.
The same day that the BLM initially released the new rule, March 20, 2015, the Western Energy Alliance and Independent Petroleum Association of America filed suit in Federal court in Wyoming to challenge the rule for being unnecessary, overly burdensome and duplicative of environmental regulations and paperwork already required by state regulatory agencies.

The final rule was published in the Federal Register on March 26, 2015. 80 Fed. Reg. 16128. Unless legal challenges are successful, the new fracking rule will take effect on June 24, 2015.

Link to BLM announcement of fracking rule:  http://www.blm.gov/wo/st/en/info/newsroom/2015/march/nr_03_20_2015.html

The text of the rule in the Federal Register may be found at: http://www.gpo.gov/fdsys/pkg/FR-2015-03-26/pdf/2015-06658.pdf

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“Balanced Prosperous Energy Future” on Public Lands?

On March 17, 2015, Secretary Jewell presented what was billed as a “major speech” to describe her vision of a “balanced prosperous energy future” at the Center for Strategic and International Studies. Directly tying the U.S. “energy transformation” to the recovered U.S. economy, she noted, “The energy revolution we experienced in the past six years helped spur the recovery, but it has also been accelerated by the policies our country [read: the Obama Administration] has put in place.”

Secretary Jewell said that since 2008, U.S. oil production grew from 5 million to 9 million barrels per day and U.S. dependence on foreign oil is at the lowest point it has been in more than 30 years. She continued, “The amount of solar energy has increased ten-fold, and wind energy has tripled since 2008 . . . Families are driving farther than ever on a tank of gas . . .These shifts in U.S. energy markets aren’t marginal or temporary: They are tectonic shifts.”

But, she added, “you can’t talk about energy without talking about climate change.” She posed this question to the audience, “How do we modernize our energy programs to anticipate the new energy future?” Her prescription for meeting this challenge is interesting.

According to the Secretary, we “modernize” U.S. energy policy by increased federal regulation of fossil energy and federal promotion of renewable energy. To achieve this energy future, she highlighted these Obama ongoing and new reform efforts:
 Continuation of the 2010 onshore oil and gas leasing reforms that added two new layers of NEPA review before lease sales and reduced annual lease sales in any one state to one a quarter in geographic rotation. Results to date: BLM leasing at an historic low in last 25 years.
 Increased regulations for off-shore oil and gas drilling post-Macondo including: well design, production systems, blowout prevention and well control equipment.
 New fracking rule for oil and gas on federal and tribal lands—out this month.
 New methane controls for onshore oil and gas to cut “emissions and wasted gas that result from venting and flaring.”
 New stream protection regulations for coal mining operations.
 New off-shore oil and gas rule to “raise the bar on blowout preventers and well control measures.”
 New rules for off-shore Alaska oil and gas exploration.
 New reforms of the federal coal program to ensure a “fair return,” to federal and state governments and greater transparency and competitiveness.
 New coal regulations to answer this question: “How do we manage the coal program in a way that is consistent with our climate change objectives?”
 New oil and gas royalty policy - BLM will be taking comments on raising oil and gas royalty rates.
 New inspection fees for oil and gas (Congress needs to okay this request.)
 New legislation to eliminate oil and gas “tax credits and incentives” and invest instead in wind and solar incentives.
 More use of planning efforts like Master Leasing Plans “to open up access to resources in the right places” and close access to oil and gas leasing by “identifying places that are too special to drill.”
 Continue planning and policy efforts to promote on and off-shore renewable energy in order to expedite permitting times for renewable energy.

The Secretary concluded her list of regulatory reforms by stating that as a “grandmother,” she is “determined to make energy development safer and more environmentally sound in the next two years.”
Will this prescription of more federal regulation for fossil energy support the “tectonic shift” in U.S. energy production or act as a brake on the U.S. energy revolution? That is not a difficult question to answer.

Link to text of Secretary Jewell’s remarks:  http://www.doi.gov/news/pressreleases/secretary-jewell-offers-vision-for-balanced-prosperous-energy-future.cfm

 

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UT Governor Herbert Signs Executive Order on the Greater Sage Grouse to Short Circuit Federal Listing

On Tuesday, February 10, 2015, Utah Governor Gary Herbert signed an executive order directing state agencies to implement additional state-level protection measures aimed heading off a potential federal listing of the sage grouse as “threatened” or “endangered” under the Endangered Species Act. Under a settlement reached in 2012, the U.S. Fish and Wildlife Services have until September 2015 to decide whether the sage grouse should be listed under the ESA. Referring to the consequences of such a designation as potentially “devastating,” Governor Herbert’s executive order requires that all state agencies minimize the impact of activities on sage grouse, consult with the Utah Division of Wildlife Resources on decisions that could affect sage grouse habitat, and incorporate directives from the Utah Conservation Plan into state operations.

While the executive order requires consideration of sage grouse protections in agency decision-making, it does not impose the level of regulation or constraints on private property and federal lands that would be imposed if the sage grouse is listed under the ESA. According to Governor Herbert, "The concern we have here in Utah that in doing so [a federal listing], it will have a significantly devastating impact on our economy," particularly on farmers, ranchers and those involved in natural resource extraction.

The executive order implements a number of proposals contained in the Utah Sage Grouse Conservation Plan, which was completed in April 2013 and contained recommendations for habitat preservation. While many of the recommendations contained in the Conservation Plan have been informally implemented by state agencies, the executive order seeks to make the Plan’s recommendations mandatory. According to Utah’s Public Lands Policy Coordinating Office, informal implementation of the Conservation Plan and other localized habitat preservation efforts have already led to an increase in sage grouse populations throughout the state.

In conjunction with the executive order, Utah lawmakers are seeking a $2 million appropriation to preserve sage grouse habitat. These protections would include projects on state and private lands to improve sage grouse habitat, such as removing pinyon-juniper stands which encroach onto sage brush. According to Senator Kevin Van Tassell, who proposed the appropriation, the executive order and the state habitat preservation projects are intended to show the FWS that state-level management of the species is working and that federal intervention through the ESA is unnecessary.

Governor Herbert’s executive order comes almost five years after former Wyoming Governor Freudenthal’s executive order on Sage Grease Core Area Strategy and is intended to promote the same goal: prevention of an ESA listing. Wyoming has been a leader in this movement, and implementation of its conservation plan—which includes a prohibition on surface disturbing activities in areas designated as core habitat—have proven successful.

It remains to be seen whether these state-level efforts will be sufficient to forestall a federal listing of the Greater sage grouse or whether Utah’s response will prove to be too little too late.

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Interior Will Make Greater Sage-grouse Determination Despite Congressional Rider

In a January 26, 2015 letter responding to the bi-partisan co-chairs of the Western Governors’ Association State-Federal Sage-Grouse Task Force, Interior Secretary Jewell stated that, despite a congressional rider prohibiting the U.S. Fish and Wildlife Service from issuing a listing rule, the Department will make a listing determination for the greater sage-grouse by the court-ordered deadline of September 30, 2015. “In line with that obligation, the [FWS] is on schedule to make a determination by that date, based on revised Bureau of Land Management and U.S. Forest Service land management plans, an enhanced rangeland fire strategy . . . and states’ plans to conserve the greater sage-grouse.”
In a 2011 settlement, FWS committed to making a final listing decision for the greater sage-grouse either as “warranted” (as endangered or threatened) or “not warranted” for listing under Section 4 of the Endangered Species Act September 30th. In December 2014, the appropriations bill signed by the President (H.R. 83) contained language prohibiting the FWS from writing or issuing a rule to list the greater sage-grouse.

Under ESA § 4, if FWS decides to list a species it must be done by notice and comment rulemaking. This process begins with a proposed rule and ends with a final rule between 90 days and 18 months later. The proposed rule must summarize the data upon which it is based, show the relationship of the data to the proposed rule and provide a summary of the factors affecting the species. At least a 60-day comment process is required. Within 12 months of the publication of the proposed rule, FWS must either publish or withdraw the proposed rule or upon a finding of “substantial disagreement regarding the sufficiency or accuracy of the available data” extend the deadline for no more than 6 months. For land users, an important component of a listing rule is the identification of specific activities that will, or will not, likely result in a “take” violation under ESA § 9. This section of the Act prohibits “take” of a listed species anywhere and everywhere – federal, state or fee lands.
With the congressional rider in place, FWS can’t issue a listing determination rule for the greater-sage grouse, or, as in the case of the now-listed as threatened Gunnison sage grouse (see prior post), FWS can’t issue an ESA § 4(d) rule providing for management flexibility. FWS can issue a not-warranted finding, complete the analyses for a listing determination or a ESA 4(d) rule, or issue an emergency listing rule for 240 days under ESA 4(b)(7). The nightmare scenario is that FWS will make a determination in September that the bird should be listed, but because of the rider won’t be able to give guidance in a rule on how the public can avoid “take”. Similarly, the ESA § 7 consultation process for federal actions would grind to a halt as federal agencies comply with the consultation process without any actionable information from FWS.

Over the last several years, the states that would be most affected by a listing have been working on state conservation plans and coordinating with the federal land management agencies in an effort to forestall a listing. On January 16, 2015, Governors Hickenlooper (CO-D) and Mead (WY-R) wrote to the Secretary with two questions, the first concerning the schedule for listing and the second asked “[w]hat funding was provided to support state and federal efforts focused on greater sage-grouse conservation? In particular, how will BLM use the $15 million appropriated to the agency?”
The Secretary’s response to the funding question was not encouraging, “[t]he Department intends to spend the $15 million appropriated . . . to complete the BLM land management plans and implement actions critical to sagebrush conservation and restoration . . . [and] will continue to work with the states to complete our land management plans, solicit their advice in developing our rangeland fire strategy, and prioritize actions on the ground to protect and restore sagebrush landscapes and important habitat.” Emphasis added. Secretary Jewell did conclude her letter by affirming the “shared goal” of getting to a “not warranted” finding.

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The Muddy Waters Surround the FWS's Listing of the Gunnison Sage-Grouse

In the 2015 Appropriations Bill (Cromnibus), via a rider, Congress prohibited Interior from writing or issuing any final listing rule under Section 4 of the Endangered Species Act (“ESA”) for several species of grouse. It now looks like that action could result in some unintended consequences for the recently listed Gunnison Sage-Grouse, a bird whose habitat is found in southwestern Colorado and eastern Utah. On November 12, 2014, the Gunnison Sage-Grouse was listed under the ESA as “threatened.” When a species is listed as threatened rather than “endangered,” the ESA § 4 provides the Fish and Wildlife Service (“FWS”) with significant management flexibility. This regulatory flexibility includes the authority to craft a species-specific rule that can formally recognize state, local and private conservation efforts under ESA § 4(d). At the time of the listing, which was widely criticized in Colorado and Utah for failing to give enough credit to the State’s conservation efforts, the FWS kept the door open for future negotiations. FWS Director Ashe stated that FWS would draft and implement a so-called 4(d) rule in early 2015, which would make ESA compliance easier for landowners and industry.

The Cromnibus prohibition of expenditures for ESA § 4 listing actions appears to have inadvertently put a roadblock to the agency’s intent to draft a special rule for the Gunnison Sage-Grouse under section 4(d) that could have created exceptions and loosened the default requirements associated with the listing. It appears that Congress may have done so unwittingly, on the basis of language drafted long before the Gunnison Sage-Grouse was listed. Regardless of what Congress intended to do, it did not actually prevent the listing and may have made a bad situation worse.

Further muddying the waters on the listing is the fact that, on December 12, 2014, the State of Colorado filed a notice of intent to sue FWS over the listing of the Gunnison Sage-Grouse. The ESA requires that parties planning to sue provide the agency with 60-days’ notice of that intent, and the Colorado Attorney General has indicated that Colorado will file the lawsuit when this period expires. Gunnison County has also filed a notice of intent to sue the FWS over the listing. Similarly, on January 20, 2015, John Harja of Utah's Public Lands Policy Coordination Office announced that his office had filed a notice of intent to sue to challenge the listing. It has yet to be decided whether the State of Utah will file its own litigation or join the State of Colorado’s suit.

Also on January 20, 2015, the Western Watersheds Project and the Center for Biological Diversity filed a complaint in Federal District Court in Colorado arguing that the Gunnison Sage Grouse should have been listed as endangered, rather than threatened under the ESA. In the litigation, the groups are asking the court to remand the final rule listing the bird as threatened to the FWS for “an adequate finding that complies with all requirements of the ESA and the[Administrative Procedure Act.” In the meantime, the groups ask that the threatened listing remains in place.

The question remains whether, in the midst of these competing challenges and the federal governments’ self-inflicted prohibition on monetary expenditures, there will be an opportunity to find a compromise that could provide management flexibility and recognition of State, local, and private conservation efforts.

The listing of the Gunnison Sage-Grouse is available at http://www.fws.gov/mountain-prairie/species/birds/gunnisonsagegrouse/GUSGFinalListingRule_11202014.pdf

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Nevada Association of Counties Sue over Candidate Species Settlement

In a new twist in the ongoing debate between states and the federal government over the management of wildlife, the Nevada Association of Counties sued the U.S. Fish and Wildlife Service (“FWS”), arguing that the highly publicized and controversial 2011 settlement of a lawsuit between the FWS and environmental groups that forces listing determinations by a date certain violates the Endangered Species Act (“ESA”). On December 4, 2014, the Nevada Counties filed the suit in the United States District Court for Nevada, Case No. 3:14-cv-00630 challenging the settlement of In re Endangered Species Act Section 4 Deadline Litigation (“2011 Litigation”).

In the 2011 Litigation, a coalition of environmental groups filed multiple actions to compel the FWS to meet statutory deadlines on hundreds of pending ESA § 4 listing petitions. When a species is proposed for listing under the ESA, the ESA requires that the FWS study the candidate species and then issue a determination finding that the listing of the species as “threatened” or “endangered” is either “warranted,” “not warranted,” or “warranted, but precluded by other priorities.” 16 U.S.C. § 1533(b)(3)(B); 50 C.F.R. § 424.14(b). Listed species are entitled to heightened protection by the federal government, state and private actors. Although candidate species may be protected under other federal and state regulation, they are not managed under the ESA.

Over the last decade, wildlife advocates flooded the FWS with listing petitions; FWS lacked the resources to keep up with the statutory listing determination deadlines. For the species targeted by the 2011 Litigation, rather than deciding whether a species should be listed or not, FWS stalled for time (and resources) by finding the listing of the species “warranted, but precluded.” The FWS settled the case by agreeing not to issue determinations of “warranted, but precluded” for the species named in the litigation, but would instead only issue decisions finding that the listing of the candidate species was “warranted” or “not warranted” under the ESA. See Stipulated Settlement Agreements, In re Endangered Species Act Section 4 Deadline Litigation, Misc. Action No. 10-377 (D.D.C. May 10, 2011 and July 12, 2011), available at https://www.fws.gov/endangered/improving_esa/exh_1_re_joint_motion_FILED.PDF and http://www.biologicaldiversity.org/programs/biodiversity/species_agreement/pdfs/proposed_settlement_agreement.pdf.

The Nevada Counties argue that by entering into the 2011 Litigation settlement that prohibits the “warranted, but precluded” option, FWS modified the congressional intent in the ESA. That is, Congress intended that FWS be allowed to determine that the listing of a candidate species is “warranted,” but that there are other species that present more pressing concerns for protection. Moreover, Plaintiffs allege that FWS failed to study the candidate species prior to entering into the settlement, which effectively made listing decisions for all of the targeted species without adequate study. FWS’s answer is due in early February 2015. The 2011 settlement of this litigation by the Administration was a key environmental policy objective so the Nevada challenge bears watching.

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BLM Proposes Renewable Energy Leasing and Rights-of-Way Regulations

On December 16, 2014, the BLM closed a comment process on wind and solar competitive leasing regulations. What is equally of interest is that BLM is also using this rulemaking to turn their 2011 renewable energy policies into binding regulation. Wind and solar projects are permitted under Federal Land Policy Management Act (“FLPMA”) right-of-way (“ROW”) regulations (43 CFR 2800), but until now there were no specific wind and solar permitting regulations. The rulemaking wraps up key components of the Obama administration’s approach to renewable energy development on public lands.

In 2009, Secretary Salazar signed Secretarial Order No. 3285, “Renewable Energy Development by the Department of the Interior.” A year later, in early 2010, the Order was amended and identified renewable energy as a “top priority” of the Department. Early on, BLM was concerned about speculation and desired more control over where wind and solar projects were located. To address these issues, in 2011, BLM issued a series of new and amended Instruction Memoranda (“IM”) that provided guidance to the BLM on how to permit wind and solar projects. In the IM’s, the BLM added requirements for due diligence, Plans of Development, pre-application meetings and addressed the term of the grant, bonding, rental formulas and its “screening authority.”

In this proposed rule, BLM intends to make these policies binding rules on the regulated public. See § 2804.25, screening criteria; § 2805.11(b), ROW grant term of 30 years; § 2805.12(c), “terms and conditions” for renewable grants; § 2805.20 detailed bonding requirements; and §§ 2805.50 and .60 solar and wind rent formulas which include a “megawatt capacity fee” in addition to an area land rent.
The “smart from the start” siting policy was announced by Secretary Salazar in 2010. The new direction began with solar energy zones (“SEZs”), designated areas for development, in the Solar Programmatic Environmental Impact Statement completed in 2012. In 2011, BLM published an Announcement of Proposed Rulemaking, the first step in this proposed rule, to develop a competitive leasing program for wind and solar. To inform that process, BLM conducted a competitive auction in the Dry Lake SEZ in Nevada in 2014.

The proposed rule builds on this siting approach by creating a leasing process for wind and solar in designated leasing areas (“DLAs”) and provides incentives (reduction in rental fees, predictable bonds) for leases in DLAs. If competitive interest is shown in an area outside a DLA, BLM can create a competitive leasing process. Otherwise, applicants would continue to use the FLPMA ROW grant process. BLM expects to finalize the rule by October 2015.

The text of the rule may be found at: http://blmsolar.anl.gov/documents/docs/FR_Competitive_Leasing_Sep_30_2014.pdf.

See Related Post: BLM Buries Change to MLA Rights of Way in Wind and Solar Leasing Change

For more information of permitting renewable energy on federal lands, contact Rebecca W. Watson at rwatson@wsmtlaw.com.

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BLM Buries Change to MLA Rights of Way in Wind and Solar Leasing Change

At the end of September 2014, BLM released the proposed rule to create a competitive leasing process for solar and wind energy development on public lands. While most of the proposed rule relates to the renewable energy right-of-way (“ROW”) procedures under the Federal Land Management Policy Act (“FLPMA”) regulations (43 CFR 2800) announced in 2012, buried in the voluminous proposal are changes to oil and gas pipeline rights of way under the Mineral Leasing Act (“MLA”). 43 CFR 2880.

Under the changes to Part 2880, BLM is proposing pre-application requirements and an increase in fees for all oil and gas pipelines 10 inches or more in diameter. (The rule adds similar new requirements for transmission lines of 100kV or greater). According to BLM, changes to Part 2880 are necessary to ensure consistency between MLA ROWs (governed by Part 2880) and the changes proposed for wind and solar ROWs (governed by Part 2800). BLM states that these changes are necessary because authorizations for any pipeline 10 inches or more in diameter are “generally large-scale operations that require additional steps to help protect the public land.”

The changes to Part 2880 include additional bonding requirements (such as identification of acceptable forms of bond), although BLM still retains discretion as to whether a bond will be required. The proposed rule also contains an increase in ROW application processing costs, which are determined based on a proposed table of costs accounting for project components. Under the proposed rule, BLM would be permitted to collect reimbursement from pipeline operators for the actual costs incurred in processing ROW applications, including pre-application expenditures.

The proposed rule also contains detailed pre-application procedures for project proponents, largely aimed at developing coordination between Federal, State, tribal and local governments that may be affected by the project. Specifically, for all pipelines over 10 inches in diameter, the proposed rule calls for a minimum of two pre-application meetings with interested governmental entities.

BLM proposes to require the submittal of a plan of development (“POD”) prior to, or contemporaneously with, accepting the ROW application. The POD should, at a minimum, contain a statement of purpose and need, a description of the proposed location and associated facilities, identification of the federal and state agencies affected and a summary of operation and maintenance and stabilization and reclamation plans. The comment process closed on December 16, 2014 and the rule is expected before the end of 2015.

The net result of these proposed changes will likely be an escalation in up-front project costs, consisting of both increased application and rental fees and an increase in soft costs associated with pre-project planning and coordination. It remains to be seen whether the increase in initial costs will reduce overall project costs through more efficient up-front planning and coordination.

The Federal Register notice with the text of the proposed rule can be found at: http://blmsolar.anl.gov/documents/docs/FR_Competitive_Leasing_Sep_30_2014.pdf

See Related Post: BLM Proposes Renewable Energy Leasing and Rights-of-Way Regulations

For more information about public lands and rights of way, please contact Nora Pincus at npincus@wsmtlaw.com

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