LANDER - Wyoming Gov. Dave Freudenthal is once again calling on federal lawmakers to rework a rule that lets agencies bypass painstaking environmental studies in order to fast-track oil and gas drilling.

Freudenthal doesn't want the rule eliminated; he simply wants it revised, said Ryan Lance, the governor's deputy chief of staff.

"We're going to be active in making sure this is remedied," Lance said. "We've offered specific language to Congress and the energy companies to change this several times over the last few years."

The Government Accountability Office, which is the investigative arm of Congress, sent auditors to Utah last week - and tentatively plans to have personnel in Wyoming by the end of this month - to examine the way the BLM has implemented a legal, but relatively new tool to exempt some oil and gas drilling from environmental review.

Bureau of Land Management officials said they welcome the audit and look forward to accommodating the investigators. Conservation organizations, however, argued last week the congressional investigation indicates that at least some members of Congress believe the BLM has misused these tools.

At issue is a version of what's called a "categorical exclusion," which, in this case, allows land managers to skip in-depth environmental reviews for individual oil and gas drilling projects in areas where three wells have already been drilled, and where a previous environmental analysis was conducted within the past five years.

The Pinedale region, for which the BLM will soon release a new, overarching resource management plan, fits that description. So, individual leaseholders in the region near the Pinedale Anticline and Jonah natural gas fields will once again be able to apply for categorical exclusions. And as long as they're not planning to drill near a sage grouse breeding ground, for example, they're likely to have the applications approved, Lance said.

This type of categorical exclusion was established in 2005, when Congress and the Bush administration wanted to ramp up domestic energy development. The idea was to remove unnecessary or redundant hurdles to production that many lawmakers and industry advocates believed were wastefully bogging down the permitting process.

In the Energy Policy Act of 2005, Congress included five new categorical exclusions, including this one, which Freudenthal believes to be poorly drafted.

The Cowboy State governor has fought, since just following the bill's passage, to have this exclusion rewritten, because it fails to account for the cumulative impacts of hundreds of categorically excluded rigs, he argues.

The reason the BLM does not consider the cumulative impacts of these exclusions, Lance said, is that the federal energy policy calls for each application to be reviewed on its own merits, without consideration of all of the other wells that are being drilled, or are about to be drilled, in the same area.

Even though companies such as Ultra, Shell and Questar, for example, have worked with the BLM to create a more environmentally friendly approach to developing the Pinedale Anticline, and will spend millions of dollars to implement the plan to reduce air emissions and protect wildlife, other leaseholders in the same general area - "right next door," Lance said - will now be able to come in and drill under categorical exclusions. That's because the overarching Pinedale resource management plan will be new and in place.

These leaseholders will not be held, potentially, to the same standards as the larger producers, he said.

How it works

Pretend you're an oil and gas developer, Lance said. You have all of your permits from the Wyoming Department of Environmental Quality and from the Wyoming Oil and Gas Conservation Commission, and you have all of the stipulations attached to the permits from the Game and Fish Department:

"We know that you emit one ton of (oxides of nitrogen), one ton of (volatile organic compounds) and, looking at that one well, you've met all of those permitting restrictions," Lance said. "That one well in itself doesn't have any impact, really, on the environment. The (air pollution) is negligible. Everything is OK, so we 'cat-ex' your well. But then you go 10 feet away, and get a cat-ex for the same thing again. By the time we've done this 40 times, we have 40 tons of NOX, 40 tons of VOCs and antelope crucial parturition now has 40 rigs in the middle of it - and that's just one company."

So, the governor is worried about the cumulative impact of all of these categorical exclusions, he said.

In a place such as Pinedale, for example, where the region has already experienced unhealthy and potentially poisonous levels of ozone pollution in recent winters, these kinds of categorical exclusions could potentially work to undo much of the emissions reductions and wildlife protections that will be achieved by Ultra, Shell and Questar on the Pinedale Anticline in the coming years.

Keep the rules, industry says

Cheryl Sorenson, vice president of the Petroleum Association of Wyoming, said her group believes the categorical exclusions should be maintained as written, because they are "necessary" to developing minerals in existing oil and gas fields.

The law ensures that companies must comply with what are called "best management practices" and in accordance with existing land use plans, Sorenson argued.

"Any operator using a categorical exclusion in the state of Wyoming will have to follow all of the strict guidance in place in that field," she said. "Companies routinely use categorical exclusions from an existing (environmental review) to make full use of (that review) to prevent wasting valuable time and money on these documents that routinely cost well over a million dollars and take years to complete."

Lance said the governor is not worried about operators drilling under field-level plans, like those established in the Jonah and Pinedale Anticline project areas. Rather, it's the categorical exclusions that will be granted simply because an overarching resource management plan for a region has been drawn up.

"The main concern is not at (the field level)," Lance said. "We see that as smart, it makes sense. But when you don't have that - when you assume you do, but you don't, at the RMP level - that's when we get very nervous."

The real worry, Lance said, is now that the BLM has approved the new Casper region overarching plan, is revising similar plans for the Powder River Basin, Lander and Big Horn Basin, and will soon approve new overarching plans for Rawlins and Kemmerer - the 1,600-plus categorical exclusions that have been issued so far will be dwarfed by what's about to come.

"We're worried that you haven't seen anything yet," Lance said. "But we're hopeful that a statutory change to make (the law) more reasonable will come about from (the ongoing investigation)."

Emily Fisher, spokeswoman for Questar Exploration and Production Co., said Questar, along with Ultra and Shell, made voluntary mitigation and development commitments as part of the new, 2008 Pinedale Anticline field development plan, which will govern how the companies develop the field. And she indicated Questar expects that other producers in the area will be required to make the same types of commitments, even if they are categorically excluded from environmental review.

"We know the agencies recognize these commitments and anticipate, as they manage the state's natural resources, that they will hold all operators to roughly similar standards and practices where feasible," Fisher said. "Questar would agree that if the purpose of a (categorical exclusion) prevents redundant analysis from being conducted, then the streamlining purpose saves both time and money and still provides the same level of environmental protection."

Representatives with the BLM's Pinedale field office were unavailable for comment Tuesday, but agency spokeswoman Theresa Howes indicated last week that BLM officials believe they've been implementing the will of the Congress by granting categorical exclusions where appropriate.

According to the Bureau of Land Management, 1,632 permits to drill were approved in Wyoming under categorical exclusions from August 2005 to September 2007. Of those, 788 were issued by the Pinedale office and 353 in Buffalo.

Wyoming had the most rigs operating under categorical exclusions of all Rocky Mountain states since the inception of the 2005 law.

From 2005 to September 2007, 1,065 were approved in New Mexico, 632 in Utah, 221 in Colorado and 51 in Utah.

Environment reporter Chris Merrill can be reached at chris.merrill@trib.com or at (307) 267-6722.

* Last we knew: Congress is investigating the way the Bureau of Land Management has bypassed environmental studies in order to fast-track thousands of oil and gas drilling permits since 2005.

* The latest: The governor's deputy chief of staff on Tuesday said the federal law that allows for these fast-tracked projects needs to be revised.

* What's next: Congress tentatively plans to have investigators in Wyoming by the end of this month.]]->