American Oil and Gas Reporter - January 2012 - 242

powerful tools in defeating harmful government policies has been reaching out to
a broad array of stakeholders using the
Blueprint to spread positive messages
about our industry. The Alliance has embarked on an aggressive strategy of outreach to federal, state and local policymakers; civic and business groups; academia; media; and other industries across
the nation, using Alliance members as
"ambassadors" to help spread the message
of the West's energy potential.
The Alliance continues to make real
progress in setting the record straight
and tackling the long-standing misperceptions about industry that are especially evident in the West. Our strategy corrects misinformation and highlights the often-overlooked benefits our industry provides, such as clean and affordable domestic energy, tax and royalty revenue, and
jobs. Since releasing the Blueprint, the Alliance has reached more than 12,000
stakeholders.
In recent years, the Alliance has put even
more focus on improving industry's image
with stakeholders, the media and the public. An aggressive earned media campaign and outreach to key journalists
across the country have made us a go-to
source for local, regional and national media. Reporters and editors from newspapers,
radio, television and the Internet rely on the
Western Energy Alliance for accurate
facts and reasoned commentary on all issues surrounding energy development in the
West: from environmental impacts and financial issues to taxation, transportation,
markets, and legal, legislative and regulatory affairs. As a result, members have seen
and heard their points of view represented in news stories like never before.

junction, we hope the government will return to using categorical exclusions to encourage domestic oil and natural gas production, and cease requiring redundant environmental analysis that slows economic activity. The judge ruled soundly that the
government could not substantially change
a law passed by Congress without so much
as notifying the public and engaging in
proper rule making. (Visit westenernergyalliance.org to read the full decision.)
Following Judge Freudenthal's decision
to overturn DOI's policy, Western Energy
Alliance was called to testify before the
U.S. House Natural Resources Committee, Subcommittee on Energy & Mineral
Resources. Alliance member Randy Bolles
of Devon Energy and staff member Kathleen Sgamma testified before the committee on the benefits of CXs as a valuable
permitting tool for increasing energy development, job creation, economic activity and environmental protection.
Mike Pool, deputy Bureau of Land
Management director, also testified, confirming that the government did not plan
to appeal the judge's ruling and would engage in proper rule making as ordered by
Judge Freudenthal. Pool acknowledged
that BLM couldn't simply issue for public comment the overturned policy (BLM
IM 2010-118), but would put out a deliberative rule that more closely aligned
with Section 390 of EPAct.
Also testifying was Mark Gaffigan
with the Government Accountability Office, who verified that, despite all the media mischaracterization of the 2009 GAR
report, there had been no substantial violations of environmental laws or NEPA
from Section 390 CXs, nor any major impact to the environment.

Categorical Exclusions
The nation also has taken note of the
Alliance's efforts on behalf of Western producers in the wake of legal victories that
overturned policies that were making energy development on public lands increasingly difficult.
Chief U.S. District Judge Nancy
Freudenthal ruled against the Department
of the Interior and the U.S. Forest Service
in Western Energy Alliance v. Interior
Secretary Salazar, overturning the government's actions and issuing a nationwide
injunction against the government's categorical exclusions (CX) policies issued in
May 2010. Judge Freudenthal soundly rejected DOI's claim that Western oil and natural gas companies had not been harmed by
its unlawful and improper rewrite of Section 390 of the Energy Policy Act of 2005.
The judge's ruling is a victory for responsible American energy development,
and holds the promise of new jobs and economic growth. With this nationwide in-

Mineral Leasing Act
In addition to the CX legal victory, the
Alliance achieved a partial victory on a lawsuit to require DOI to issue leases within
60 days of receiving payment from winning
bidders, as required by law. The government argued that the interior secretary basically had unlimited discretion to decide
when or if to issue leases. That argument
made a mockery of the congressionally
mandated timeline in the plain language of
the Mineral Leasing Act, as amended,
which states, "leases shall be issued" by the
secretary within 60 days following payment
by the successful high bidder.
Judge Freudenthal ruled that BLM
must "make a decision" within 60 days, but
stopped short of requiring leases be issued.
However, when forced to make a decision
on outstanding leases, BLM asked companies for more time, and when they refused to continue to wait, BLM simply denied the leases.
The partial victory quickly defaulted to

242 THE AMERICAN OIL & GAS REPORTER

the status quo, with leases remaining
unissued and no further certainty in the
leasing process. Therefore, the Alliance is
appealing that decision and hopes to have
a decision early this year.
Access To Federal Lands
As the voice for Western oil and natural gas producers, Western Energy Alliance
continues to focus its efforts on addressing
the challenges and opportunities that are
unique to developing energy in the West.
One of the most significant challenges is
navigating the bureaucratic maze required
to operate on federal lands. That redundant
red tape was killing economic opportunity in the West became even more evident
with the Alliance's release of a federal leasing analysis for fiscal year 2011.
Our compilation of BLM data confirms
a significant drop in federal onshore oil and
natural gas leasing in the West. Overall, the
number of parcels offered for lease by the
government has declined by 70 percent,
acreage has dropped by 81 percent and revenue has fallen 44 percent since 2008.
In Colorado, the BLM offered a shockingly low four parcels in 2011, and Utah
was close behind with only 17. There were
a few bright spots in the West associated
with the Bakken formation in North Dakota, but overall, leasing in the Rockies is
down significantly, representing lost job
and revenue opportunities both now and
in the future.
Reason For Hope
At a time when the nation's economy
faces historic strains, Western producers offer opportunities for significant job growth,
economic stimulus, and government revenue. Our industry is one of the few that
has exceeded prerecession job levels, and
there is no end in sight. While many policymakers will be focused on elections this
year, we believe there is a real chance that
the solutions we offer will convince the federal government to ease some of its out-ofcontrol red tape and allow Western producers to grow the economy.
Western Energy Alliance also is optimistic that industry will continue to make
progress on the legal front as the federal
courts continue to force DOI to follow the
law in regard to balanced use of our federal lands.
While the world awaits the results of
volatile financial markets and the 2012
elections, Western Energy Alliance will
continue to fight on behalf of the Western
oil and natural gas industry on every
front. We invite all our friends in industry
to join us in our efforts to stop legislation
deemed harmful to onshore energy production, reduce redundant regulations,
and promote market-based solutions to
achieve American energy security.
❒

http://www.westernenergyalliance.org http://www.westernenergyalliance.org

American Oil and Gas Reporter - January 2012

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