Independent Producers Fight Back Against Illegal Disruption of Federal Oil and Gas Lease Sales

BakerHostetler files suit in federal court on behalf of Western Energy Alliance

Press Releases / August 11, 2016

DENVER, Aug. 11, 2016 — BakerHostetler filed a lawsuit in the United States District Court for the District of New Mexico today on behalf of the Western Energy Alliance, seeking to hold the Bureau of Land Management (BLM) accountable to BLM’s statutory obligations to conduct quarterly oil and gas lease sales and to make the management and administration of these sales more transparent. The number of federal lease sales conducted in the West has steadily declined over the past several years as the Department of the Interior bows to the politicized agenda of special interest groups and the environmental lobby’s “Keep It in the Ground” campaign. While the Mineral Leasing Act imposes a statutory duty on BLM to conduct four lease sales per year in each state with eligible parcels, BLM has routinely disregarded that legal requirement by postponing or outright canceling lease sales.

“Notwithstanding the bluster of special interest groups that disregard the contribution independent producers make to domestic prosperity and national security, the overlooked point is that the ‘Keep It in the Ground’ approach is inconsistent with controlling law,” said Mark Barron, the Denver-based BakerHostetler attorney leading the litigation. “With this lawsuit, we seek to ensure that Congress’s explicit legal directive — not cute lobbying slogans — drives federal land administration.”

Each of the BLM state offices responsible for conducting oil and gas lease sales has broken the law over the past several years:

  • the New Mexico State Office conducted only two lease sales in FY2015 and plans to conduct no more than three in FY2016 or FY2017;
  • the Wyoming State Office will conduct no more than three lease sales in FY2016;
  • the Montana/Dakotas State Office will conduct no more than two lease sales during FY2016;
  • the Utah State Office conducted only three lease sales in FY2015 and will conduct no more than two lease sales in FY2016;
  • the Colorado State Office conducted only three lease sales in FY2015 and will conduct no more than two lease sales in FY2016;
  • the Eastern States Office conducted only two lease sales in FY2015 and will conduct no more than two lease sales in FY2016.

Cancellations are not the only issue addressed in the suit. Even when lease sales do occur, BLM frequently fails to offer parcels in all states in which lands are available, creating periods of months, or even years, during which no parcels in key energy-producing states are available for lease.

“The failure to hold regular lease sales consistent with the Mineral Leasing Act’s mandate results in unnecessary delays for — and can completely halt — development of certain federal minerals,” explained Alex Obrecht, a Denver-based member of the firm’s national Energy team. “But more important, limiting leasing restricts operators’ ability to plan projects so that waste is reduced and development is executed in the most environmentally sensitive manner.”

“Equally concerning to lease cancellations is the utter lack of transparency in the way BLM manages and administrates its federal leasing program,” emphasized Barron. In violation of the Freedom of Information Act and the Department of Interior’s controlling regulations, BLM has ignored Western Energy Alliance’s requests for documents that might allow stakeholders to assist BLM in planning and conducting lease sales in a manner that accounts both for BLM’s limited resources and the agency’s legal responsibilities. “When it comes to lease sales, BLM has coordinated regularly with environmental lobbyists, but remains unwilling to share any information with the independent producers that serve as BLM’s partners in responsible energy development,” observed Barron.

EDITOR’S NOTE: BakerHostetler attorneys Mark Barron and Alex Obrecht are handling the lawsuit challenging BLM’s administration of oil and gas lease sales. For more information about that suit or other Energy inquiries, please contact them or members of BakerHostetler’s Energy team.

A copy of the complaint that BakerHostetler filed in the United States District Court for the District of New Mexico is available here.

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About BakerHostetler
Celebrating the 100th anniversary of its founding this year, BakerHostetler is a leading national law firm that helps clients around the world to address their most complex and critical business and regulatory issues. With five core national practice groups – Business, Employment, Intellectual Property, Litigation, and Tax – the firm has more than 940 lawyers located in 14 offices coast to coast. Recognized for its role as court-appointed counsel to the Securities Investor Protection Act (SIPA) Trustee in the recovery of billions of dollars in principal lost in the Ponzi scheme perpetrated by Bernard L. Madoff, BakerHostetler is widely regarded as having one of the country’s top 10 tax practices, a nationally recognized litigation practice, an award-winning data privacy practice and an industry-leading business practice. For more information, visit bakerlaw.com.

Contact:

Tracy Hager, 303.764.4090 (thager@bakerlaw.com), or Stephanie Moore, 216.430.2939 (semoore@bakerlaw.com)

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