Recent moves by the U.S. Department of the Interior will level the playing field between states like Wyoming, where energy development happens mostly on public land, and “private land” states like Texas, Oklahoma and Louisiana, where energy producers say the leasing process is less hindered by lengthy environmental impact studies.
DOI announced on April 10 it will no longer require the Bureau of Land Management to prepare environmental impact statements for approximately 3,224 oil and gas leases across seven Western states.
That’s a welcome change, said Landman Steve Degenfelder with Kirkwood Oil and Gas in Casper.
Companies like Kirkwood, Degenfelder told Cowboy State Daily, see the move as a way for the BLM to streamline the initial leasing stage of project development.
"Environmental groups have really pushed for a NEPA (National Environmental Policy Act) analysis done on every lease that is offered, knowing that it just ties everything up," said Degenfelder. "Why would you not want to lease everything? And then when an activity like drilling a well is proposed, then you can conduct the NEPA analysis."
In a statement, DOI stated it is, “evaluating options for compliance with the National Environmental Policy Act for these oil and gas leasing decisions.”
Degenfelder thinks that means the BLM will wait until there’s a plan to drill before doing a NEPA analysis of future leases.
But the BLM’s future intentions remain undefined.
BLM Spokesperson Brian Hires told Cowboy State Daily, “The BLM is currently in the process of determining our options for NEPA compliance for these leases and will announce them when we have that information.”
Historically, said Degenfelder, about 10 percent of leased parcels see drilling activity.
"I think that's what they're saying is that for leasing, the BLM is not going to prepare an environmental document right now," Degenfelder said. "And then when an activity is proposed, it might be quickly, it might be 10 years from now... then you would prepare the NEPA document."
Degenfelder highlighted how regulatory hurdles have created competitive disadvantages for states with significant public lands compared to states where production occurs primarily on private lands.
“When they're arguing at the board table for budgets, to deploy investment capital, (operators on public land) cannot give management a clear pathway to deploy that capital. Whereas the private land states can," Degenfelder said.
That's why Wyoming hasn't returned to its pre-COVID rig counts like the Permian Basin has, or other parts of Texas or Louisiana.
Across The West
The recent DOI directive to the BLM involves leases covering approximately 3.5 million acres in Colorado, Montana, New Mexico, North Dakota, South Dakota, Utah and Wyoming.
According to the Interior Department, the action supports the policy direction of Executive Order 14154 and Secretary's Order 3418, both titled "Unleashing American Energy," by reducing regulatory barriers and expediting domestic energy development.
When asked about how the announcement will impact leases in Wyoming, Hires, BLM’s spokesman, directed Cowboy State Daily to a 2022 “Analysis for Greenhouse Gas Emissions Related to Oil and Gas Leasing in Seven States from February 2015 to December 2020.”
This document showed Wyoming held the largest share of oil and gas leases slated for environmental analysis before that requirement was lifted.
It included 2,147 leases covering approximately 2,247,292 acres. These leases resulted from multiple BLM lease sales between February 2015 and December 2020. The document shows estimated potential development of 7,907 wells across these leases.
The greenhouse gas (GHG) emissions analysis for Wyoming — according to the BLM — showed leases in the state represented the largest share of potential GHG emissions among the seven states analyzed. The social cost of greenhouse gases associated with these emissions ranged from approximately $5 billion to over $203 billion.
But with the recent order from the DOI, federal agencies continue to de-emphasize environmental analysis and climate change initiatives.
Environmental Groups Respond
What are the social costs of greenhouse gases? This refers to the monetary estimate of the economic damages associated with emitting greenhouse gases into the atmosphere. It's a measure designed to financially quantify the long-term economic harm caused by these emissions.
WildEarth Guardians and the Center for Biological Diversity, which have pursued litigation over BLM leases, want to see GHG monitoring and costs remain part of the leasing process.
Jeremy Nichols, senior advocate Center for Biological Diversity, said it's too early to tell whether the BLM will change its approach to NEPA analysis when it comes to leasing parcels of public land for oil and gas development.
“There's been no decision to waive environmental reviews of leasing,” said Nichols. “Interior announced it was abandoning earlier plans to prepare an environmental impact statement specifically over millions of acres of leasing in western states that were successfully challenged in court.”
Nichols stated he believes the Interior Department still acknowledges it has a duty to account for the environmental impacts of these leases.
“Courts have consistently upheld that because leasing conveys a right to drill, environmental reviews must be done before leasing, essentially cementing in place the common sense ‘look before you leap’ principle,” said Nichols. “We're weighing our options, but we certainly won't let this administration turn its back on legal commitments and on protecting Wyoming's public lands from unchecked oil and gas extraction.”
David Madison can be reached at david@cowboystatedaily.com.
