Federal administrative judges have thrown out the Bureau of Land Management's approval of a significant natural gas development project in Sublette County, a decision that Jonah Energy says raises concerns about the future of oil and gas in Wyoming.
The federal Interior Board of Land Appeals (IBLA) on Tuesday vacated the 2018 Record of Decision for the Normally Pressured Lance Project, which would have authorized up to 3,500 wells on 141,000 acres west and south of the existing Jonah Field, halfway between Pinedale and Rock Springs.
"The impact to Wyoming is severe," said Paul Ulrich, vice president at Jonah Energy. "Vacating this decision — and thus vacating our ability to develop a 3,500-well project that is the future of natural gas in Wyoming.”
The judges objected to how BLM handled emissions from Jonah Energy's portable drill rigs in its Clean Air Act conformity analysis.
Jonah Energy had voluntarily obtained air permits from the Wyoming Department of Environmental Quality for its drill rig fleet — permits that weren't legally required.
"This decision stems from our voluntary commitment to obtain permits from the state of Wyoming that weren't legally required because we felt it was the right thing to do in demonstrating that we were serious about reducing our emissions," Ulrich said.
"And these types of efforts should be rewarded, certainly not contorted into a legal liability,” he added.
Ulrich said the company has worked for years to reduce emissions, earning a Level 5 gold standard rating from the Oil and Gas Methane Partnership 2.0, which he described as the most comprehensive emissions reporting and reduction framework in the global oil and gas industry.
"I'm very proud of what Jonah's been able to accomplish the last decade in our emission reductions," Ulrich said. "It's led us to be one of the leaders globally in the industry."
State Authority
Beyond the immediate project, Ulrich said the decision undermines Wyoming's authority to manage air quality within its own borders.
"I would expect the state of Wyoming is going to take this decision very seriously, as they should," he said.
The Jonah Field proper is nearing the end of its development life, Ulrich said, making the Normally Pressured Lance Project critical to the company's path forward.
"Our future was NPL," he said. "I can't overstate how damaging this could be for the future of the oil and gas industry in the state."
Environmental Victory
WildEarth Guardians, which brought the seven-year legal challenge, celebrated the ruling.
"This decision prevents even more fracking from compromising public lands in Wyoming," said Rebecca Sobel, climate and health program director at WildEarth Guardians. "The Clean Air Act is a key safeguard for public health and the environment.
"The board's ruling shows that federal agencies can't ignore the laws that protect our communities."
In a statement following the ruling, WildEarth Guardians asserted that the Upper Green River Basin has repeatedly violated federal ozone health standards since 2005, with oil and gas activities identified as the dominant source of ozone-forming pollution in the region.
"This outcome sends a clear message to the Trump administration that agencies cannot sidestep bedrock environmental laws to fast-track fossil fuel extraction on our public lands," Sobel added.
Judges' Reasoning
Administrative IBLA Judge David Gunter, writing for the two-judge panel, found that BLM improperly excluded emissions from Jonah Energy's portable drill rigs.
BLM had relied on an exemption for sources covered by New Source Review permits, a Clean Air Act program that requires new or modified industrial facilities to install pollution controls.
The regulations exempt "stationary sources that require a permit under the new source review program," the decision states.
But because drill rigs move between well sites, they don't qualify as stationary sources, regardless of whether they hold such permits. the ruling says.
"This unambiguous language contains no indication that these two requirements are disjunctive; both conditions must be met for emissions from a particular source to be exempt from the conformity analysis," the judges wrote. "Because Jonah Energy's drill rigs are not 'major or minor new or modified stationary sources,' they must be included in BLM's conformity analysis."
The judges noted that whether Jonah Energy was required to obtain a state permit or voluntarily sought one made no difference to their analysis.
What's Next
Only 14 wells have been drilled under the project since its 2018 approval, with five additional permit applications pending.
Ulrich said the company is evaluating all options, including asking the IBLA to give the situation another look.
"We're looking at all of our legal options, up to and including asking the IBLA to reconsider this broad-brush decision," Ulrich said. "We fully expect the BLM and the state of Wyoming to follow suit."
He criticized the judges for vacating the entire decision rather than sending specific issues back to the BLM for correction.
"A more reasonable path would have been to remand this portion of the decision for reanalysis to the BLM," Ulrich said. "I'm very confident in BLM's ability to answer this effectively and work with us and work with the state of Wyoming."
David Madison can be reached at david@cowboystatedaily.com.
