Lawsuits cause coalbed methane uncertainty

By DUSTIN BLEIZEFFER
Casper Star-Tribune

GILLETTE – After more than seven months, U.S. District Judge Alan Johnson in Cheyenne is still deliberating two lawsuits against the Bureau of Land Management for its authorization of 51,000 coalbed methane wells in the Powder River Basin.

If the BLM position is upheld, it could restore confidence in the coalbed methane industry and spur drilling and production in northeast Wyoming. If Johnson determines the BLM didn’t live up to its duty to fully analyze impacts, the industry could face a series of injunctions, delays and additional studies.
That uncertainty, combined with a series of other related legal upsets in recent months, is cause for a lot of heartburn among those in the industry.

“There are a lot of issues out there on the table, yet,” said Bruce Hinchey, president of the Petroleum Association of Wyoming. “I think it causes a lot of uncertainty, because you never know where it’s going to end up if (drilling is) going to be shut down later, or even shutting in existing wells. Hopefully neither.”

Right now, gas prices are strong, and the industry is on track to drill up to 3,000 new wells in the basin this year. But several landowner and conservation groups suing the BLM are feeling more confident about the prospect of the industry continuing its losing streak in court.

Earlier this month, U.S. Magistrate Richard Anderson in Billings ruled that the BLM’s study of coalbed methane development in that state was inadequate.

One potential outcome might be a switch to a more controlled “phased development” plan in order to more closely monitor the industry’s impacts.

“That’s what we asked for in our case in Wyoming, as did the (Environmental Protection Agency) and other government agencies,” said Keith Bauerle, attorney for the EarthJustice Legal Defense Fund.

EarthJustice is representing the Western Organization of Resource Councils in its lawsuit against the BLM and the U.S. Department of Interior. Judge Johnson heard arguments in the case in July and is still deliberating.

Bauerle said there are many parallels in that case and the Montana case that went against the BLM. However, the Montana decision could have little or no impact on Johnson’s ruling.

“We just sent the Montana decision to the Wyoming District Court to let them know that it happened,” Bauerle said. “We’re hopeful, but there’s no telling what will happen.”

In the Montana case, Judge Anderson said because no previous study had ever analyzed the environmental effects of coal-bed methane development in the area, the environmental impact statement was “precisely the place for BLM to consider alternatives varying the pace and geographical sites of development.”

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