American Oil and Gas Reporter - August 2018 - 128

Some courts are requiring the BLM to
justify its use of EPA climate change
analysis guidance instead of the approach favored by a citizen group, observes Davis, Graham & Stubbs LLP
partner Kathleen C. Schroder. Even thorough climate change analysis is particularly open to challenge because the issue is so technical, she said.

* Texas Comptroller Glenn Hegar;
* IPAA Vice President of Crude Oil
and Natural Gas Regulatory Affairs Susan
Ginsberg; and
* IPAA President and Chief Executive
Officer Barry Russell.
A Messy Old Issue
One area in which McDonald reported
positive developments for oil and gas
producers involved the 100-year-old Migratory Bird Treaty Act. In 2015, she
noted, the Obama administration tried to
promulgate an incidental take permit program for migratory birds. She noted that
in December, the Trump administration
reversed that with a solicitor's opinion.
"Since then, the issue has taken off,"
she related. "There have been a lot of
really heated discussions on Capitol Hill
about migratory bird take liability. There
have been a lot of op-eds, and key letters
from liberal senators advocating some
sort of take provision."
According to McDonald, IPAA was
part of an active coalition that hoped to
codify the administration's position on
the issue. "We really see this issue manifesting itself in terms of Wyoming's federal
lands and what the Bureau of Land Management says it can and cannot do for
raptor stipulations because of a Clintonera executive order," she detailed. "It is a
really messy old issue. Environmentalists
have filed a complaint against the U.S.
Fish & Wildlife Service over the solicitor's
opinion. That is something for which we
may want to advocate in the legal arena.
It is something we really care about."
Schroder's remarks considered a number

of implications emanating from recent
court rulings. "The big wild card is what
the courts say about these regulatory efforts,"
she said. "There is some question of what
an agency must show to undo or change a
rule solely based on policy considerations.
Another big question deals with the previous
administration's rule or guidance."
As an example, she mentioned an
early June decision in which a federal
court in New Mexico set aside a decision
to lease land for oil gas exploration in
the Santa Fe National Forest. In that case,
the court deemed National Environmental
Policy Act analysis by BLM and the U.S.
Forest Service inadequate regarding climate change impacts.
"What is an interesting footnote-and
it was literally in a footnote-is that the
court said it was aware . . . that the Obama
administration guidance had been withdrawn, but the court considered it helpful
and so followed it anyway," Schroder reported. "At some level, no matter how
much this administration tries to undo
these policy changes, particularly this regulatory guidance, it is going to be hard to
put the genie back in the bottle. The court
said 'Here is one way the agency can do
it and it sounds good to me.'"
She went on to note the ruling constituted the second case this spring in which
a federal court addressed climate change
analysis. The other was a District of Montana decision that threw out BLM leasing
decisions in Montana and Wyoming.
"The courts are scrutinizing BLM's
climate change analysis," Schroder described. "It is really hard for agencies to
predict and have the tools and expertise to
analyze climate change impacts. The courts
are looking not only at a macro level of
asking whether the bureau did a good job
of considering this and asking that, but
they really have gotten down into the
weeds and asked the agencies how far out
they projected climate change impacts.
"In this Montana case and another,
the court required BLM to explain why
it followed EPA's guidance on climate
change analysis," she marveled. "A citizen
group disagreed with that and the court
dinged BLM because it did not explain
why it disagreed with the citizen group
and went with EPA's approach, which
seems like a no-brainer. If I was litigating
that, I would think 'Of course BLM can
defer to the agency with more expertise
in this issue.' I think this is going to be
an ongoing issue, because it affects all of
BLM's authorizations."
Moreover, she suggested, BLM actually
seemed to be doing a better job of climate
change analysis than many other federal
entities. "We are seeing multiple agencies
grapple with this issue," Schroder reported.

128 THE AMERICAN OIL & GAS REPORTER

"As good as BLM's climate change analysis is, it is still being set aside because
the issue is so technical. It is a real
treasure trove for nongovernmental organization lawyers to dig around and
find something they can make hay with."
EPA Perspective
Administrator Idsal noted EPA had
sent its revised definition for waters of the
United States to OMB for review shortly
before IPAA's convention. She encouraged
oil and gas companies to offer feedback.
"Most of the concerns come from municipalities, farmers and ranchers, but the
devil is always in the details," she said.
"Look at that Federal Register, figure out
if you need to comment, and if so, weigh
in" (see story, page 16).
Another development Idsal addressed
dealt with a new owner audit policy that
she said came out of discussions at a
recent Interstate Oil & Gas Compact
Commission meeting.
"A number of states said they had great
audit policies that their regulated communities really seemed to like, that had seen
very good results, and that maybe EPA
should consider looking into something
similar," she recounted. "We are soliciting
feedback on what is being proposed."
She cited self-audit programs in Texas
and Colorado as two examples. "We recognize the two are not perfectly synced,
but those policies are very robust," she
assessed. "They have demonstrated environmental and human health benefits,
they work well and companies know what
to expect. We are looking at opportunities
to roll that out on a federal level."
Idsal speculated that a federal program
might defer to sufficiently robust state
self-audit programs, supplement less thorough ones and fill the void in states that
lack one. Again, she encouraged producers
to file comments.
"What works, what doesn't work?"
she posed. "Can EPA create a backstop
or can it recognize robust state programs?
If industry is signing up for self-audits
within your state and we are comfortable
with how you do it, shouldn't we let you
all proceed?
"There also might be opportunities as
we talk cooperatively," she added. "We
might tell a state 'We like what you are
doing and want more information. Would
you mind if we supplement your selfaudit with a little more information, so it
covers those bases as well?' We are currently having those discussions."
Advancing Science
Comptroller Hegar told IPAA that his
office oversaw ESA matters for Texas.
He noted that the act had not changed

American Oil and Gas Reporter - August 2018

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