Federal judge tosses oil leases on sage grouse habitat

(CN) — Conservationists largely prevailed in the latest phase of a long-running environmental suit over oil leasing decisions on imperiled sage grouse habitat after a federal judge in Montana vacated the bulk of the challenged lease sales.

“The cumulative effects of the flawed issuance of the Phase Three lease sales may harm sage grouse and plaintiffs as a result,” U.S. District Judge Brian Morris wrote in a 44-page opinion.

At issue in this phase of the litigation is the Bureau of Land Management’s decision regarding six lease sales in Montana/Dakotas and Wyoming dating back to 2019 and 2020.

The conservation groups — Montana Wildlife Federation, The Wilderness Society, National Audubon Society, National Wildlife Federation and Montana Audubon — argued the decision violates the Federal Land Policy and Management Act.

The act bars the agency from taking actions “inconsistent with the provisions of a land use plan.”

In 2015, the Bureau of Land Management first amended several of its land use management plans to promote the birds’ recovery. Three years later, under the Trump administration, the bureau issued a new memo instructing staff to disregard the earlier plan’s prioritization requirements for fluid mineral leasing in sage grouse habitat.

The Ninth Circuit, in earlier phases of the litigation, affirmed the lower court’s determination that the agency’s 2018 memo is inconsistent with the earlier plan.

Morris found again that lease sales issued under the latter plan violate the Federal Land Policy and Management Act because they don’t implement the prioritization requirement.

“Following the Ninth Circuit’s holding, the Phase Three lease sales suffer from similar infirmities as the Phase One and Phase Two lease sales,” Morris wrote.

The defendants, which include federal agencies as well as multiple oil and gas companies that intervened in the suit, argued that prioritization “only seeks to channel [BLM’s] discretion into a certain procedural sequence that may minimize the impact on sage grouse populations.”

But Morris noted the Ninth Circuit already rejected that argument. The defendants also argued placing stipulations on the leases would fulfill the requirement of the 2015 plan, but that, too, has already been rejected by the appeals court.

“The Phase Three lease sales failed to incorporate the 2015 plans’ prioritization requirement. As a result, the 2019 Wyoming lease sales and the Montana Dakota lease sales violated [the Federal Land Policy and Management Act],” Morris wrote.

In the 2019 Wyoming lease sales, the agency offered over 1.25 million acres of oil and gas leases.

“Most of the parcels offered by BLM included lands in [priority habitat management areas] and general habitat management areas,” Morris wrote.

The agency offered over 185,000 acres in the Montana and Dakotas lease sales, with many including parcels located in habitat management areas.

“Similar to the 2019 Wyoming lease sales, BLM failed to implement the prioritization requirement in offering the Montana and Dakota lease sales,” Morris wrote. “BLM again failed to defer the March and December 2019 Montana and Dakota lease sales based on the prioritization requirement.”

The agency did defer 17 parcels in the sales, but not for prioritization reasons. Rather, it deferred the parcels based on public comments, raising concerns about the potential effects on various resources.

“​​As the Ninth Circuit recognized, to defer parcels for alternative reasons ‘does not demonstrate compliance’ with the prioritization requirement,” Morris wrote.

The federal defendants contended that vacatur of the leases would require a return of $109 million, and the amount at issue warrants remand without vacatur, but Morris did not agree.

“Remand with vacatur remains the necessary remedy to allow BLM to fix its serious errors that occurred at the beginning of the leasing process,” Morris wrote, explaining the agency’s errors outweigh the disruptive effects vacatur may have on surrounding parcels.

The only way the agency can correct its errors is to redo the lease sales from the beginning, operating under the rules of the 2015 plan, Morris concluded.

However, Morris declined to vacate every single lease. There was a delay in the conservation groups’ challenge to the leases at issue in Phase Three, resulting in several leases being developed and brought into production. In nine leases, drilling has already occurred, and the defendants argued the surface disturbance can’t be undone or unraveled to restore the status quo, like non-producing leases.

“​​The considerations of equity require that the court not vacate the nine already producing leases stemming from the challenged Phase Three lease sales,” Morris wrote. “The court finds, however, that the minimal number of producing leases in comparison to the thousands of non-producing leases does not weigh in favor of the court remanding without vacatur all the challenged Phase Three lease sales.”

Morris also excluded the 2020 Wyoming lease sales since there was no final agency action to vacate or remand.

The conservation groups celebrated the court’s order.

“This victory keeps iconic great sage grouse habitat protected and free of oil and gas drilling, as it should be,” Ben Tettlebaum, acting senior legal director with The Wilderness Society, said in a statement. “The administration wants to lease every corner of our national public lands to the oil and gas industry, but today’s important decision defends our freedom to enjoy public lands that the sage grouse calls home.”

The Bureau of Land Management declined to comment on ongoing litigation, and none of the remaining parties responded to a request for comment before press time.