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OIL AND GAS

Less than half of proposed Wyoming oil and gas leases recommended for upcoming sale

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Wold Drilling

A Wold Energy Partners oil well beneath a drilling rig outside of Rolling Hills as viewed from an opening in the storage room in October 2017. Less than half of the proposed Wyoming oil and gas leases that were considered for an upcoming sale are eligible, federal officials say.

Of the 459 Wyoming parcels being considered for the upcoming federal oil and gas lease sale, just 195 are eligible to be sold, officials said Monday.

The lease sale is scheduled for the first quarter of 2022. It will be held more than a year after President Joe Biden’s Jan. 27 executive order suspended new oil and gas leasing on federal lands, and more than six months after a U.S. district judge ordered the Bureau of Land Management (BLM) to resume quarterly lease sales.

All of the 459 potential leases were originally proposed for the canceled March and June sales. The agency published the full list on Aug. 31, and took public comment from Sept. 1–Oct. 1.

After reviewing public comment and completing an environmental assessment for the state’s nominated lands, the agency deferred 264 Wyoming parcels from the sale, largely due to concerns about disturbing priority sage grouse habitat.

In a separate announcement Friday, the BLM also cited “insufficient environmental analysis” as a reason for deferring some parcels.

The BLM already conducts environmental assessments for proposed leases to determine impacts that drilling could have on air and water quality, wildlife habitat and surrounding communities. But federal courts have blocked several recent oil and gas lease sales, citing inadequate review of their impacts on climate change.

On Friday, the agency said that it would begin evaluating greenhouse gas emissions as part of its oil and gas leasing program, starting with the upcoming sale. In addition to considering the social cost of carbon as part of its environmental analysis, it created a lease sale emissions tool and issued its first annual report on the greenhouse gas emissions of the federal mineral leasing programs.

The announcement precedes a comprehensive review of the oil and gas leasing program by the Department of the Interior, which was expected to come out in early summer, but has yet to be released.

A win for environmental groups like WildEarth Guardians, which have repeatedly, and successfully, challenged the leasing review process, the modification comes as world leaders gather at the 2021 United Nations Climate Change Conference, or COP-26, to update their climate commitments in response to increasingly dire projections.

In the greenhouse gas report’s state-by-state emissions breakdown, Wyoming sits at the top. The state contributes more than half of total federal emissions from fossil fuel production.

“Sitting here in Wyoming, it’s an important step for us to understand the consequences of what goes on here, and how we can better account and address the impacts that we contribute to climate change,” said Shannon Anderson, staff attorney for the Powder River Basin Resource Council.

But the changes to the review process frustrate the state’s embattled oil and gas industry. Shaken by pandemic-driven price swings, unsettled by the shifting regulatory landscape and angered by Biden’s efforts to expand international oil production while restricting federal leasing, many in the industry see reviewing greenhouse gas emissions as yet another attempt to hamstring domestic oil and gas production.

“It is clear that the BLM is continuing its efforts to make public lands energy development as expensive and difficult as possible,” Pete Obermueller, president of the Petroleum Association of Wyoming, wrote in an email to the Star-Tribune.

The Biden administration is required to hold lease sales by the June preliminary injunction. The judge didn’t specify how many parcels needed to be sold, enabling the agency to exercise discretion over the total number of lease offerings.

Steve Degenfelder, land manager for Kirkwood Oil and Gas, described the additional climate analysis as an unfairly restrictive practice that singles out the oil and gas industry.

“It’s just another effort to bring everything to a screeching halt,” he said. “Maybe you’re not going to stop a lease sale, but you’re going to certainly decrease the number of tracts offered, and increase the time that they’re evaluated.”

So far, nothing is finalized. The BLM opened another 30-day public comment period on its environmental assessment, noting that it may defer additional parcels after public comment closes.

It’s not yet clear how, or how significantly, the agency’s analysis of greenhouse gas emissions will affect lease sales.

“The National Environmental Policy Act requires good analysis,” Anderson said. “It doesn’t necessarily drive decisions one way or the other. That will be left to the BLM decision-makers.”

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