Federal Judge Blocks Oil and Gas Leases, Development on Federal Lands in Wyoming

Published April 30, 2019

U.S. District Judge Rudolph Contreras blocked oil and natural gas lease sales proposed by the Obama administration in 2016 for nearly 500 square miles of federal land in Wyoming, requiring a radical change in how the U.S. Department of Interior’s Bureau of Land Management (BLM) considers potential effects on climate change.

Although court orders involving oil and gas development or pipeline construction are nothing new, this ruling went significantly beyond previous decisions in one key respect. Instead of restricting his order to assessments of the effects of individual permits, Judge Contreras said BLM officials must consider the impact of greenhouse-gas emissions on the climate resulting from all past, present, and foreseeable future oil and gas lease sales or drilling on all federal lands in Wyoming before offering individual lease sales.

“By asserting that these crucial environmental analyses are overly speculative at the leasing stage and more appropriate for later, site-specific assessments, BLM risks relegating the analyses to the ‘tyranny of small decisions,'” Contreras wrote in his March 20 opinion. “Given the national, cumulative nature of climate change, considering each individual drilling project in a vacuum deprives the agency and the public the context necessary to evaluate oil and gas drilling on federal land.

“BLM failed to take a ‘hard look’ at [greenhouse gas] emissions from the Wyoming lease sale,” wrote Contreras.

Expands NEPA’s Scope

The National Environmental Policy Act (NEPA) requires federal agencies, in this case the BLM, to undertake comprehensive environmental impact assessments on major federal actions, in this case a proposal to offer new oil and gas leases for development on federal land in Colorado, Utah, and Wyoming. Historically in such cases, BLM would assess how the proposed oil and gas development might affect air and water quality and/or protected species, with BLM then approving or rejecting the plan based on its assessment of whether the project would be harmful and whether the effects could be mitigated or avoided by altering the proposed development plans.

By expanding NEPA’s requirements to include a comprehensive assessment of the effect of projects’ greenhouse-gas emissions on the climate nationwide, before any action, including a lease sale, is even undertaken, Contreras, appointed by former President Barack Obama, has imposed a new condition on environmental impact assessments.

BLM officials are prohibited from issuing drilling permits until they have conducted the court-ordered climate assessment.

Activist Groups Sued

The case dates to two Wyoming oil and gas lease sales held between May 2015 and August 2016. Two activist groups, WildEarth Guardians and Physicians for Social Responsibility, responded by suing the Obama administration in an effort to block oil and gas development on federal land in Colorado, Utah, and Wyoming. Judge Contreras’ order applies only to oil and gas lease sales offered in Wyoming.

Contreras’ decision was “grandstanding” and will do nothing to prevent or limit climate change, said Wyoming Gov. Mark Gordon in a statement expressing his disagreement with the ruling.

“Our country’s efforts to reduce carbon should not center on the livelihoods of those committed workers and industries who seek to provide reliable and affordable energy,” Gordon’s statement said. “Bringing our country to its knees is not the way to thwart climate change.”

‘A Sketchy Decision’

Contreras’ decision will probably be overturned if appealed, says Dan Kish, a senior fellow at the Institute for Energy Research and the American Energy Alliance.

“Obama Judge Contreras has issued a sketchy decision that ultimately must be struck down for its attempt to legislate from the bench,” Kish said. “Contreras’ decision weakens America and has no basis in the law.”

David Wojick, Ph.D., a senior policy analyst with the Committee for a Constructive Tomorrow (CFACT), says Contreras’ decision assumes there is a climate impact from oil and gas production, instead of following the law by accepting BLM’s assessment of what effects should be considered under the law.

“This judgment is stupid,” said Wojick. “Under NEPA, the environmental impact assessment for a project is supposed to do just that, evaluate the identifiable impacts of a project.

“If the court wants to see the impact of a project, it should look at the impact assessment BLM provided it, not impose new types of assessments on a project,” Wojick said.

Money for States, Feds

The Trump administration has made producing coal, natural gas, and oil on federal lands and waters a top priority. In 2017, energy companies paid $6.5 billion to extract fossil fuels in areas under federal jurisdiction, with the money divided between the federal government and the states where the extraction took place.

The Trump administration’s policies are promoting American independence, says Kish.

“President Trump is making America stronger every day by trying to produce more of our energy right here at home,” Kish said.

Considering Options

The Trump administration had yet to respond to the court’s decision at press time. One option is to appeal Contreras’ ruling. In addition, because Contreras’ order is not a permanent ban on drilling, another option is to redo the environmental assessment for this particular project in accordance with the judge’s instructions and resubmit it.

Gordon indicated Wyoming might appeal Contreras’ ruling. Meanwhile, Gordon and the Trump administration are in preliminary talks over how to expand Wyoming’s role in the NEPA process going forward.

Gordon met twice earlier in 2019 with then-Acting Interior Secretary David Bernhardt (see story on pg. 10) to discuss how the state could take the lead role in NEPA environmental reviews in Wyoming, including overseeing the rigorous Environmental Impact Statements required for major federal actions or projects on federal lands within the state.

Bonner R. Cohen, Ph.D. ([email protected]) is a senior fellow at the National Center for Public Policy Research and a senior policy analyst with CFACT.