Enlarge Jeff Brady/NPR Pronghorn antelope cross a rural Wyoming road south of Rock Springs, near a Bureau of Land Management lease sale challenged by the Wyoming Wildlife Federation.
Jeff Brady/NPR
Pronghorn antelope cross a rural Wyoming road south of Rock Springs, near a Bureau of Land Management lease sale challenged by the Wyoming Wildlife Federation.
There, companies bid for the right to drill for natural gas on federal land. In recent years, environmental groups have found they can slow down the boom-town pace of drilling by challenging those leases, as a way of protecting special places.
It's a tactic that has upset companies that drill for natural gas.
"We're tired of spending our money, having the government cash our check and taking our money, and not issuing leases," says Nerd Gas Co. senior vice president Cary Brus.
"We believe it's a breach of contract. ... They took our money; we want our leases," says Brus, whose company has joined a lawsuit that claims the Bureau of Land Management is breaking the law.
The Mineral Leasing Act says the BLM has 60 days to award a lease. But a government report released last summer found that the agency was able to meet that deadline less than 10 percent of the time in the Rocky Mountain region.
Part of the reason is that these leases are also subject to other regulations designed to protect the environment. Environmental groups have challenged leases after they are sold, based on concerns for animals like pronghorn antelope, mule dehttp://seamus.npr.org/new_cms/SelectStoryEditorRouting.do?routingAction=LoadFeature&selEditFeature=132658302er and sage grouse that could be pushed out of their native habitat by drilling operations.
"One of the great things about this state is, we have world-class wildlife," says Joy Bannon, field director for the Wyoming Wildlife Federation. "We also have world-class energy resources, and we need to find a balance of that."
Environmental groups have worried that special places were being handed over to the oil and gas industry without much scrutiny.
Enlarge Jeff Brady/NPR Joy Bannon of the Wyoming Wildlife Federation examines a map for a BLM lease sale her group challenged.
Jeff Brady/NPR
Joy Bannon of the Wyoming Wildlife Federation examines a map for a BLM lease sale her group challenged.
Molvar says groups like his started challenging leases as a way of slowing that avalanche. In his view, public land in Wyoming should be available for all kinds of uses, including recreation.
"For so many years, the oil and gas industry has had the entire pie of all the public lands all to themselves," Molvar says.
But that changed when Barack Obama became president nearly two years ago. While George W. Bush's administration was focused on oil and gas development on public land, Obama favors renewable energy. Those changing priorities made it difficult for BLM workers to keep up with awarding leases.
"Prior to February 2009, we were about two months behind," says Julie Weaver, chief of fluid minerals adjudication at the BLM office in Cheyenne, Wyo.
"After the change in the administration, we had to step back and do some re-evaluation, and because of that we have a backlog," she says.
The agency hopes to be caught up by Feb. 1, Weaver says. The BLM is also changing its leasing process, so that concerns from environmental groups are addressed before a lease goes to auction. That will likely lead to fewer leases sold, and less money for the federal treasury.
Meanwhile, the industry has started losing interest in drilling on public land.
"I think you have seen some pullback in activity," says Kathleen Sgamma, director of government and public policy at Western Energy Alliance. "We've gotten very clear signals from this administration that it's going to be difficult to get leases, it's going to be difficult to get permits and project approvals."
Sgamma says that's a shame, because her industry could be providing thousands of jobs at a time when the country needs them.
Gulf Deepwater Drilling Resumes Without Changes To Spill Liability
WASHINGTON -- As deepwater drilling returns from a months-long hiatus in the Gulf of Mexico, the protections that Congress drew up to help victims of oil spills remains stuck in legislative limbo with no clear or likely path to passage.
The Obama administration announced on Monday that it would allow 13 companies to resume deepwater drilling, which it had suspended in May during the massive BP oil spill that followed the Deepwater Horizon's April 20 explosion.
Administration officials categorized the move, which would affect a total of 16 Gulf-area wells, as a logical step for a drilling industry suffering under the ban. All the wells had been operational before the Deepwater Horizon explosion. Moreover, the affected companies would have to comply with new safety rules, though not new environmental reviews.
"Safety is our top priority and the administration has already taken unprecedented steps to increase oversight and safety of offshore drilling," White House spokesman Clark Stevens said. "Any offshore drilling taking place in the United States must meet the rigorous new safety standards put in place since the BP Deepwater Horizon oil spill."
But while the oil and drilling industry was getting back to business, consumer advocates, legal experts and Hill lawmakers were airing concerns that Congress had essentially abandoned its efforts to improve protections and compensation for spill victims.
The major piece of legislation that Democrats drew up in response to the BP crisis has yet to pass the Senate, meaning that if another spill were to occur in the Gulf, the total compensation for economic damages would remain at a paltry $75 million.
"When you consider the risk that offshore drilling poses to our coastal economies and environment, the current cap on oil-company liability is just a spit in the ocean that does nothing to hold them accountable," said Sen. Frank Lautenberg (D-N.J.) one of the chief advocates of eliminating a cap on economic-damage liability for oil companies.
The failed effort to lift oil companies' economic liability illustrates how the Senate saucer can cool even the most seemingly uncontroversial legislation. In the weeks after the BP spill occurred, Menendez announced that he would introduce a bill to ratchet up the $75-million liability cap, established by the Oil Pollution Act of 1990, to $10 billion. The crisis in the Gulf seemed certain to be costly, and keeping payout levels so low seemed impractical if not morally dubious. Eventually, Menendez would scrap the $10 billion figure in favor of removing the cap altogether.
But along the way, things grew complicated. Several unanimous-consent requests to get the bill through the Senate were blocked by Republicans who argued that such a cap would deter smaller companies from drilling. Democrats with close ties to the oil industry, including Sens. Mary Landrieu (D-La.) and Mark Begich (D-Alaska), eventually joined the chorus of objectors. And even after the White House threw its support behind the proposal in early June and it passed through the Environment and Public Works Committee, the juice wasn't there to overcome a filibuster.
Senate Majority Leader Harry Reid (D-Nev.) paired the measure with larger energy reforms, only to strip it out and create a standalone spill bill. In early August, his office announced that it would not hold a floor vote on the legislation until after the summer recess. But when lawmakers came back in September, the issue was all but forgotten. It remains, today, off the political radar.
"We're still working out the agenda for this Congress," said a Democratic Senate leadership aide. "There a lot of very important bills to be addressed. We just don't have specifics yet on what will or won't be on the schedule."
For victims of the current spill, the practical effect of the Senate's failure to pass Menendez's bill will likely be limited. The White House was able to negotiate a $20-billion escrow account with BP, from which it can cover economic damages caused by the summer's fiasco. But for those who have spent years or decades litigating such matters, the dispiriting consensus has been reached that Congress failed to draw something concrete or positive out of this summer's catastrophe.
"It is a huge problem for future oil spills. Both the Valdez spill and this spill show you that when an oil spill happens, the damages far exceed $75 million," said Brian O'Neill, an attorney with the firm Faegre & Benson, who has worked extensively on securing compensation for victims of the 1989 Exxon Valdez spill in Alaska. "The passage of the [Oil Pollution Act of 1990] with that provision in it was one of the great frauds of all time. So to open up the additional platforms in the Gulf, it is sort of like buying the car and not getting any insurance. It is just stupid."
Stupid it may be. But failure to restructure penalties for oil companies was not for lack of want. The vast majority of Democrats supported raising if not eliminating liability caps. The Obama administration, despite allowing a resumption of drilling in the Gulf, claims to back such a move, as well.
"We continue to support the removal of caps on liability for oil companies engaged in offshore drilling, as part of a larger effort to hold the industry accountable for these risks and their consequences," said Stevens, the White House spokesman.
The bill could be easily blocked, however, under the heavy weight of oil industry complaints and the committed obstruction of sympathetic Senators. Eventually, enough time elapsed for the political world to move on to other matters and for deepwater drilling to resume.
"You've got an industry that collectively demonstrated that it was fundamentally unprepared to meet the challenges of deep water offshore drilling," said Tyson Slocum, the research director for Public Citizen's Energy Program. "To allow new deepwater drilling to occur without a signing of adequate financial responsibility for their risks places unnecessary burdens on the American taxpayer." http://www.huffingtonpost.com/2011/01/04/deepwater-drilling-resumes-gulf-spill-liability_n_804430.html
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