California Energy Group Defends Oil and Gas Leasing

California Energy Group Defends Oil and Gas Leasing

DENVER - A California nonprofit, non-partisan trade association that represents some 450 independent crude oil and natural gas producers, royalty owners, and service and supply companies on Juje 25 filed its brief with a California federal district court defending federal oil and gas leasing in the nation’s hottest new shale play. 

The California Independent Petroleum Association, represented by Mountain States Legal Foundation (MSLF), filed a friend of the court brief urging that the district court not limit oil and gas activity in the Monterey-Santos field near Bakersfield.  The filing follows a ruling by a magistrate judge in March 2013—in a lawsuit filed by two environmental groups—that documents prepared by a federal agency prior to issuing four oil and gas leases violated federal law.  The magistrate judge is now considering whether to vacate the leases or further limit oil and gas activity in the area.  Meanwhile, in mid-April 2013, the groups filed a second lawsuit in the same court over the leasing of nearly 18,000 acres. 

“The environmental groups have failed to meet the heavy burden that is imposed on them to justify their demand that the leases be nullified while any procedural defects are corrected,” said William Perry Pendley, MSLF president.  “The leases should stand while the paperwork is corrected.”

In December 2011, the Center for Biological Diversity and the Sierra Club challenged the Bureau of Land Management’s (BLM’s) sale of four oil and gas leases involving California’s Monterey-Santos Shale Formation.  They alleged that the BLM violated the National Environmental Policy Act (NEPA) by relying upon an outdated environmental assessment (EA) when it issued the leases.  The EA was premised upon the assumption that only one exploratory well would be drilled in the area to be leased, and did not address the issue of hydraulic fracturing in much detail.  Instead, the BLM noted that it would reserve its detailed analysis of the impacts of fracturing until application for permits to drill (APD) were submitted because analyzing site-specific impacts is more feasible at that point.

In March 2013, the magistrate judge ruled in favor of the two groups by concluding that the BLM violated NEPA when it issued a “finding of no significant impact” (FONSI) because it failed to consider all the “reasonably foreseeable” environmental effects that could result from the lease sale.  The BLM had argued that it could not be charged with considering the effects of hydraulic fracturing, because it has no authority to regulate fracturing at the lease sale stage.  The magistrate judge disagreed and ruled the BLM should have prepared a full-blown environmental impact statement (EIS) instead of issuing a FONSI based on an EA due to the uncertain impacts of fracturing.

Mountain States Legal Foundation, created in 1977, is a nonprofit, public-interest legal foundation dedicated to individual liberty, the right to own and use property, limited and ethical government, and the free enterprise system.  Its offices are in suburban Denver. 

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