BLM settlement closes oil and gas leasing loophole

SALT LAKE CITY — Backed by a critical government audit, several Utah environmental groups are cheering their success in a settlement agreement reached with the Bureau of Land Management that has the agency backing off the use of a legal loophole to grant permits for oil and natural gas wells.

Precipitated by BLM's approval of 30 natural gas wells in the Nine Mile Canyon region, the settlement precludes the agency from using "statutory categorical exclusions" to grant permits that the groups contended sidestepped consideration of environmental impacts and consequences to cultural resources.

While the settlement is "forward-looking" and does not impact those wells now in production in the Nine Mile Canyon area, environmentalists say it is a national reform of an agency policy, according to Steve Bloch with the Southern Utah Wilderness Alliance.

"This settlement tracks closely with Secretary (Ken) Salazar's announced oil and gas reforms announced in January and is an important step to bring balance and common sense back to public lands management," said Bloch, the alliance's conservation director and attorney.

"Utah's iconic public lands will be better off for the changes announced in this settlement."

However, Sen. Bob Bennett, R-Utah, reacted angrily to the settlement.

"I find it outrageous and cynical that on the same day the president is attempting to persuade Americans that he is supportive of new oil and gas development, a secret deal is announced," he said, adding that he believes the settlement guts one of the "streamlining" provisions of the Energy Policy Act.

"If President (Barack) Obama wonders why those in Congress view his administration with such cynicism, he need not look any further than actions such as this," Bennett said.

SUWA was among the groups that challenged the BLM's 2008 approval of the wells, asserting that thousands of permits were granted under the Bush administration by using the exclusion provision in the Energy Policy Act of 2005.

After the lawsuit was filed, a September 2009 report issued by the General Accountability Office found that 28 percent of drilling permits issued in fiscal years 2006 to 2008 were done through the exclusion provision, with the agency relying on the "loophole" in many instances to expedite the approval process.

By using that loophole, the GAO report noted BLM was "out of compliance" with the law and the agency's own guidance, giving rise to a lack of clarity that has "raised serious concerns."