Oil groups push for voluntary lease review in long-running sage grouse dispute

(CN) — Oil leaseholders joined the Trump administration’s Bureau of Land Management on Monday in urging a federal judge in Montana to allow the agency to reassess six leasing decisions on imperiled sage grouse habitat before the court moves to the next phase of the complicated environmental case.

“Allowing that voluntary remand, allowing that time for review, taking into account the new facts and circumstances that should change some of these leasing decisions on a lease-by-lease basis would allow for a more focused judicial review,” argued Bret Sumner, attorney representing one of the intervening defendants, Western Energy Alliance.

In 2015, the Bureau of Land Management created a prioritization scheme for leasing in or around sage grouse habitat. The bird species is native to the western U.S. and Canada and has been in decline for decades due to habitat loss. But after President Donald Trump took office for his first term the following year, the Bureau of Land Management issued new guidance rolling back those priorities.

In 2018, a coalition of conservation groups led by the Montana Wilderness Federation and the Wilderness Society challenged those Trump administration policies that removed protections for greater sage grouse.

In the seven years since the case was first filed, 10 appeals have been opened in the Ninth Circuit regarding various court decisions. The most recent decision from the Ninth Circuit held that the Bureau of Land Management violated its own plans to protect sage grouse and found that the Montana federal court properly vacated a Wyoming lease sale.

Now, the Bureau of Land Management — joined by a group of oil stakeholders and the state of Wyoming — is asking the court to let it reassess the challenged leases given a recent change in law. That change refers to the One Big Beautiful Bill Act, which the defendants say has significantly altered how the government must consider expressions of interest in its leasing process.

Luke Hajek, a Justice Department attorney, explained that the Act changes the timeline.

“When BLM receives an expression of interest for a parcel, it must make that parcel available for leasing within 18 months as long as that parcel is available,” Hajek said.

This, plus the assertion that there has been little development on challenged lease sales at issue in the next phase of the case, gives a strong justification for allowing the agency to go back and assess the leases on its own, he argued.

Phase Three of the case involves four oil and gas leasing decisions in Wyoming and two in Montana. Among those, there are only 16 producing oil and gas wells.

U.S. District Judge Brian Morris, a Barack Obama appointee, noted that the original sage grouse prioritization objective was partially driven by an effort to avoid Endangered Species Act protections for the species and questioned whether federal protections would come back in play and further complicate matters.

Hajek explained that the proposed plans wouldn’t eliminate any requirement to consider sage grouse habitat in leasing decisions, but the prioritization objective itself would be removed.

The oil industry defendants told the court they support a parcel-by-parcel review of each lease on remand.

“We’re not seeking to have every lease affirmed,” Sumner said.

But the conservation groups raised doubts that the defendants were acting in good faith.

“At bottom, what BLM is seeking here is to avoid vacatur of the Phase Three leases,” said Michael Freeman, attorney for the conservation groups.

He argued that the defendants were trying to skirt the most recent Ninth Circuit decision that he said gave the lower court a “clear path for how to resolve the central issues” in this phase of the case.

Freeman said that voluntary remands are meant to allow agencies to correct errors in earlier decisions, which he argued isn’t what’s happening in this case.

“It’s not intended as a tool to shut down a meritorious lawsuit after the agency gets an adverse ruling,” Freeman said

Instead, the conservation groups argued that the court should continue onto Phase Three of the lawsuit and the oil and gas companies can individually ask for relief from the court if one of their leases is affected.

Morris noted that going forward with the lawsuit would require the court to consider the case based on the laws in place at the time it was filed. He questioned whether it would be better to proceed on that basis and deal with new lease applications under current law later, or remand to let the agency consider the leases under current law now.

“Which one would waste fewer of the court’s resources?” Morris asked.

Freeman argued that the most efficient path forward would be to proceed with the current case following the Ninth Circuit’s guidance.

“The law that BLM needs to apply is the law at the time of these lease sales, back in 2019 and 2020, not any recent changes to the law,” Freeman said.

The conservation groups want the court to invalidate the leases, vacate them and remand it back to the agency and give it a “clean slate.”

“Slates are rarely clean in this context,” Morris remarked.

The conservation groups still maintain that moving forward with the case is the best option to protect the imperiled species.

“Sage grouse haven’t recovered yet and continue to need the protection that BLM provided them in its 2015 plans,” Freeman said.

Morris said he would try to issue a ruling before the end of the year.