Oil and gas trade groups sue BLM over “deficient” final leasing rule

(WO) – The Western Energy Alliance, the Independent Petroleum Association of New Mexico, New Mexico Oil and Gas Association, North Dakota Petroleum Council, Petroleum Association of Wyoming, and Utah Petroleum Association filed a lawsuit challenging the Bureau of Land Management’s (BLM) Fluid Mineral Leases and Leasing Process rule in the U.S. District Court for the District of Wyoming.

The leasing rule’s impact will deter development of federal oil and gas, disproportionately affect small companies, effectively close eligible and available lands to new leasing, and violate BLM’s duty to promote oil and gas development as a multiple use of federal lands.

Because the rule is procedurally deficient, arbitrary and capricious, and contrary to law, the associations ask the court to invalidate and vacate it. The associations are represented by Alexander K. Obrecht, Mark S. Barron, and L. Poe Leggette of Baker & Hostetler LLP.

“BLM issued a final rule that prices small producers out of the market and off public lands,” said Kathleen Sgamma, president of Western Energy Alliance. “The bonding amounts are excessive when there are just 37 orphan wells out of more than 90,000 wells on federal lands. Increasing bonding amounts 20-fold in order to take care of a problem on just .04% of wells is way out of proportion.

“Companies are already responsible for reclaiming wells, and one of the primary reasons there are so few orphan wells on federal lands is because our members clean up old wells even when they weren’t the party that abandoned them in the first place. This is another rule by the Biden Administration meant to deliver on the president's promise of no federal oil and natural gas. We’re pleased to be joined by our sister trade associations in challenging a rule that has such a detrimental economic impact in states across the West.”