Anti-drilling forces refine legal playbook to pause permitting

Environmental groups are developing increasingly sophisticated tactics to challenge oil and gas drilling permits on public lands, the New York Times reports. The Thompson Divide Coalition's strategy in Colorado involved meticulously examining lease vulnerabilities, revealing that the federal government's haste to issue leases had left them open to legal challenges.

The groups originally tried a strategy of buying back leases, but most leaseholders declined. Yet in examining the leases for possible purchase, the Coalition realized that the federal government’s haste to issue leases had left them with vulnerabilities.

For one thing, opportunities for public comment during the leasing process appeared to be inadequate, an apparent violation of the National Environmental Policy Act. The use of fracking was also a source of weakness in the leases. The Bush administration which had overseen the leases had failed to properly analyze and account for the technology in the required environmental review process.

“The leases suffered from a number of legal deficiencies. And so we really focused our efforts there, and that’s where a more coordinated advocacy effort began.” - Thompson Divide Coalition's Head of Legal

Legal questions about the leases led to administrative challenges, which eventually sent one leaseholder to federal court against the Bureau of Land Management.

Initially, conservationists had intended to sue the government, contending that some of the leases were invalid because of noncompliance with the National Environmental Policy Act. But the work that exposed the legal and administrative problems with the leases had effectively flipped the script: The leaseholders who had declined to sell were now eyeing the exits in light of potential legal complications and public discontent around drilling.

This scrutiny of administrative processes has proven effective in other cases as well. In Wyoming, environmental groups successfully challenged the Bureau of Land Management's (BLM) environmental assessment for a 5,000-well project in Converse County. By identifying a critical error in the BLM's groundwater impact calculations - an underestimation by a factor of 10,000 - these groups were able to secure a federal court injunction on new drilling permits. This case highlights the growing importance of technical expertise in challenging energy development approvals.

The financial implications of these refined legal strategies are significant for the energy sector. Companies now face increased risks of project delays, redesigns, or cancellations due to procedural challenges in the permitting process. For investors and energy companies, this evolving legal landscape necessitates a more cautious approach to public land leases, with higher standards for data reliability and stauncher due diligence on government leasing opportunities.