American Oil and Gas Reporter - February 2017 - 18

IndustryDigest
Obama Blocks Activity
On Public Lands
In Three Western States
WASHINGTON-During his final
weeks in office, President Obama and
his Department of Interior moved to
stymie mineral development on public
lands in Utah, Nevada and Montana.
With regard to Utah and Nevada,
Obama blocked development by
creating a pair of new national
monuments: The Bears Ears National
Monument in Utah, and the Gold Butte
National Monument in Nevada.
According to published reports, Bears
Ears covers 1.35 million acres, and
Gold Butte spans 300,000 acres.
Existing authorized land uses that are
environmentally benign may continue,
as can valid existing rights for oil, gas
and mining operations, as well as utility
corridors and military training
operations, the reports indicate.
According to the press accounts, a
coalition of Native American tribes
urged the administration to make the
designations, which it did on Dec. 28.
A couple weeks later, on Jan. 10, the
Bureau of Land Management under
Obama's Department of Interior
canceled the final two oil and gas leases
in the Badger-Two Medicine area within
the Lewis and Clark National Forest in
Northwest Montana. According to DOI,
the cancellations address outstanding
concerns about the potential for oil and
gas development in a culturally and
ecologically important area. BadgerTwo Medicine is a 130,000 acre area,
bounded by Glacier National Park, the
Bob Marshall Wilderness, and the
Blackfeet Indian Reservation. The
canceled leases were issued in the
1980s, but there has been no drilling in
the area.
Montana Petroleum Association
Executive Director Alan Olson blames
decades of political maneuvering by
environmental groups and tribes for the
lack of activity. "The announcement to
cancel the remaining oil and gas
exploration leases in the Badger Two
Medicine comes as no surprise," he
conveys. "The leases are just another
casualty of the Obama administration's
politicized energy agenda."
In 2016, Interior Secretary Sally
Jewell cancelled 16 leases in the area,
which were held by Solenex LLC and
Devon Energy. The newly cancelled
18 THE AMERICAN OIL & GAS REPORTER

leases are held by J.G. Kluthe Trust of
Nebraska and W.A. Moncrief Jr. of Texas.
"We are proud to have worked
alongside the Blackfeet Nation and the
U.S. Forest Service throughout this
process to roll back decades-old leases
and reinforce the importance of
developing resources in the right way
and the right places," relates Interior
Secretary Sally Jewell. "The
cancellation of the final two leases in
the rich cultural and natural BadgerTwo Medicine Area will ensure it is
protected for future generations." ❒

EPA Agrees To Review
Oil, Gas Waste Rules
WASHINGTON-The U.S. District
Court for the District of Columbia on
Dec. 28 signed a consent decree between
the U.S. Environmental Protection
Agency and a coalition of environmental
organizations, requiring the agency to
review and potentially update its rules for
handling oil and gas wastes.
The consent decree is the result of a
lawsuit, Environmental Integrity Project
et al. v. McCarthy, which the
environmental groups filed in May. The
lawsuit alleged EPA "failed to meet
continuing nondiscretionary duties
under the Resources Conservation and
Recovery Act . . . to review and revise
regulations and guidelines to keep up
with this growing source of wastes, and
the threats these wastes pose to human
health and the environment" (AOGR,
June 2016, pg. 14).
The consent decree signed by U.S.
District Judge John D. Bates obligates
EPA, no later than March 15, 2019, to
either begin a rule making to revise its
Subtitle D regulations pertaining to oil
and gas wastes, 40 CFR Part 257, or
make a determination that it is not
necessary to revise its regulations. If
EPA determines a rule making is
required, the consent decree mandates a
final rule by July 15, 2021.
A statement from the Environmental
Integrity Project (EIP) notes that the
lawsuit challenges the disposal of
"fracturing wastewater" in underground
injection wells. It also urges EPA to ban
the spreading of fracturing wastewater
onto roads or fields, and "to require
landfills and pits be built with adequate
liners and structural integrity to prevent
spills and leaks."

Joining EIP in the lawsuit were the
Natural Resources Defense Council,
Earthworks, Responsible Drilling
Alliance, San Juan Citizens Alliance,
West Virginia Surface Owners' Rights
Organization, and the Center for Health,
Environment and Justice. ❒

BOEM Hits Pause On
New Requirements For
Financial Assurance
WASHINGTON-Oil and gas industry
representatives are applauding a decision
by the Bureau of Ocean Energy
Management to postpone by six months
new financial assurance requirements for
facilities on the country's Outer
Continental Shelf. The higher bonding
requirements, set in BOEM's Notice to
Lessees No. 2016-N01, Requiring
Additional Security, regulate a lessee's
obligations for decommissioning wells,
platforms and pipelines on the OCS.
In a Jan. 6 announcement, BOEM
suggests lease and/or grant obligations
with more than one responsible party
entail less programmatic risk, and
acknowledges the challenges and time
requirements associated with arranging
financial matters within multiparty
business relationships. Moreover, it
allows, since non-sole-liability
properties may include several colessees and prior interest owners, their
existing financial arrangements may
require BOEM to assess the extent to
which it can consider those in assessing
the need for additional security.
"Therefore, in order to provide
BOEM and industry the opportunity to
focus on providing additional security
for sole liability properties, and to allow
an opportunity for additional time and
conversation . . . regarding issues that
arise in the context of non-sole-liability
properties, BOEM will extend the
implementation timeline for NTL 201601 by an additional six months as to
leases, rights of way, and rights of use
and easement for which there are colessees and/or predecessors in interest,
except in circumstances in which
BOEM determines there is a substantial
risk of nonperformance of the interest
holder's decommissioning liabilities,"
the agency states.
Among those lauding the decision
are the California Independent
Petroleum Association, Independent
American Oil and Gas Reporter - February 2017

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