Industry group sues BLM over lease sales

James Fenton

FARMINGTON — Representatives of the oil and gas industry are upset with the U.S. Bureau of Land Management for not holding quarterly lease sales for drilling on public lands.

A Denver-based oil and gas industry group claims the Bureau of Land Management, which operates this field office in Farmington, is not holding quarterly lease sales for drilling on public lands as required by law.

On Thursday, the Western Energy Alliance, a Denver-based pro-industry group, filed suit, challenging the agency to follow the federal statutory law — provisions in the Mineral Leasing Act — that mandates that lease sales for oil and gas development be held four times a year.

Kathleen Sgamma, Western Energy Alliance's vice president of government and public affairs, said in a press release that the impact of legal pressure from environmentalist groups and the agency's own dysfunction are causing the problem.

"Through protests and petitions, the Keep-It-in-the-Ground movement is trying to coerce BLM into violating the law by stopping all leasing on federal lands,” Sgamma said in the release. “Yet without doing anything, activists could achieve the same goal just by leaving BLM to its own devices. Western Energy Alliance is simply asking the courts to compel BLM to follow decades-old law and hold quarterly lease sales in every oil and natural gas state."

In a complaint filed in the U.S. District Court for the District of New Mexico, alliance attorneys also complained that the agency has "unjustifiably denied" the organization's Freedom of Information Act requests for information on how the BLM administers federal oil and gas lease sales, and asked for those requests to be delivered immediately.

According to the alliance, the New Mexico state office held two lease sales in 2015, with only one planned this year, which hurt operators' planning and bottom line. The group claims that inaction also hurts local and state governments that rely on the collection of royalties and fees associated with lease sales.

"BLM’s illegal administration of its leasing program has injured and will continue to injure individual Alliance members," the complaint states. "The failure to hold lease sales according to the Mineral Leasing Act’s mandate unnecessarily delays — and can completely halt — development of certain federal minerals. Alliance members have had to wait years in many cases for leases to be finally offered for sale. Without a full leasehold, oil and natural gas operators cannot proceed to the development phase, and many Alliance members have had projects held up for years because of unnecessary and illegal delays at the leasing stage."

Leasing delays cause hardships to oil and gas companies, including hampering their drilling planning, causing them to "miss deadlines and obligations" imposed by agreements with other entities, and denying their ability to generate revenue, according to the complaint.

Paul Reed, a Chaco scholar and a preservation archaeologist with Tucson-based Archaeology Southwest, has said that the oil and gas industry's claims of the potential financial benefit from oil and gas leasing in New Mexico, especially around cultural sites like Chaco Culture National Historical Park, are insensitive and overblown.

"It’s a really bad trade-off to want to drill in a marginal production zone with minor potential for financial return," Reed said. "The industry doesn't have a leg to stand on."

Reed is seeking a permanent deferment of any leasing for oil and gas development on public land within a 10-mile radius of Chaco park, a World Heritage Site.

In June, the BLM's Farmington Field Office decided to cancel the Oct. 19 sale of three parcels, or 2,122 acres, of public land near Chaco, a move that Reed and environmental groups and conservationists have hailed as progress.

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621.