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Settlement jeopardizes nearly all Trump-era oil and gas leases in Wyoming

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True Drilling Rig No.38

Richard Tucker works on True Drilling Rig No. 38 on March 18 outside of Glenrock. Wyoming producers are trying to ramp up production as oil prices rise, but they are running into obstacles.

The Biden administration will redo the environmental review of more than 2,000 Wyoming oil and gas leases sold between 2015 and 2020 — including virtually all of the leases issued under former president Donald Trump — in accordance with a trio of settlement agreements approved Wednesday by a federal judge.

None of the leases have been vacated, but their future is uncertain. The Department of the Interior now has to reevaluate and retroactively justify more than two dozen lease sales. If it decides it can’t, or its reasoning doesn’t satisfy the court, the sales could be reversed and any existing permits revoked.

Jeremy Nichols, climate and energy program director for plaintiff WildEarth Guardians, said the decision was unprecedented.

“This is getting to the heart of the federal oil and gas program,” Nichols said. “The question here will be not whether it’s OK to lease in the Red Desert or the Powder River Basin, but whether the federal oil and gas program even makes sense in the midst of the climate crisis.”

Industry responded by asking Congress to play a greater role in decisions affecting the energy sector.

“Backroom court settlements like this, negotiated by the Biden Administration and its anti-domestic oil and gas allies, will continue to decide the fate of Wyoming’s primary economic driver until Congress reasserts its control and establishes a coherent national energy policy,” Ryan McConnaughey, communications director for the Petroleum Association of Wyoming, said in an emailed statement.

WildEarth Guardians and several other environmental groups filed three lawsuits against the interior department, in 2016, 2020 and 2021, challenging the climate analysis for a total of nearly 4 million acres leased for oil and gas development across Wyoming, Colorado, Montana, New Mexico and Utah.

Close to 2.5 million of those leased acres — more than 3,500 square miles — are located in Wyoming.

U.S. District Judge Rudolph Contreras ordered the department in 2019 to reassess some of the Wyoming leases. A year and a half later, he declared the agency’s second attempt inadequate.

Around the same time, the interior department acknowledged “the same sort of deficiencies” in subsequent sales’ climate analyses, said Kyle Tisdel, senior attorney and climate and energy program director for the Western Environmental Law Center, another plaintiff.

If the agency wants future lease sales to hold up in court, Tisdel said, its climate analysis will have to meet the higher bar the cases have established. Federal attorneys have cited Contreras’ decisions and other, similar rulings to explain why it took the Biden administration more than a year to complete the review process for its first round of onshore lease sales.

Wyoming’s first Biden-era sale is scheduled to offer 129 parcels, spanning about 130,000 acres, later this month.

The interior department agreed in March, shortly before announcing the upcoming sale, to reassess the climate impacts of most of the disputed Obama-era and Trump-era sales, including all 16 held in Wyoming. Contreras upheld the deal on Wednesday. Some of the affected leases have already been invalidated by other federal courts over environmental concerns: In March, a Montana judge threw out 193 Wyoming leases sold in December 2017 and March 2018 after finding that the interior department didn’t adequately consider threats to sage grouse.

In the cases before Contreras, the environmental groups argued, successfully, that the National Environmental Policy Act (NEPA) requires the department to assess the “direct, indirect and cumulative effects” that new leasing would have on the environment and the climate. But the oil and gas industry thinks that’s an inaccurate interpretation of the landmark 1970 legislation, which doesn’t mention climate change.

Many in the industry feel unfairly targeted by the pause on new leasing and other executive actions aimed at lowering emissions.

“Some groups will not be satisfied until NEPA is twisted into a law unrecognizable to its drafters, used to halt all mineral resource production in Wyoming,” McConnaughey said.

Meanwhile, now that the settlement is finalized — surviving an attempt by the American Petroleum Institute to have the case dismissed over questions about jurisdiction — WildEarth Guardians sees this as the Biden administration’s chance to follow through on its climate commitments.

“I think, to the extent that they decide to uphold prior leasing decisions, they’re going to have their work cut out for them,” Nichols said. “They have a high bar, and we’re going to hold them to that high bar.”


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