American Oil and Gas Reporter - November 2018 - 19

IndustryDigest
Bush in the U.S. District Court for the
District of Idaho in a lawsuit filed last
April by the Western Watersheds Project
(WWP) and the Center for Biological
Diversity against BLM, Interior
Secretary Ryan Zinke and Deputy
Secretary David Bernhardt.
The WWP lawsuit challenges BLM
Instruction Memorandum 2018-026
issued in December 2017 and IM 2018034 issued in January 2018. IM
2018-026 repeals the Obama
administration's 2015 Sage Grouse Plan
Amendments, which required BLM to
prioritize leasing and development
outside of sage grouse habitat (AOGR,
February 2018, pg. 94).
IM 2018-034 replaced IM 2010-17
and signaled BLM's intent to return to
quarterly oil and gas lease sales, and to
eliminate use of Obama-era master
leasing plans (AOGR, March 2018, pg.
30). The purpose of IM 2010-17 was to
increase public involvement in
developing master leasing plans as well
as require BLM to collect information
on other natural resource values before
making leasing decisions (AOGR, June
2010, pg. 18).
Commenting that "plaintiffs have
shown a substantial case for success on
the merits of their claims," Judge Bush's
order requires that, "for oil and gas
leases scheduled for the fourth quarter of
2018 and thereafter, BLM must
reimplement certain provisions contained
in IM 2010-17 as to the nature of, and
time periods for, public involvement and
protest in the oil and gas leasing process
. . . in areas of federally-recognized sage
grouse habitat."
The judge specified that his
injunction did not apply outside of sage
grouse habitat management areas.
Further, he said, leases issued subject to
sales already conducted or scheduled
for the remainder of third quarter 2018
were not affected either.
In addition, IPAA points out, Bush's
preliminary injunction "does not grant
the groups' request to end BLM's
quarterly lease sale schedule and revert
to the Obama-era system of rotating
parcels between field offices."
But it is having an impact on future
lease sales, IPAA advises. BLM
removed 142 parcels totaling 158,797
acres from a northwestern Colorado
lease sale and moved the sale date from
Dec. 6 to Dec. 13 after Colorado
officials protested. Published reports

say Colorado Governor John
Hickenlooper and U.S. Senator Michael
Bennet, D-Co., sent separate letters to
acting BLM Colorado Director Gregory
Shoop in September, expressing
concerns that the sale included sage
grouse habitat, the reports say.
Further, IPAA says, BLM is delaying
oil and gas lease sales on almost 90
square miles in Montana and North
Dakota, and in October was considering
rescinding 578 parcels that were within,
or partially within, 778,312 acres of
designated grouse habitat from a
planned December lease sale in
Wyoming along with more than
300,000 acres in Utah and Nevada. r

Federal Lawsuit Stalls
BLM Plan To Rescind
2016 Rule On Venting
SAN FRANCISCO-A White House
proposal to rescind provisions in an
Obama-era regulation governing the
venting and flaring of associated natural
gas from wells on public and tribal
lands is facing a legal challenge.
The lawsuit, filed in the U.S. District
Court for the Northern District of
California by 18 environmental groups
that include the Sierra Club, Center for
Biological Diversity, Environmental
Defense Fund and National Wildlife
Federation, challenges the Bureau of
Land Management's rescission rule.
Court documents claim that rule, issued
in September, unlawfully revoked
almost all of the Waste Prevention,
Production Subject to Royalties, and
Resource Conservation Rule that was
released Nov. 18, 2016.
The plaintiffs allege the
government's action removes
reasonable protections designed to limit
waste of natural gas on federal public
and Indian lands resulting from venting
and flaring activities.
According to court documents, BLM
adopted the 2016 rule in response to
allegations of rampant waste of publicand tribal-owned natural gas and the
agency's determination that existing
waste-prevention regulation was
inadequate. The 2016 waste prevention
rule required operators to employ a
number of technologies to control
venting, flaring and leaks, and became
effective Jan. 17, 2017. President
Donald Trump thereafter directed

Secretary of Interior Ryan Zinke to
reconsider it.
On Sept. 18, BLM finalized its
rescission rule. According to court
documents, BLM justified the change
by adding a new definition of "waste of
oil and gas." The agency now considers
only the profits of individual oil and gas
companies-not economic losses or
other impacts to the public-when
deciding what constitutes waste.
The plaintiffs allege this definition
violates the plain language and intent of
the Mineral Leasing Act, which requires
BLM to consider not only private oil and
gas interests, but also the "interests of
the United States" and the "public
welfare" when regulating waste on
public and tribal lands. The lawsuit also
claims BLM's actions failed to adhere to
the Administrative Procedure Act or the
National Environmental Policy Act. r

New York AG Accuses
ExxonMobil Of Hiding
Risk Of Climate Change
WASHINGTON-In a case The Wall
Street Journal says "should be laughed
out of court," acting New York Attorney
General Barbara Underwood is suing
ExxonMobil for misleading investors
regarding the financial risks the company
faces from climate change regulations.
The lawsuit was filed Oct. 24 in New
York Supreme Court in New York
County, according to a statement
released by Underwood, contending that
"Exxon built a façade to deceive
investors when, in fact, it was
intentionally and systematically
underestimating or ignoring them,
contrary to its public representations."
The New York AG's lawsuit, Energy
in Depth outlines in a response, is
premised on a claim that ExxonMobil
misrepresented the potential cost of
future climate change regulations
because it used a different internal
assumption for a price on carbon than
what it reported externally.
Underwood says ExxonMobil told
investors it accounted for the risk of
government regulation by applying a
"proxy cost" for the effects of future
climate regulations. But the company did
not apply the same proxy cost to all
aspects of its business, "including
evaluating the volume of its oil and gas
reserves, determining whether to write
NOVEMBER 2018 19
American Oil and Gas Reporter - November 2018

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