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Federal Judge Orders Interior to Decide Wyoming, Utah Leases

A federal judge in Wyoming Thursday ordered the U.S. Interior Department to decide on 47 long-pending oil/gas leases. U.S. District Judge Nancy Freudenthal gave the federal agency 30 days to act.

Freudenthal, the wife of the immediate past two-term governor of Wyoming, David Freudenthal, made it clear that her ruling was not ordering Interior to grant the leases. An oral argument was held Wednesday by Freudenthal on the lawsuit brought by the Denver-based Western Energy Alliance on behalf of six producers against Interior Secretary Ken Salazar.

Since the 60-day time period expired months or years ago, the judge ordered Interior to act within 30 days on what are effectively nine delayed actions on Wyoming leases and 38 similar delayed actions on Utah leases.

The six oil/gas companies had submitted the high bids on the leases in the two adjoining states, and Western Energy in its lawsuit alleged that Salazar's department had failed to issue more than 100 leases. Through its Bureau of Land Management (BLM), Interior holds lease sales usually four times annually in states with oil and gas production, and under the Mineral Leasing Act (MLA), the Interior secretary is supposed to act on those lease bids within 60 days.

Federal government attorneys argued that Salazar has discretion on whether he grants the leases, but the judge ruled that this did not give him unlimited time in which to decide.

"The court agrees in part with the energy companies' argument that the secretary has exceeded his authority, but not by disregarding the [1987 federal Onshore Oil and Gas Leasing] Reform Act's 60-day lease-issuance mandate, but by disregarding the act's 60-day decisional mandate," Freudenthal said in an 18-page memorandum.

The lawsuit dealt with lease sales held in Wyoming by BLM between August 2008 and August 2010, and in Utah by the BLM in 2005 and 2006.

Freudenthal said the only question of law was whether leases had to be issued within 60 days, and on that question she rejected the producers' arguments, deciding that the broader discretion historically granted to the secretary should prevail. However, on the time limit for a decision, she supported the energy companies' arguments.

"On this point, the court agrees with the energy companies that Congress expressly directed secretarial action," the judge concluded. "However, the court does not agree that Congress directed lease issuance." To conclude otherwise, Freudenthal said, would be to "end secretarial discretion prematurely."

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