“All of the Above Energy”/ “Energy Dominance”: The Courts Strike Back on Climate Change

Although the Obama and Trump administrations differ markedly on climate change and energy policy, their oil and gas decisions are being similarly faulted by federal courts. President Obama had an “all of the above” energy policy that included the development of oil and gas but took addressing climate change as a serious obligation. President Trump has by executive order (EO 13783), agency policies (Secretarial Order 3360) and rulemakings rejected Obama climate change policies to support an “energy dominance” energy policy.

In March 2019, two federal courts considered two different phases of the Bureau of Land Management’s (BLM) oil and gas process—leasing and development—and found BLM’s National Environmental Policy Act (NEPA) analysis faulty for failing to adequately consider greenhouse gas (GHG) emissions and climate change impacts. WildEarth Guardians v. Zinke (D.D.C., March 13, 2019) (WEG) and Citizens for a Healthy Community v. BLM (D. Colo., March 27, 2019) (Citizens). Oil and gas lease holders in Wyoming and an oil and gas development in Colorado have been stymied as the courts direct BLM to improve its analysis of climate change impacts. The WEG court refused to vacate the leases, but on remand directed BLM to complete a new analysis before allowing development on existing leases or any new leasing. Although the industry has asked the administration to appeal the WEG decision, the administration’s next move is not clear. The Citizens court has asked for additional briefing on a remedy.

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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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“Keep it in the Ground” – Part II

After the President denied the Keystone XL pipeline, climate change activists have turned their attention to federal fossil fuel leasing, discussed in our recent blog post: What’s Next, Post Keystone XL? “Keep it in the Ground!”.  The “Keep it in the Ground” proponents argue the President should abandon his “all of the above” energy policy for one that bans all future leasing of federal fossil fuels.

The argument has resulted in divided opinions—even within the Obama Administration. While Interior Secretary Sally Jewell has called the movement unrealistic and simplistic, EPA’s Administrator, Gina McCarthy, seemed to validate the environmentalists’ position by noting it would not be “extreme” for the government to ban all coal, oil, and natural gas production on federal lands.

Ultimately, for the Obama Administration, and future administrations, this policy argument raises a legal question: Could the Secretary of the Interior completely stop all federal coal and on and offshore oil and gas leasing? To answer that question, the Mineral Leasing Act of 1920 (“MLA”), as amended, the Federal Land Policy and Management Act (“FLPMA”) and the history of federal mineral management must be examined.

As Congress encouraged the settlement of the West, it began to take steps over time to retain management and ownership over federal minerals. Congress passed the Enlarged Homestead Act in 1909, 43 U.S.C. § 218, which allowed individuals to obtain title to up to 320 acre parcels without any reservation of the mineral estate to the government. In the subsequent Stock-Raising Homestead Act of 1916, Congress reserved “all coal and other minerals” to the federal government. 43 U.S.C. § 299; see also Watt v. Western Nuclear, Inc. 462 U.S. 36, 47 (1983) (observing Congress did not wish to entrust the development of valuable minerals to ranchers and farmers). Similarly, in the Coal Lands Acts of 1864 and 1873 the government conveyed lands without reserving the coal, but reversed course in later amendments in 1909 and 1910. The 19th and 20th century railroad acts also evolved from grants without reservation to surface-only grants.

In 1920, Congress enacted the Mineral Leasing Act of 1920, 30 U.S.C. § 181 et seq., to provide for more efficient development of federal oil, gas, and coal deposits. Section 226 of the MLA provides for leasing of oil and gas. Section 226(a) declares that “[a]ll lands subject to disposition under this [Act] which are known or believed to contain oil or gas deposits may be leased by the Secretary.” 30 U.S.C. § 226(a). The U.S. Supreme Court has found this language to provide the Secretary with discretionary authority to lease federal minerals. Udall v. Tallman, 380 U.S. 1, 4, (1965); see also Bob Marshall All. v. Hodel, 852 F.2d 1223, 1230 (9th Cir. 1988) (the MLA “allows the Secretary to lease such lands, but does not require him to do so.... [T]he Secretary has discretion to refuse to issue any lease at all on a given tract”). But does this secretarial authority to choose not to lease a particular parcel or tract of federal minerals extend to termination of the entire federal minerals leasing program? Such action does not appear to be the intent of Congress.

Congress enacted the MLA to “promote the orderly development of the oil and gas deposits in the publicly owned lands of the United States through private enterprise.” Harvey v. Udall, 384 F.2d 883, 885 (10th Cir. 1967). In California Co. v. Udall, the court stated that the Department of the Interior must administer the MLA “so as to provide some incentive for development.” 296 F.2d 384, 388 (D.C. Cir. 1961). The Mining and Minerals Policy Act of 1970, 30 U.S.C. § 21 et seq., emphasized the critical importance of federal mineral development and the essential role of the private sector and directed Interior to “foster private enterprise.”; see also Mountain States Legal Found. v. Andrus, 499 F. Supp. 282, 392 (D. Wyo. 1980) (“The Secretary of the Interior must administer the Mineral Leasing Act so as to provide some incentive for, and to promote the development of oil and gas deposits in all publicly-owned lands of the United States through private enterprise.”).

The Federal Onshore Oil and Gas Leasing Reform Act of 1987 amended the MLA to establish a competitive leasing system. 30 U.S.C. § 226(b)(1)(A). As amended, the MLA mandates the BLM to conduct lease sales “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.” 30 U.S.C. § 226(b)(1).

“Keep it in the Ground” supporters argue that the Secretary could use the FLPMA land use planning authority to determine that no eligible lands are available in any state to effectively impose a nationwide moratorium on all new federal leasing. This argument ignores the above statutory mandates and overstates the Secretary’s limited authority to withdraw lands from leasing.

FLPMA established the federal policy to retain federal lands and to manage for multiple uses through the land use planning process to best meet national interests. 43 U.S.C. § 1701(a). FLPMA includes mineral development in its list of permitted multiple uses: “[T]he public lands [are to] be managed in a manner which recognizes the Nation’s need for domestic sources of minerals, food, timber, and fiber from the public lands . . .” Id. at (a)(12). Further, the Act requires that “the United States receive fair market value of the use of the public lands and their resources…” Id. at (a)(9). In this same section at (a)(4) Congress reserved its power to “exercise its constitutional authority to withdraw or otherwise designate or dedicate Federal lands for specified purposes and that Congress delineate the extent to which the Executive may withdraw lands without legislative action,” and specifically limited the Secretary’s withdrawal authority in size and to no longer than 20 years. 43 U.S.C. § 1717(d).

Read together, FLPMA’s management directives suggest that, at a minimum, a decision to withhold lands from leasing would need to be made on a site-specific basis through land use planning and that such withdrawal could not be made permanent without the authorization of Congress. See Norton v. S. Utah Wilderness All., 542 U.S. 55, 58 (2004) (explaining FLPMA’s multiple use mandate and noting lands not compatible with this mandate are identified by the Secretary on a site-specific basis as part of the land use planning process); see also Lujan v. Natl. Wildlife Fedn., 497 U.S. 871, 877 (1990) (discussing FLPMA’s direction that the Secretary “determine whether, and for how long, the continuation of the existing withdrawal of [selected] lands would be, in his judgment, consistent with the statutory objectives of the programs [other than multiple use] for which the lands were dedicated.”). FLPMA’s multiple use mandate—which includes mineral development— must be read in coordination with the MLA and the Mining and Minerals Policy Act. 43 U.S.C. § 1701(a)(12)(“including implementation of the Mining and Minerals Policy Act of 1970”).

As climate activists continue to press the government to transform federal leasing or simply keep federal fossil fuels in the ground, we can expect “policy forcing” litigation to follow. See, e.g., WildEarth Guardians v. Jewell, 738 F.3d 298, 312 (D.C. Cir. 2013) (rejecting the argument that BLM coal leasing in the Powder River Basin failed to properly consider global climate change); see also McKeown, Matthew J., “Emerging Clarity: Trends in Air Quality Litigation Arising from Federal Public Land Mineral Development,” vol. 58, ch. 25 (Rocky Mt. Min. L. Fdn. 2012). Courts and possibly Congress will be the ultimate arbiters of this movement giving a final word on whether the MLA, FLPMA, and the legislative history authorize the Secretary of the Interior to completely stop all federal coal and on and offshore oil and gas leasing.

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