In the wake of a Wyoming court’s recent decision rejecting the Bureau of Land Management’s (BLM) restrictions on categorical exclusions (CX), an agency official told Congress Friday that it plans to undertake a formal rulemaking of the waiver of environmental reviews for certain onshore oil and natural gas drilling projects. House lawmakers also said they planned to petition the Department of Justice (DOJ) to appeal the court ruling (see Daily GPI, Aug. 16).

“In the near term, the BLM plans to initiate a rulemaking effort to establish guidelines for using the Section 390 CXs for oil and gas,” BLM Deputy Director Mike Pool said during an oversight hearing of a House Natural Resources subcommittee. The Energy Policy Act of 2005 established CXs — or waivers of environmental reviews in certain cases — to fast-track domestic oil and natural gas development.

The BLM’s announcement of a rulemaking comes only weeks after a federal court in Wyoming rejected 2010 guidance from the Interior Department’s BLM and Department of Agriculture’s U.S. Forest Service, which limited the use of Section 390 CXs. “In 2010, conceding to pressure from environmental groups, the Obama administration adopted new rules to essentially halve the use of Section 390 categorical exclusions for energy projects, and they reinstated the burdensome and duplicative review process that has plagued the energy industry with delays, lengthy review processes and onerous lawsuits,” said Rep. Doug Lamborn, chairman of the House Subcommittee on Energy and Minerals (see Daily GPI, May 18, 2010).

The Western Energy Alliance (WEA) challenged the May 2010 guidance as “arbitrary, capricious and contrary to the law.” In mid-August, the U.S. District Court for the District of Wyoming overturned the guidance and reinstated the CXs for oil and gas.

Rep. Rush Holt (D-NJ) said he and Rep. Edward Markey (D-MA), the ranking minority for the House Natural Resources Committee, intended to send a letter Friday to DOJ urging it to appeal the court’s decision. “An appeal and stay of the court’s ruling would remove any uncertainty while the BLM completes its rulemaking,” he said.

CXs “have been under attack since day one,” said Kathleen M. Sgamma, director of government and public affairs for WEA. “That criticism would be highly appropriate if CXs absolved companies from all environmental regulations, but they do not. They merely remove a redundant layer of NEPA [National Environmental Policy Act] analysis.”

She said the WEA represents more than 400 small businesses and independent producers operating on public lands in the West, which provide 27% of the nation’s natural gas and 14% of its oil production.

“By 2020 we could produce as much oil and gas in the West as the U.S. currently imports from Russia, Iraq, Kuwait, Saudi Arabia, Venezuela, Algeria, Nigeria and Columbia combined. We hope to achieve that potential if government red tape doesn’t stand in the way,” Sgamma said.

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