American Oil and Gas Reporter - April 2016 - 117

Obama Cements Public Lands Legacy
By Dan Larson
Special Correspondent
DENVER-Early in the final year of
his presidency, Barack Obama seems to
be applying the finishing touches to an
overarching policy that hinders access to
oil and gas resources on public lands, assess some industry advocates.
Examples abound of the administration's
full court press to reduce domestic energy
output, industry groups say, and include
every Obama budget proposal's effort to
repeal what the president refers to as oil
and gas industry subsidies. The budget document also touts the president's expansion
of protections for public lands, describing
it as "the most extensive expansion of land
and water conservation in more than a generation, including creating more than 2
million acres of federal wilderness."
The administration says it has designated an additional 263 million acres of
federal lands during the past seven years,
giving Obama the distinction of "protecting
more land and water than any president
in history."
However, fencing off vast spreads of
public land carries consequences for those
looking to produce energy resources and
the results can be quantified, observes
Kathleen Sgamma, vice president of government and public affairs for Western
Energy Alliance. "By any measure, federal
lands leasing and development has declined under this President," she reports.
"Our studies on federal land show the
number of leases offered and sold, permits
issued, spuds and production are all down.
This only happens with policies that are
driven from the top."
According to Sgamma, Obama's presidency has been characterized by ever-tightening regulatory constraints, slow leasing
and permitting processes, flimsy legal rationalizations for anti-fossil fuel policies
and regulatory revisions that elude normal

rule-making protocol through a process
colloquially known as "sue-and-settle."
"Environmental groups overload the
U.S. Fish & Wildlife Service with Endangered Species Act listing petitions and
then sue the government for missing deadlines," Sgamma describes. "The Department of Interior then enters closed-door
settlements with these groups that exclude
the public, elected officials, states and
other stakeholders. They have shown that
you can sue the government, get a favorable
settlement, shut out the public, and keep
suing if anything less than 100 percent of
your demands are met. It is a bad deal for
both taxpayers and endangered species."
Ground Movement
Although backdoor regulatory expansions are troublesome, they are only one
aspect of an unstated federal policy that
ultimately makes it too costly for most
operators to pursue development on public
lands, assesses Dan Naatz, senior vice
president of government relations and
political affairs at the Independent Petroleum Association of America.
"Add the costs of exploring, developing
and operating on federal land versus on
private land, and most operators are not
going to go there," Naatz maintains. "I
believe the regulations, delays and enforcement are part of the Obama administration's climate change agenda."
Ultimately, he suggests, the president
is demonstrating a "keep it in the ground"
ethos. "No one with the administration
will ever publically admit it," Naatz holds,
"but they believe you keep it in the ground
by making it hard to access and expensive
to produce."
Throughout the president's second term,
the Obama administration "has not been
shy about its support for reducing the impacts of climate change," Naatz considers.
"Where it is cautious is changing the rules
based solely on that issue. So the adminis-

Oil and Gas Activity Leasing On Public Lands
During the Obama Administration

Source: Western Energy Alliance analysis of leasing statistics at BLM state offices in Colorado,
Montana/Dakotas, New Mexico, Utah and Wyoming

tration does it by making the leasing process
so difficult and the permitting process so
slow, burdensome and cumbersome that
no one is willing to make the investment."
Meanwhile, Naatz notes, anti-development groups increasingly favor organizing protests at federal lease sales. "They
let it be known that they intend to shut
down a lease sale and the agency responds
by deferring or cancelling the sale," he
relates. "If there is no lease sale, there is
no way for companies to access federal
lands and the energy stays in the ground."
Habit Forming
Noting the growing number of cancelled
lease sales, the Alliance says it has urged
the Bureau of Land Mangement to consider
replacing in-person sales with online lease
auctions. Online auctions will return leasing
to a more orderly practice and reduce venue
expenses in the process, Sgamma holds.
In a February 2016 letter to BLM Director
Neil Kornze, Sgamma points out that despite
legal requirements commanding BLM to
hold quarterly sales, the bureau has failed
to meet this requirement several times in
the last few years. Recent lease sale cancellations by BLM offices in the West "suggest a habit is forming," she writes.
Industry advocates also are concerned
that the bureau "is bowing to pressure
from the keep-it-in-the-ground movement,
whose demands are so radical as to
suggest a halt to all leasing. That agenda
is antithetical to the principles of multiple
use and sustained yield, and a violation
of the law," Sgamma adds.
When BLM cancelled a November
2015 lease sale in Utah because it could
not accommodate an unusually large turnout,
the Alliance expressed its sympathies, since
a flood of protesters would have inundated
the scheduled venue. Unfortunately, Sgamma suggests, overwhelming the venue
"now seems to be a tactic of those wishing
to stop all leasing, and protestors have
forced BLM into a patterned response."
According to Naatz, at the policy level,
the Obama administration has diverged
from a doctrine of multiple use-which
allows for agriculture, energy and mineral
production-to uphold the single use of
recreation. "It has turned the whole process
on its head," he characterizes. "There
should be spirited debates and discussions
about the appropriate use of public lands.
But we are not talking about national
parks. These are lands designated for
multiple use and the BLM has a legal
mandate to manage those uses for everyone's benefit."
APRIL 2016 117
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