COMPLIANCE WITH LAND USE PLANNING AND NEPA PRIOR TO ISSUANCE OF FEDERAL OIL AND GAS LEASES

• Jurisdiction: United States

REGULATION AND DEVELOPMENT OF COALBED METHANE
(Nov 2002)
CHAPTER 15A
COMPLIANCE WITH LAND USE PLANNING AND NEPA PRIOR TO ISSUANCE OF FEDERAL OIL AND GAS LEASES
Denise A. Dragoo
Snell & Wilmer
Salt Lake City, Utah

I. INTRODUCTION

The tremendous increase of coalbed methane (CBM) exploration and development occurring in the Powder River Basin (PRB) of Wyoming and Montana has tested the limit; of existing land use plans governing federal lands. The Bureau of Land Management (BLM), as land management agency within the U.S. Department of the Interior (Department), developed Resource Management Plans (RMPs) for the PRB some 10-15 years ago, prior to commercial-scale CBM development. BLM has recognized the need to update all 162 of its land use plans under the Federal Land Policy & Management Act of 1976 (FLPMA),¹ and National Environmental Policy Act of 1969 (NEPA).² Priority has been given to RMPs affecting the National Energy Policy and the BLM has recently undertaken environmental in pact statements (EISs) addressing CBM development within RMPs for both the Montana and Wyoming PRB.³ The Draft EIS and Draft Planning Amendment for the PRB Oil and Gas Project (WY-070-02-065) released in January 2002, proposes to amend the Buffalo and Platte River RMPs and develop some 39,400 new CBM wells over a 10-year period in the 8 million acre project area encompassing Campbell, Converse, Johnston and Sheridan Counties, Wyoming. In Montana, BLM is amending the Billings and Powder River RMPs to address CBM development. BLM and the State of Montana are preparing a joint E IS accompanying the RMP amendments to address oil. and gas (and CBM) leasing decision on state and federal lands.⁴

Under current BLM policy, existing land use decisions remain in effect during the amendment of RMPs, unless decisions are specifically determined to violate federal law.⁵ Leasing may occur during the amendment process so long as it does not constrain the choice of reasonable alternatives under consideration.⁶ Therefore, the Wyoming and Montana L BLM state offices have been proceeding with competitive oil and gas lease sales in the PRB every sixty days. These leasing decisions have been challenged by environmental groups in both

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states. In Wyoming Outdoor Council (WOC),⁷ the Interior Board of Land Appeals (IBLA) reversed BLM's decision to issue oil and gas leases with potential for CBM development within three parcels offered in the February 2000 lease sale. The IBLA found the Buffalo RMP/EIS insufficient to support BLM's leasing decisions. On October 15,2002, the WOCdecision was reconfirmed by the IBLA and BLM's petition for reconsideration was denied.⁸ Wyoming Outdoor Council has protested every lease sale by Wyoming BLM with CBM potential since February, 2000, and appeals on some 40 leases are pending before the Department.⁹

Environmental groups in Montana have bypassed this administrative forum, instead filing a complaint directly in federal district court to challenge the issuance of all federal CBM leases within Montana's Billings and Powder River Basin resource areas.¹⁰ Northern Plains Resource Council (NPRC) seeks an order canceling, or in the alternative, suspending all surface operations on approximately 575 federal leases issued to some 40 operators until a pre-leasing EIS is completed. NPRC asserts that the Billings and Powder River RMPs fail to address the impacts of CBM development. The pending Montana Statewide Oil and Gas DEIS and Amendment of the Billings and Powder River Resource Areas RMPs released in January 2002, addressing CBM impacts, has yet to be finalized. Therefore, NPRC alleges that BLM's continued lease of CBM minerals without a pre-leasing EIS violates NEPA and FLPMA.

In addition, the DEIS for pending RMP amendments in both states have been rated by the United States Environmental Protection Agency (EPA) Region 8 as "environmentally unsatisfactory" due to the alleged impact of CBM development on irrigated agriculture. By letters dated May 15, 2002, EPA further asserts that CBM development presents interjurisdictional water quality issues and recommends a combined NEPA analysis for the Wyoming and Montana PRB.¹¹

The purpose of this paper is to consider the IBLA's decision in Wyoming Outdoor Council and pending litigation challenging CBM leasing in the Wyoming and Montana PRB in the broader context of BLM's efforts to update its RMPs nationwide. This litigation has immediate impact on RMPs prioritized for update under the National Energy Implementation

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Plan.¹² Specifically, the paper considers what NEPA analyses are needed to support CBM leasing decisions under RMPs, how project-level and site-specific environmental analysis are "tiered" to these RMPs, and in turn update and amend the RMP; the impact of this dynamic process on oil and gas leases suspended or amended in response to a new round of land use plan amendments and revisions; and finally, an examination of reform efforts to streamline the BLM's planning process and NEPA analysis.

Peter Schaumberg, Deputy Associate Solicitor, Mineral Resources, U.S. Department of the Interior, will discuss the procedural posture of the Wyoming Outdoor Councildecisions and provide commentary from the Department's perspective as a co-presenter on this topic.

II. BLM LAND USE PLANNING

A. Overview

1. FLPMA Land Use Plans

FLPMA requires that public lands be managed under the principles of multiple use, in accordance with the land use plans developed under Section 202 of the Act.¹³ Mineral resources are among a variety of potentially competing resource values incorporated by Congress under the term "multiple use."¹⁴ With respect to oil, gas and CBM resource 3, FLPMA also requires that "the public lands be managed in a manner which recognizes the nation's need for domestic sources of minerals."¹⁵

The RMP is the basic planning tool which governs decisionmaking on public lands. Under FLPMA, the RMP serves as a regional land use plan to define broad, long-term,¹⁶ multipleuse objectives and resource uses for the public lands. The RMP inventories resources within geographic management areas and determines whether areas are open or closed to certain land uses. Areas of critical environmental concern and areas unsuitable to surface coal mining are designated in the RMP.¹⁷ The BLM must assure that its land use decisions conform to the RMP and other local, state, federal and tribal plans.¹⁸

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The RMP has been compared to a local zoning plan or general land use code.¹⁹ The plan identifies general categories of land use and those lands available for those uses. The RMP does not approve any specific action or leasing decision. Assuming that BLM follows the general process for adopting an RMP, and considers multiple uses, it has broad discretion to select the mix of uses under the RMP.²⁰ Appeal of RMPs is exclusively to the BLM State Director²¹ whose decision is the final decision of the Department; subject to appeal to district court under the federal Administrative Procedures Act (APA).²² Therefore, the IBLA does not have authority to review the RMP itself, only the site-specific application of the RMP.²³

In sum, while FLPMA does not provide detailed planning guidelines, it does require that RMPs be developed, following an "interdisciplinary approach" developed with public involvement and in coordination with other federal, state and local plans.²⁴

2. Integration of NEPA Into Land Use Plans

Each RMP and plan revision is a "major federal action significantly affecting the human environment" requiring an EIS under § 102(2)(C) NEPA.²⁵ NEPA also provides the process for public involvement, including notice and comment, on RMP adoption and amendment.²⁶ The regulations of the Council on Environmental Quality (CEQ) implementing NEPA require public involvement in defining the scope of the environmental analysis and in commentary on the Draft and Final EIS accompanying the proposed RMP.²⁷ In addition to public comment, the RMP/DEIS is subject to adequacy review by the EPA under § 309 of the Clean Air Act and CEQ rules at 40 C.F.R. §§ 1500-1508 . A DEIS found by the EPA to be environmentally unsatisfactory may be referred to CEQ.

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CEQ rules give form to FLPMA's general planning procedures. The nine-step process for preparing RMPs or plan amendments set forth at 43 C.F.R. § 1610.4 reflects the major steps outlined in CEQ regulations for preparing an EIS. Compare 43 C.F.R. § 1610.4 with 43 C.F.R. § 1501.7 (scoping), § 1502.15 (alternatives), § 1502.16 (environmental assurances) and § 1505.2(c) (monitoring). The proposed RMP or RMP amendments are generally integrated into the RMP/EIS and circulated as one document.²⁸ Once the RMP/EIS is final, a separate decision adopting or amending the RMP is set forth in a record of decision (ROD). The RMP/EIS supports the ROD adopting the RMP which must be appealed to the State Director and the RMP/EIS is subject to the same deferential standard of judicial review under the APA.

The RMP and the RMP/EIS are subject to review by the IBLA, only "as applied" to specific resource decisions such as oil and gas leasing. The IBLA will consider whether the environmental analysis is adequate under § 102(2)(C) of NEPA to support the land use decision. The RMP/EIS must reflect that BLM has "taken a 'hard look' at the environmental consequences of a proposed action" under Kleppe v. Sierra Club, 437 U.S. 390, 410 n. 21 (1976). The BLM must be fully informed regarding the environmental consequences of its decision.²⁹ However, the IBLA applies a deferential standard and BLM's decision will not be overturned unless it is shown by a preponderance of the evidence that it failed to consider "substantial environmental questions of material significance."³⁰

In addition, the IBLA requires plaintiffs to exhaust administrative remedies and establish standing, under the "case or controversy"...