Leasing of National Forest Lands in BLM Oil and Gas Lease Sales

Leasing of National Forest Lands in BLM Oil and Gas Lease Sales

Rocky Mountain Wild

November, 2016

INTRODUCTION

Rocky Mountain Wild wanted to better understand how the U.S. Forest Service determines which specific parcels to authorize the Bureau of Land management (“BLM”) to include in the quarterly oil and gas lease sale auctions. To carry out this task, our team read relevant parts of all documents pertaining to oil and gas leasing for all seven of Colorado’s national forest/national grassland administrative units.[1] This included land and resource management plans and accompanying final environmental impact statements (FEISs), as well as stand-alone analyses (including FEISs) of oil and gas leasing. Theanalyses dates from 1992 to December, 2015.

We found that the Forest Service and BLM believe that the authorization of what parcels to offer for lease has already been done in each respective programmatic leasing analysis, and that no further site-specific analysis is needed until after a lease is sold. Though the facts on each unit are a little different with regard to oil and gas leasing, the justifications for approving specific parcels in a forest-wide leasing analysis were remarkably similar.The legality of this approach is questionable, asdiscussed below.

LEGAL BACKGROUND

Prior to 1987, The Secretary of Interior, acting through the BLM, determined what National Forest lands could be leased. The Forest Service could, and did make recommendations, but the BLM was not required to follow them.

That changed with the passage of the Federal Onshore Oil and Gas Leasing Reform Act (“FOOGLRA”) in 1987, which amended the 1920 Mineral Leasing Act. FOOGLRA prohibited any leasing or surface disturbance on National Forest land without prior approval of the Forest Service.

The Forest Service finalized its regulations to implement FOOGLRA in March, 1990. Theseregulations required units with possible oil and gas deposits to conduct a leasing analysis (i.e. to determine which lands were available for leasing). Areas such as designated wilderness areas, where leasing is prohibited by law, would be unavailable. The Forest Service could designateareas “discretionary no lease” to protect unique or sensitive resources. In addition, the agency was directed to determine, for available lands, what stipulations would be needed to sufficiently protect resources from the impacts of oil and gas operations. 36 CFR 228.102(c). This leasing analysis must be conducted “through preparation of a [National Environmental Policy Act or NEPA] document.” In other words, the potential effects of oil and gas leasing and subsequent development must be disclosed, and measures to reduce impacts must be analyzed.

Another decision to be made is to determine what specific lands will be authorized for leasing. Before the Forest Service can authorize BLM to advertise a lease parcel for sale, it is required to:

Verif[y] that oil and gas leasing of the specific lands has been adequately addressed in a NEPA document, and is consistent with the Forest land and resource management plan.

228.102(e). If sufficient NEPA has not been done, or if there is “significant new information or circumstances”, then “additional environmental analysis shall be done before a leasing decision will be made.” Id.

Interpretation and application of 228.102(e) is the key issue in the Forest Service’s determination of what lands to authorize for leasing and when analysis of possible impacts must be done.

LEASING ANALYSES AND LEASING SPECIFIC LANDS DECISIONS ARE MADE TOGETHER, BASED ON A PROGRAMMATIC, NON-SITE-SPECIFIC ANALYSIS

All seven of Colorado’s National Forest/Grassland administrative units have conducted leasing availability analysessince the Forest Service finalized its procedures under FOOGLRA. Two have since revised these analyses, and another unit did so for the grasslands portion of its unit.

Each leasing analysis determined which lands are legally available for leasingand what lease stipulations are needed to protect resourceson the respective unit.The NEPA analysisaccompanying the leasing availability analysis is an Environmental Impact Statement (EIS)with a programmatic disclosure of possible impacts across the whole unit (i.e. the entire National Forest/Grassland, or at least the portion thought to have at least a moderate potential for oil and/or gas deposits, or where industry has shown interest in exploring). In other words, site-specific impacts for individual leases or groups of leasesare not disclosed because the locations of future leases were not known at the time of decision on availability.

Every unit’s documentation states that the leasing availability and leasing specific lands decisions are made simultaneously.Indeed, most of them state that one of the purposes of the analysis is to authorize BLM to offer specific lease parcels for sale.The Forest Service believes that the NEPA documentation for the leasing analysis is sufficient to make the leasing specific lands decision, even though the exact locations of leases and ground disturbing activities that would occur on them were not known.One unit’s EIS stated the following: “…at this level of analysis without knowing the specifics of the ground disturbing activities in relation to the location of the resources effected (sic), [the impacts are] extremely difficult to predict.”

But under the oil and gas decisions for each unit, no additional NEPA documentation will be done prior to lease issuance.Additional documentation will only be done by the Forest Service after a lease is sold, when a lessee submits an application for permit to drill (“APD”). Though BLM approves APDs, even for leases on National Forest land, the Forest Service must first approve the surface use plan of operations (SUPO), which is part of the APD.

Notably, all of the decisions to approve leasing of specific lands state that they do not authorize ground disturbing activity - such approval only occurs after approval of an APD by BLM. However, by this time, a lease has already been sold, which essentially grants a property right to the lessee. Thus the NEPA analysis and subsequent decisions during the APD stage are unlikely to result in a cancellation of the lease.

For most of the units, all lands legally available for leasing were approved for authorization to BLM to issue leases. In other words, a sizable portion of each National Forest/Grassland could be leased without any analysis of potential effects at the site-specific level prior to lease issuance.

The bottom line here is that for leases on national forest lands in Colorado, the public does not have an opportunity to comment on whether a particular lease should be issued, nor to review and comment on an environmental effects analysis forpossible operations on any specific leaseprior to lease issuance.

Nevertheless, all of the national forest units believe they have complied with NEPA in approving leasing of specific lands with a forest-wide, programmatic NEPA analysis. This is because each unit has analyzed various effected environments (i.e. types of areas that might be affected by oil and gas operations, using the reasonably foreseeable development scenario that must be described in the leasing analysis). The estimation of impacts also relies on experience with past projects of a similar nature. The units believe that this approach also complies with 36 CFR 228.102(e), which requires verification that “oil and gas leasing of the specific lands has been adequately addressed in a NEPA document”. (See full quote in LEGAL BACKGROUND above.)

For example, the Grand Mesa-Uncompahgre-Gunnison (GMUG) National Forest identified 27 such areas, including: six special wildlife areas, slopes greater than 60 percent, aquatic/riparian/wetland habitats, floodplains,and alpine/tundra areas.Other units did a similar analysis. The units believe that disclosure of impacts to such areas is sufficient for possible future oil and gas operations, even though the specific lands to be leased and where operations would occur on each lease are not known.

LEGAL PROBLEMS WITH THE FOREST SERVICE’S APPROACH

NEPA is intended to be applied prior to decisions committing resources. An analysis of potential impacts and actions to reduce such impacts needs to be conducted prior to a decision approving a project:

The NEPA process is intended to help public officials make decisions that are based on understanding of environmental consequences, and take actions that protect, restore, and enhance the environment.

40 CFR 1500.1(c) (Council on Environmental Quality (“CEQ”) regulations implementing NEPA). Leasing specific parcels of land commits resources by granting a preference right to the lessee. That means that all other uses of the land initiated after the lease is issued will be subordinate to the lessee’s operations.

Lease issuance, the point in the process where resources are committed, appears to fit the definition of proposal:

“Proposal” exists at that stage in the development of an action when an agency subject to [NEPA] has a goal and is actively preparing to make a decision on one or more alternative means of accomplishing that goal and the effects can be meaningfully evaluated.

40 CFR 1508.23.Aproposal to issue a lease would be the most meaningful time to evaluate potential impacts (i.e. before the lease is issued and before development is likely to be approved).

Under the CEQ regulations:

[NEPA documents]shall serve as the means of assessing the environmental impact of proposed agency actions rather than justifying decisions already made.

40 CFR 1502.2(g).

The analysis of impacts done at the APD stage, described above, appears to merely ratify a decision already made to issue a lease for the parcel in question.

In some of the oil and gas documents reviewed, the Forest Service cited the Supreme Court Case, Robertson v. Methow Valley Citizens Council,490 U.S. 332 (1989),as justifying authorization of leases before site-specific disclosure of impacts was done under NEPA. This case involved a proposed ski area in Washington State.

However, it is questionable if this case applies here, as the factual situation is different. The main issue in this part of the case was mitigation – whether a complete plan to mitigate impacts had to be formulated prior to project approval. The Court ruled this did not have to occur, as long as another NEPA process occurred later, in which plans for mitigation would be finalized. This case involved one ski area that would have impacts in various places off of the National Forest (i.e. on other land ownerships) where the ski area would be built, depending on the final configuration of the project’s facilities. Oil and gas leasing on Colorado’sNational Forests involves an unknown, but potentially large, number of leases in unknown locations, each which would have impacts if exploration and/or drilling occurs.

The amount of land approved for authorization for leasing is quite substantial. On at least two units, the Forest Service declined to exercise its discretion to not authorize leasing on lands available for leasing. Not leasing some available land is clearly allowed under the agency’s procedures. See 36 CFR 228.102(c)(iii). On those units, the entire area was found available for leasing and has been approved for authorization to lease. Only one unit has a large amount of land off-limits to leasing.

RECOMMENDATIONS

The failure to conduct pre-leasing site specific analysis is concerning. Tiering to past analysis can result in undisclosed impacts and inadequate mitigation measures. Assurances that further NEPA compliance will be completed at the APD stage does not inform the leasing decision. Challenging this process could help to get these parcels on Forest Service land deferred or force the agency to undertake a more rigorous NEPA process prior to leasing.

Organizations should continue to watchdog BLM leasing of Forest Service lands and raise this issue in protests. A campaign could be created around this questionableprocess aimed at convincing the agencies to keep the public better informed and conduct a more robust public process. Absent such changes, these Forest Service parcels will continue to show up at the lease sale stage without an opportunity to provide meaningful comments.

Should the BLM and Forest Service continue to shortcut the NEPA process, a litigation strategy could become necessary. Ideally this course of action would focus on specific lease parcels with undisclosed issues that arose subsequent to the past Forest Plan analysis. With the right set of parcels presenting significant unanalyzed impacts, a Court could provide the agencies with strong instruction to fully comply with NEPA by analyzing these parcels in pre-leasing NEPA documents.

CONCLUSION

The legality of the Forest Service’s process for authorizing individual parcels for inclusion in lease sales is questionable. The processdenies the public an opportunity to review potential impacts and comment on the analysis of potential effects of operations on any lease and on whether any lease should be issued. Comments are solicited and accepted only: 1) at the programmatic stage, a forest-wide analysis that does not disclose site-specific impacts of development of any leases; and 2) at the APD stage, after a lease has already been issued.

For any lease on Colorado’s National Forest lands, the issue of inadequate disclosure of site-specific impacts should be raised in a protest of the decision by BLM to approve any such lease. This issue should also be highlighted in meetings and other communications with the agencies. Increased NEPA analysis prior to leasing will help keep oil and gas development out of the most sensitive and important parts of our National Forest. This outcome is something worth fighting for.

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[1] Rocky Mountain Wild contracted with Forest Service expert Rocky Smith to assist with this research.