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Federal Judge Forces Interior to Decide on Drilling Leases

Posted By Nicolas Loris On July 7, 2011 @ 1:15 pm In Energy | Comments Disabled

Typically when someone buys something, that person receives some good or service in return. That’s not always the case when it comes to the federal government.

The Department of Interior failed to issue leases after several oil and gas companies purchased them from the Bureau of Land Management. Consequently, the six companies that won and bought the leases and Western Energy Alliance, which represents more than 400 independent natural gas and oil producers, sued the government. They earned a partial victory last week when a federal judge in Wyoming ordered Interior to decide on 47 leases in Utah and Wyoming but not necessarily issue them.

Between 2005 and 2010, these oil and gas companies purchased a number of leases on federal lands to explore and drill for oil and gas. Before the companies can move forward, however, Interior must issue the leases. The Mineral Leasing Act requires that “leases shall be issued” by the Secretary of the Interior 60 days after a company wins the bid, but Secretary Ken Salazar hasn’t done so. According to The Wall Street Journal [1], “The Wyoming office of Interior’s Bureau of Land Management, where many of the leases were purchased, said leases were held up by objections from environmental groups.”

The government offered no refund for the money paid for the leases. One company [2], Baseline, “paid more than $1.3 million for Wyoming leases and nearly $545,000 for Utah leases. At the time of the lawsuit’s filing, Baseline had only received some of its leases in Wyoming and none of the Utah leases. The Utah leases were won during auctions held as long as six years ago.”

The tag-team of radical environmental groups and onerous regulatory red tape continues to halt America’s energy production and stifle job creation and economic activity. Environmental activists delay new energy projects by filing endless administrative appeals and lawsuits. Shell cited regulatory delays and legal challenges preventing it from moving forward with exploration programs in the Beaufort and Chukchi Seas.

This is the second time the federal courts have sided with America’s energy producers. Federal District Court Judge Martin Feldman held the Interior Department in contempt of court [3] for ignoring his ruling to cease the job-killing drilling moratorium imposed by President Obama last year.

The Obama Administration touted that U.S. crude oil production in 2010 was the highest it has been since 2003. While this is true (as a result of increased horizontal drilling in North Dakota [4]), the Energy Information Administration projects that oil production will decline in the coming years [5] as a result of Obama’s anti-drilling policies. Oil and gas production drives the economy in significant portions of the western United States. It’s nonsensical to unnecessarily hold up energy production at a time when it’s badly needed.

 


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2011/07/07/federal-judge-forces-interior-to-decide-on-drilling-leases/

URLs in this post:

[1] to The Wall Street Journal: http://online.wsj.com/article/BT-CO-20110629-714424.html

[2] company: http://www.deseretnews.com/article/700148045/Victory-claimed-by-both-sides-in-legal-dispute-over-gas-and-oil-leases.html

[3] Federal District Court Judge Martin Feldman held the Interior Department in contempt of court: http://www.politico.com/news/stories/0211/48745.html

[4] increased horizontal drilling in North Dakota: http://www.eia.doe.gov/oog/info/twip/twiparch/110427/twipprint.html

[5] will decline in the coming years: http://www.eia.gov/emeu/steo/pub/contents.html#US_Crude_Oil_And_Liquid_Fuels

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