Today, a coalition of conservation groups filed a formal request to intervene in an industry lawsuit in order to defend the Bureau of Land Management’s oil and gas leasing rule finalized in April. The rule contains decades-overdue fiscal reforms, including changes to reclamation bonding and royalty rates.
Under the old rules, reclamation bonding requirements fell far short of the actual costs associated with reclaiming oil and gas drilling activities. Companies were only required to pay $10,000 in bonding for a single lease, which usually contained multiple wells. The new rules bump that up to $150,000, which is an improvement, but still falls short of the costs to plug and remediate even two wells. The rule does not require oil and gas companies to pay the full cost of remediation—something the groups seeking intervention urged in their comments on the rule. Even so, the industry is literally making a federal case out of being asked to pay a marginally larger—but still incomplete—share of its own business costs.
“The reforms in the 2024 Bureau of Land Management oil and gas leasing rule represent the first comprehensive update to federal onshore oil and gas leasing regulations in nearly 40 years,” said Ally Beasley, attorney at the Western Environmental Law Center. “With hundreds of thousands of orphaned and abandoned oil and gas wells across the U.S. in urgent need of plugging and remediation as a result of inadequate bonding—a number that is constantly growing—reforms are crucial for public health and environmental protection. The 2021 Infrastructure Investment and Jobs Act appropriated $4.7 billion to clean up orphaned and abandoned wells. Industry must be held responsible for cleaning up the messes it creates—not taxpayers. The Bureau clearly has the authority to adjust bonding rates, a basic premise the industry plaintiffs seek to deny.”
“The rule’s bonding reforms are a much-needed improvement, even if they don’t cover the full cost of plugging and remediation,” said Hallie Templeton, legal director at Friends of the Earth. “Industry’s lawsuit makes it clear they would rather have taxpayers pick up the tab to clean up oil and gas sites and ignore the growing orphaned and abandoned well problem. Big Oil should use its massive profits to clean up its act and prevent even more damage to our planet.”
“Adequate reclamation bonding for oil and gas activities is the cost of doing business, and the industry’s attempt to weasel out of that obligation is both predictable and abhorrent,” said Derf Johnson, deputy director of the Montana Environmental Information Center. “As we wind down oil and gas leasing on federal lands, we need to assure that the disturbed lands are fully and adequately reclaimed, and that taxpayers are not left with the bill.”
“These are common-sense reforms intended to make sure taxpayers don’t have to foot the bill for oil and gas companies when they fail to clean up their own mess,” said Connie Wilbert at the Sierra Club’s Wyoming Chapter. “No one should be surprised when fossil fuel companies don’t want to pay for their pollution.”
“The increased bonding requirements are common-sense reforms requiring oil and gas operators to pay to clean up the environment they have altered and degraded through their operations,” said Natasha Léger, executive director, Citizens for a Healthy Community. “It still doesn’t come close to the cumulative costs of their impacts to water, wildlife, ecosystems, and climate, but it’s a long-overdue start.”
“It is crucial that we uphold the 2024 BLM Onshore Oil and Gas Leasing Rule,” said Dr. Barbara Vasquez, Chair of the Western Organization of Resource Council’s Oil and Gas Campaign Team. The financial updates, some 60 years in the making, codified in the Rule will help solve the orphaned well crisis that has been spiraling out of control for decades. It also increases revenue paid by operators for extraction of our public resources. This long overdue Rule will help ensure that we all can enjoy a safe and healthy community with clean air and water, wildlife, and recreation opportunities.”
“It’s a welcome shift that this rule makes the oil and gas industry pay for some of the environmental damage from their toxic extraction,” said Maggie Coulter, an attorney at the Center for Biological Diversity’s Climate Law Institute. “This is one important step in relieving taxpayers from the burden of cleaning up polluters’ messes. The best move would be ending federal oil and gas leasing altogether to protect our public lands for people and wildlife.”
The Bureau’s authority to manage public lands (the Federal Land Policy and Management Act of 1976) stems from the property clause of the U.S. Constitution—the apex of the federal government’s authority. The Bureau’s considerable authority over mineral production on federal lands clearly includes establishing adequate bonding and royalty rates. In fact, conservation groups maintain that the Bureau had ample authority to go much further than it did to protect public lands and those who depend on them, and address the climate crisis.
Contacts:
Ally Beasley, Western Environmental Law Center, 575-751-0351, gro.w1732086277alnre1732086277tsew@1732086277yelsa1732086277eb1732086277
Maggie Coulter, Center for Biological Diversity, 202-961-4820, gro.y1732086277tisre1732086277vidla1732086277cigol1732086277oib@r1732086277etluo1732086277cm1732086277
Natasha Léger, Citizens for a Healthy Community, 970-399-9700, gro.u1732086277oy4ch1732086277c@ahs1732086277atan1732086277
Derf Johnson, Montana Environmental Information Center, 406-581-4634, gro.c1732086277iem@n1732086277osnho1732086277jd1732086277
Brittany Miller, Friends of the Earth, 202-222-0746, gro.e1732086277of@re1732086277llimb1732086277
Deb Love, Western Organization of Resource Councils, 406-252-9672, gro.c1732086277row@e1732086277vold1732086277
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