The Bureau of Land Management (BLM) has agreed to restrict fast tracking natural gas and oil drilling applications on federal lands under a settlement agreement concerning Utah’s historic Nine Mile Canyon.

The settlement agreement, which was issued March 30 by the Department of Interior, was filed in U.S. District Court, District of Utah Central Division (Nos. 2:08 CV586 DB).

Nine Mile Canyon Coalition, Southern Utah Wilderness Alliance (SUWA) and The Wilderness Society in 2008 filed a lawsuit challenging BLM’s Price, UT, regional office, and Bill Barrett Corp. after Barrett was given permission to drill 30 gas wells in the West Tavaputs area of Nine Mile Canyon (see Daily GPI, Aug. 8, 2008). BLM faced a similar legal challenge concerning Barrett and Nine Mile Canyon activity in 2004 (see Daily GPI, April 27, 2004).

BLM approved Barrett’s drilling plan using a categorical exclusion, or CX, which allowed certain projects to proceed without a rigorous examination of potential environmental impacts. Under the Energy Policy Act of 2005 (EPAct), one broad environmental impact statement (EIS) under one drilling application could serve as an EIS for all subsequent requests.

Environmental groups weren’t alone in their concern about the consequences of gas drilling in the Nine Mile Canyon area, which includes an archaeological discovery that is home to more than 10,000 known ancient Puebloan rock-art images and ruins. Before the environmental groups legally challenged the permits, the U.S. Environmental Protection Agency voiced its concerns that Barrett’s gas drilling plan should not be allowed to proceed until an environmental study had detailed air quality impacts to the region (see Daily GPI, May 30, 2008).

BLM and Barrett late last year announced a landmark agreement to protect Utah’s cultural resources while permitting “orderly and environmentally responsible” gas development on the West Tavaputs Plateau (see Daily GPI, Dec. 24, 2009).

However, the 2008 lawsuit and EPA’s concerns about how BLM issued drilling permits triggered an investigation by the Government Accountability Office (GAO) (see Daily GPI, Oct. 10, 2008). GAO looked into the way BLM may have bypassed some environmental reviews to issue drilling permits on public lands in Utah, New Mexico and Wyoming. The GAO determined that BLM was “out of compliance” with the EPAct and it raised concerns about BLM’s use of CXs.

Under the settlement agreement, BLM has agreed not to use CXs that are allowed under the EPAct specifically in the West Tavaputs gas field project area until an EIS or environmental assessment on gas development is completed.

BLM also is to issue an instruction memorandum to modify its National Environmental Policy Act (NEPA) Handbook, which states that future EPAct CXs would not be used when there are “extraordinary circumstances” present.

Barrett said it did not object to the terms of the settlement. Environmental groups said the agreement was timely.

“The Wilderness Society and the Southern Utah Wilderness Alliance…emphasize that these categorical exclusions are still available, but will be treated in the same manner as all other such exclusions from review under the National Environmental Policy Act, as Congress intended,” stated SUWA and other groups involved in the settlement agreement.

“The terms of the settlement agreement require that BLM ‘think first, then act’ in its approvals of oil and gas drilling on public lands,” said SUWA spokesman Stephen Bloch. This “clarifying policy does not hinder energy development in the U.S., but instead creates a clear playing field for companies who wish to develop on public lands. Returning common sense and consistency to the use of categorical exclusions will avoid further litigation and improve management of these public lands.”

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