3:27pm

Thu January 19, 2012
Environment

Denver Court Considers Oil and Gas Leases Near Utah Parks

A federal court in Denver Thursday heard oral arguments in an appeal by the oil and gas industry over dozens of disputed leases near national parks and monuments in Utah and Colorado.  Shortly after taking office in 2009, Interior Secretary Ken Salazar revoked many of the leases that were issued in the late hour of the Bush Administration.  It’s the latest clash between the Obama Administration and western oil and gas companies.

Eco-Activism

The case is probably best known for some of the drama that unfolded leading up to it.  In December of 2008, University of Utah student turned eco-activist Tim DeChristopher posed as a bidder at Bureau of Land Management auction, driving up the cost of the disputed leases by making bid after bid.

DeChristopher had no intention of actually paying for the leases, and was later convicted of making false statements at a government auction.

Nevertheless, he quickly gained a cult status and drew a lot of attention to what had appeared to be a late-hour move by President George W. Bush to lease famed lands near Utah's famed Arches and Canyonlands national parks as well as Desolation Canyon and Colorado’s Dinosaur National Monument. 

Just weeks after President Obama took office, his Interior Secretary Ken Salazar revoked 77 of the disputed leases, a move that was upheld by a Utah District Court on a technicality. 

Kathleen Sgamma, director of government affairs with the Denver-based Western Energy Alliance, which filed an amicus brief to the appeal of that ruling, says the move set a dangerous precedent.

"If the Secretary is able to go in after the fact and just cancel leases, despite holding an auction and entering into a contract with the company, then there’s quite a lot of uncertainty in that federal process," Sgamma says.

But oral arguments before the three-judge appeals panel Thursday in Denver centered not on the merits of Salazar’s move, but rather a technicality.  That was whether or not the oil and gas industry’s lawsuit against the Secretary was filed within a 90-day window for appeals, and before the statute of limitations ran out. 

It’s worth noting that the judge in the lower Utah court did scorn the actual revoking of the leases; a signal that regardless how the 10th Circuit ultimately rules on the technicality, this case could be far from over. 

Fight Only Beginning

Outside the courthouse after the hearing, Robin Cooley, an attorney with Earth Justice in Denver, pledged that conservation groups are ready for a prolonged fight.  She said new administrations often reverse course from previous ones.  

"Secretary Salazar came in and recognized that there had been huge problems with this lease sale," Cooley says. "It was rushed, there were problems with the environmental analysis, they hadn’t adequately consulted with the park service."

Cooley said a lease bought at a federal auction doesn’t automatically give a green light to drilling. 

The Interior Department did refund the money to oil and gas companies, but that didn’t seem to heal many of the bruises.  Industry leaders argue the abrupt revoking of the leases set a bad precedent, and created an uncertain business environment for the companies. 

Kathleen Sgamma of the Western Energy Alliance says a few dozen leases may not seem like much in the bigger picture. But companies such as Impact Energy, which filed the suit, had invested a lot of money in the area.

"These leases are miles away from national parks," Sgamma says. "They were analyzed over a seven year period and determined to be suitable for oil and gas development, and by the way, none of these lands were new, they were opened before under the Clinton Administration."  

But a closer analysis reveals that at least one lease was within three miles of the western boundary of Arches National Park.  And several more were issued within proposed wilderness areas, or wilderness study areas.

Earth Justice’s Robin Cooley says many of the areas are simply too environmentally sensitive. 

"This was the last lease sale of the Bush Administration, and they were auctioning off lands that are outside of some of our premier national parks," Cooley says. "These were not lands that should have ever been auctioned off." 

It’s not clear when the three-judge panel will issue its ruling following Thursday's oral arguments, but attorneys on both sides expect it won’t be for several more months.

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