Southern Utah Energy Plan Isn’t Review Ready

(CN) - Environmentalists cannot challenge suspended oil-and-gas leases near national parks in southern Utah, the 10th Circuit ruled, saying the plans are not ripe.

Hoping to extract oil from tar sands, Kirkwood Oil and Gas applied to convert 39 oil-and-gas leases to combined hydrocarbon leases (CHL) in the early 1980s.

Between 2006 and 2008, the Bureau of Land Management (BLM) and the Interior Board of Land Appeals issued several decisions that "suspended" the leases pending review of the conversion applications.

But the Southern Utah Wilderness Alliance (SUWA) said the bureau never acted on the proposals, and that Kirkwood failed to make required rental payments during the suspension period.

The environmentalists also said the bureau granted some leases without approval from the National Park Service - all in alleged violation of the Mineral Leasing Act and the Combined Hydrocarbon Leasing Act.

SUWA, on behalf of several environmental groups, filed a federal complaint in 2007 against the BLM, the land appeals board, Kirkwood Oil and William Kirkwood. The Natural Resources Defense Council, the Wilderness Society, the National Parks Conservation Association and Grand Canyon Trust joined as co-plaintiffs.

They said that, regardless of whether the leases were ultimately converted or remained traditional oil-and-gas leases, the development would dramatically impact air quality, wildlife and wilderness on and near national parks.

A federal judge ultimately held that the groups lacked standing and that they failed to establish an injury in fact. Though the court let the groups submit additional affidavits, these documents did not sway the court, which found that the environmentalists had failed to show that they visited each of the leased areas.

The 10th Circuit affirmed on a different basis last week, finding that the lawsuit was not ripe for review.

"The District Court misapplied the law when it rejected SUWA's standing on the basis that the affidavits failed to show its members have visited each of the leases at issue," Judge Stephanie Seymour wrote for a three-judge panel. "Neither our court nor the Supreme Court has ever required an environmental plaintiff to show it has traversed each bit of land that will be affected by a challenged agency action."

"The question here is not whether SUWA is a proper party to challenge BLM's decision, but when it can do so," Seymour added.

"What SUWA characterizes as the 'reissuance' of the leases, when BLM deemed them to be in suspension rather than terminated, were not the result of recent successful bids by Kirkwood. They were instead interim decisions of the agency as part of the process of deciding whether to grant Kirkwood's application for CHL leases. Accordingly, we conclude there has not been a consummation of the agency's decision making process sufficient to support litigation of the issue SUWA seeks to raise."

Kirkwood took no action to develop or convert the leases "in decades," and it "consistently disclaimed any right to engage in operations on the leases while its CHL applications are under review," the 34-page ruling states.

"Given Kirkwood's representations to us and to the district court that it cannot utilize the leases while its CHL applications are pending, it appears unlikely that Kirkwood will seek to engage in any oil and gas development on the leaseholds until its CHL applications are resolved," Seymour wrote. "Thus, the challenged decisions have had no immediate impact on the interests SUWA seeks to protect."

She added: "Although the issues here are predominantly legal questions, the validity of SUWA's claims will be best adjudicated once the facts have been further developed and it becomes clear what type of oil and gas development Kirkwood will ultimately be allowed to engage in, if any. ... There is simply too much uncertainty as to when and what type of drilling, if any, will occur on the 39 contested leases," Seymour added, remanding the lawsuit to district court with instructions to dismiss without prejudice.

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