Protecting Financial/Trade Secret Information Submitted to the Federal Government: FOIA Exemption 4

The Freedom of Information Act, or FOIA, was signed into law by President Lyndon Johnson on July 4, 1966. FOIA gives the public the right to access records from any federal agency or department within the executive branch. Oil and gas, renewable energy, and mining companies frequently are required to provide financial or trade secret information to the Bureau of Land Management (BLM) or other federal agencies. How can a company be sure that business information won’t be widely shared with the public as a result of a FOIA request? While FOIA plays an important role in keeping the government transparent and accountable, Congress has set forth a series of exceptions to FOIA’s disclosure requirement.

Exemption 4 most recently received the limelight. Exemption 4 states, in pertinent part, that FOIA’s mandatory disclosure requirement does not apply to “commercial or financial information” that is “obtained from a person and privileged or confidential.” 5. U.S.C. §552(8)(B)(b)(4). Yet the term “confidential” is not defined anywhere in the Act. This is where things get interesting.

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A New Order Under the New Administration: The DOI Seeks to Streamline the Federal Leasing Process

On July 6, 2017, Department of the Interior (“DOI”) Secretary Ryan Zinke signed Secretarial Order No. 3354, “Supporting and Improving the Federal Onshore Oil and Gas Leasing Program and Federal Solid Mineral Leasing Program.” In an accompanying press release, Secretary Zinke touted the Order as a promise the DOI would “be a better neighbor in the new Trump Administration,” and noted that the Order is in “support [of] the President’s goal of American energy dominance.”

The Secretary also highlighted the importance of compliance with the Mineral Leasing Act (“MLA”), the existing federal law governing lease sales, which states “[l]ease sales shall be held for each State where eligible lands are available at least quarterly and more frequently if the Secretary of the Interior determines such sales are necessary [emphasis added].”1 Once a parcel is leased, an Application for Permit to Drill (“APD”) is filed and there is a statutory thirty-day window to either issue the permit, or notify the applicant of a deferred decision and list the reasons for deferral.2 As Secretary Zinke stated in an interview, the current average wait for APD approval is approximately 257 days, and exceeds 500 days at certain Bureau of Land Management (“BLM”) offices.3 Although the Secretary did not mention any pending litigation as grounds for his Order, it is notable that on August 11, 2016, prior to the issuance of the Order, the Western Energy Alliance filed a lawsuit against the Secretary and the BLM centered on the agency’s lack of compliance with the MLA timing mandates discussed above.4

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