American Oil and Gas Reporter - January 2023 - 18

IndustryDigest
Interior's failure to hold oil and natural
gas lease sales in the third quarter of
2022 as required under the Mineral
Leasing Act. The associations filed suit
in the U.S. District Court for the
District of Wyoming along with the
state of Wyoming.
" The Mineral Leasing Act is clear:
the Interior Secretary must hold at least
quarterly lease sales in every state
where there is interest, as reflected by
nominations, " points out Western
Alliance President Kathleen Sgamma.
" Oil and natural gas companies have
nominated millions of acres in
Wyoming and across the West that
have yet to be offered for sale. Not
only has this administration held only
one set of lease sales in its first two
years, but has now signaled that there
will be no sales until second quarter
2023, a full year later. Once a year
does not equal 'quarterly.'
" Further, just before Thanksgiving
the Interior Department released seven
new policies that make it more difficult
to lease and produce on public lands, "
Sgamma continues. " The
announcement came just days before
the administration gave the green light
to Venezuelan development. Rather
than buttressing up dictators, President
Biden could tell his agencies to back
off increasing red tape meant to
suppress American production so that
we can do more to reduce high energy
prices for the country and the world. "
" The federal government owns
more surface and minerals in Wyoming
than every other owner combined. This
level of federal control over a state's
activities and economic health requires
an administration that is not only
professional and efficient, but willing
to follow the law in the first place, "
maintains PAW President Pete
Obermueller. " Wyoming's oil and gas
operators must have a pipeline of new
leases to continue to explore and
develop our world-class resources. One
lease sale a year does not cut it, and
unfortunately court intervention
appears to be the only recourse in
forcing the Biden administration to
respect rule of law. "
An editorial in the Cody, Wy.,
newspaper echoes that perspective. " It
is unfortunate the petroleum groups
must file a lawsuit to compel a federal
agency to comply with federal laws, "
suggests the Cody Enterprise. " To us
the law is clear and simple. The interior
secretary should follow the Mineral
Leasing Act. We hope the judge in U.S.
District Court assigned to the case
believes in the rule of law. "
The Alliance and PAW note they
challenged the leasing ban President
Biden included in Executive Order
14008 on climate change. In September,
they note, the District Court of
Wyoming issued a ruling focused
narrowly on facts surrounding the
canceled first quarter 2021 sales.
The ruling reads in part, " The
administrative record supports that
postponing the first quarter 2021 lease
sales was done to ensure (National
Environmental Policy Act) compliance
with several then-recent federal court
opinions that negated previously
authorized oil and gas lease sales. . . .
Even if EO 14008 was a factor in the
decision to postpone the first quarter
lease sales, 'a court may not reject an
agency's stated reason for acting
simply because the agency might have
had other unstated reasons.' Dep't of
Com. v. New York, 139 S. Ct. 2551,
2573 (2019). "
Instead of appealing the narrow
ruling, the associations say they are
challenging DOI's general failure to
hold the required quarterly lease sales.
They will be represented by L. Poe
Leggette, Mark S. Barron and
Alexander K. Obrecht of
BakerHostetler. ❒
DOE Moves To Buy Oil
To Address SPR Drain
WASHINGTON-The U.S.
Department of Energy's Office of
Petroleum Reserves has announced it
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will start repurchasing crude oil for the
Strategic Petroleum Reserve. DOE touts
the repurchase as an opportunity to
secure a good deal for American
taxpayers by repurchasing oil at a lower
price than the $96 a barrel average price
for which it was sold.
Last autumn, President Biden
announced a plan to replenish the SPR
with fixed-price crude purchases. He
characterized the approach as a way to
ease producers' exposure to oil price
volatility so they could invest in new
projects with assurance of a stable
price for crude sold to the SPR.
According to DOE, its Dec. 16
announcement constituted a pilot
approach that would start with a
purchase of as many as 3 million
barrels of crude oil.
The repurchase has been prompted
by the administration's decision to
release 180 MMbbl of oil in 2022, press
accounts note, a contrast with a mere
three releases under emergency
conditions since 1975, the most recent
of which had been 30 MMbbl by
President Barack Obama in 2011.

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American Oil and Gas Reporter - January 2023

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