American Oil and Gas Reporter - January 2016 - 144

The Presidential Papers
accurate information on oil and natural
gas issues in the West. Congress, governors, the media, industry employees,
sportsmen, ranchers, and other stakeholders know they can turn to the Alliance to
better understand the many regulatory
issues affecting our industry.
The Alliance advocacy team supports
policy reforms that encourage job growth,
investment and reasonable access to federal
lands. Supporting the Western Energy Alliance is a better and more cost-effective
way to support these things than is attempting to do them on our own.
Fracturing Regulations
Two efforts by the Alliance regarding
federal fracturing rules and the greater
sage grouse demonstrate the impact of
its leadership in countering federal overreach.
When the Bureau of Land Management
announced its hydraulic fracturing rule
in March, the Alliance and the Independent
Petroleum Association of America immediately challenged the rule in the U.S.
District Court of Wyoming. Our team
was well positioned to initiate the lawsuit
because we had been engaged actively
on this regulation since it was conceived
in 2012.
This lawsuit capped a long-running
effort by the Alliance. The Alliance's advocacy team understood early on that a
successful challenge to this rule would
require engaging at every step of the
process. As a first step, the Alliance submitted substantive, thoughtful comment
letters to the BLM as it developed the
hydraulic fracturing rule, which resulted
in many improvements to the rule.
We also recognized that a more strategic
approach would yield benefits. We communicated frequently with states and tribal
governments to help them engage effectively in the rule-making process. Ultimately, we were successful in convincing
them to pursue legal action as well.
Our collaborative, focused efforts revealed a litany of technical concerns and
showed how the rule duplicated state regulations, lacked justification and exceeded
BLM's authority. The Alliance's economic
analysis showed the rule's $113,000 cost
per new federal well was excessive, given
BLM's inability to provide evidence of
environmental benefits.
Our combined forces convinced the
federal court to enjoin the rule while our
lawsuits were adjudicated. While this

case is not over, it is a good example of
how industry can work effectively with
its stakeholders, including impacted states
and tribal governments, to counter federal
overreach. This litigation model also is
working successfully on the "waters of
the United States" rule and the potential
improper listing of certain species-such
as the lesser prairie chicken-as endangered
or threatened.
Greater Sage Grouse
The case of the greater sage grouse is
another noteworthy example of Alliance
achievements. In September, Interior Secretary Sally Jewell announced the sage
grouse would not be listed as endangered
or threatened under the Endangered
Species Act. While the agency arrived at
the right decision, it took the wrong path
to get there, basing the decision on 14
land-use plan amendments covering nearly
60 million acres of BLM and Forest Service lands.
Instead of relying on state plans based
on actual ground conditions, the (federal)
land-use plans include restrictive buffers,
density and disturbance caps, no-surfaceoccupancy restrictions, and net conservation mitigation requirements. These
limit development of federal leases and
close mineral acres to future leasing.
Anticipating this outcome, the Alliance
again understood early on that it needed
to act strategically in formulating an effective response. It worked to build a
coalition of ranchers, landowners, county
governments and other industries across
the West. Over the past two years, this
coalition has investigated and challenged
the scientific basis the agencies relied on
to craft their land use plans.
The Alliance won Freedom of Information Act lawsuits to acquire data withheld from the public, and filed formal
challenges under the Data Quality Act.
Its challenges have shown that the agencies
failed to adhere to basic scientific and
transparency standards. The extensive
legal and scientific research and experience
gained from these and other engagements
will be invaluable to the Alliance's future
challenges.
The Alliance has bolstered its arguments by commissioning an economic
study detailing the high costs of the landuse plans. It concluded those plans would
prevent creation of 9,267 jobs and cost
$2.5 billion in annual economic impacts.
The association also commissioned a

144 THE AMERICAN OIL & GAS REPORTER

conservation study detailing more than
770 specific conservation measures the
oil and gas industry implemented to
protect the sage grouse.
With the amount of work done leading
up to the Interior Department's September
decision, the Alliance is well positioned
to challenge the federal government as it
attempts to implement these damaging
plans. Our proactive efforts will enable
us to effectively and credibly bolster state
plans as an alternative to the one-sizefits-all federal approach.
No Timeouts
These two issues are good examples
of how the Alliance could lead our industry
effectively in countering overreaching
regulations. But with more rules coming
this year, we need to increase our advocacy
efforts. The administration in Washington
is seeking to build an environmental
legacy and generate campaign donor enthusiasm, and we should expect it to
throw everything it can at us.
Our opposition is well funded and
motivated, and we cannot call a timeout
in this struggle just because our cash
flows have been temporarily impacted
by low commodity prices.
While we all have to deal with local
issues impacting our specific operating
areas, no company on its own could
defend itself adequately against the sheer
number of federal regulations coming at
all of us. Success will be realized only if
we coordinate our time, resources and
energy.
Western Energy Alliance has proven
to be effective at advocating and educating
by bringing together industry, elected officials and other stakeholder groups. By
supporting the Alliance, we can stand together, and with one voice speak against
regulatory overreach.
❒

Coming In February
In Part III of the Unconventional
Resource Science series, experts from
SM Energy detail how new techniques
are enabling improved productivity in
Bakken/Three Forks horizontals,
while Swift Energy presents a case
study of how it is applying state-ofthe-art geophysical technologies to
give new life to a low-permeability
sandstone in South Texas.

American Oil and Gas Reporter - January 2016

Table of Contents for the Digital Edition of American Oil and Gas Reporter - January 2016