Court of Appeals Finds Coalbed Methane Leases Illegal

Ruling may have widespread implications for Western energy production


Susan Daggett, Earthjustice, 303-249-0980

On August 10, 2004, the Tenth Circuit Court of Appeals ruled that the federal Bureau of Land Management sold three coalbed methane leases in the Powder River Basin of northeast Wyoming in violation of the law. The ruling reversed a federal district court ruling that the leases were legal.

Earthjustice, representing four conservation groups, argued that the BLM violated the National Environmental Policy Act by relying on an outdated plan — drafted in 1985 — that did not consider the impacts of coalbed methane development before it sold the leases at issue. Coalbed methane differs from conventional oil and gas extraction. Coalbed methane is extracted by a process that requires pumping water from coal-seam aquifers to the surface. Not only can this leave ranchers and others who depend on these aquifers high and dry, the often salty and mineral-rich water can kill crops, other plants, and fish once it is pumped to the surface. BLM approved the coalbed methane leases at issue without considering these effects.

The Department of Interior’s Board of Land Appeals agreed with conservationists that these impacts were significantly different from conventional oil and gas development and told BLM to go back and do the necessary environmental analysis. The gas company that bought the development rights then successfully sued in a Wyoming federal district court to reverse the IBLA. At that point, the federal government abandoned its defense of the Interior Department’s ruling, leaving Earthjustice to defend the decision in the court of appeals.

In the appeals court, Judge Mary Beck Briscoe, writing for a unanimous panel, ruled that there was sufficient evidence for the Department of Interior to find that the BLM’s environmental review was inadequate because it failed to address “significant new environmental concerns” associated with coalbed methane production. The Tenth Circuit concluded by reversing the district court’s decision with an instruction to reinstate the decision of the Department of Interior.

“This decision strikes a balance between our need for energy and our commitment to get it in environmentally responsible ways,” said Earthjustice attorney Susan Daggett. “As usual, this was a case of gas companies and the federal government being in a hurry to get at the energy in ways that threatened the environment. Truth is, if they take a bit more time they can consider ways to do things right and leave us all with a cleaner and healthier environment.”

This decision, while it only directly affects a few leases, has sweeping implications for the way BLM permits oil and gas development on the public lands in the intermountain West. The Tenth Circuit’s ruling will help Earthjustice and others to ensure that the BLM looks before it leaps ahead with leasing for coalbed methane by taking the time to do thorough, up-front analyses of the environmental consequences to the people and wildlife that make this region their homes.



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