Feds, oil companies defend oil leases on sage grouse habitat

(CN) — Conservationists on Wednesday again faced off with the federal government and oil companies over leasing decisions on imperiled sage grouse habitat — the latest step in a long-running environmental case.

At issue in this phase of the litigation is the Bureau of Land Management’s decision regarding six lease sales in Montana and Wyoming covering over one million acres.

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

“The sales all flow from BLM’s unlawful interpretation of the prioritization requirement, including as manifest in the 2018 instruction memorandum, which relegated BLM to a passive administrator of the leasing process and did nothing to guide or encourage leasing away from sage grouse habitat,” Sharmeen Morrison, attorney with Earthjustice, argued.

The conservation groups challenged Trump administration policies that removed protections for greater sage grouse. The bird species is native to the western U.S. and Canada and has been in decline for decades due to habitat loss.

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 revised the documents to include the changes to resource constraints and public comment periods.

In the seven years since the case was first filed, 10 appeals have been opened in the Ninth Circuit regarding various court decisions largely pertaining to the vacatur of certain lease sales in Wyoming and Montana. The most recent decision from the Ninth Circuit held that the Bureau of Land Management violated its own plans to protect sage grouse and found that the Montana federal court properly vacated a Wyoming lease sale.

Referencing the recent Ninth Circuit decision, the conservation groups argued to U.S. District Judge Brian Morris the holding means the Bureau of Land Management must take affirmative action to guide and encourage oil and gas leasing away from sage grouse habitat.

In five of the lease sales, the agency “passively agreed to lease virtually every parcel companies nominated without regard to how it impacted sage grouse habitat,” Morrison argued.

But the agency disagreed.

“Plaintiffs argue that BLM should have done more, but at a certain point, BLM must have some discretion to interpret its own management plans and what is sufficient to comply with them,” Luther Hajek with the Department of Justice said.

The agency argued it reviewed each parcel for potential impacts to sage grouse and removed parcels where oil and gas development may result in significant impacts to the birds and their habitat. Plus, the agency cannot know at the leasing stage which parcels may be developed and can’t forecast every potential harm.

The agency argued that should Morris, a Barack Obama appointee, find in the conservation groups’ favor, the court should not vacate the leases but instead remand.

Vacatur would require the return of over $109 million in bonus bids and leasing filing fees, Hajek said.

The Bureau of Land Management last year attempted to voluntarily remand its decisions for the six Montana and Wyoming lease sales, but Morris denied that motion.

The federal government also accused the conservation groups of waiting too long to challenge the leasing decisions, which were made in 2019 and 2020, resulting in oil and gas companies making substantial investments in the leases.

The oil and gas companies that intervened in the case as defendants agreed with this argument.

“Remand is warranted in this phase because the disruptive consequences, both the economic and the environmental, are much greater than in phase one,” said Malinda Morain, attorney with Beatty & Wozniak representing Western Energy Alliance.

Continental and Chesapeake argued the conservation groups don’t have standing to bring the challenge in the first place.

“They can’t just say that oil and gas generally harms our interest,” William Sparks, attorney with Jones Walker, said.

Wyoming also intervened as a defendant and argued the court should consider how the state would be impacted if the leases were vacated.

“The loss of over $50 million in revenue, which has already been spent for public use, will be a disruptive consequence for the state,” Shannon Leininger with the Wyoming Attorney General’s Office, said.

But the conservation groups stressed that the economic impacts are only greater in this phase of the litigation because it concerns more leases sold in sage grouse habitat than the leases involved in earlier phases of the case.

“The seriousness of BLM’s legal violations were much more significant in phase three than in phase one, and the harms to sage grouse from those leases are much greater in phase one and phase three,” Michael Freeman, Earthjustice attorney, argued.

Morris said he hopes to have an opinion out before the end of the month.