The federal government’s moratorium on new oil and gas leases has blocked the development of more state and private mineral interests in North Dakota than it has federal interests, according to a suit filed by North Dakota Attorney General Wayne Stenehjem, and it is adversely affecting the state’s ability to efficiently regulate safe, and environmentally sound development of its natural resources.
The suit, filed Wednesday in the Western Division of U.S. District Court, says the moratorium will cost North Dakota hundreds of millions in lost revenue and asks the court to compel federal agencies to resume quarterly lease sales.
There was supposed to be a leasing sale in March and another in June. Cancellation of those two sales has already cost the state $86 million, North Dakota’s suit says. Production from leased federal and tribal lands meanwhile generates $93.65 million in royalties alone for the state annually.
“BLM does not have the discretionary authority to suspend regular lease sales in North Dakota without first complying with the notice and comment rule-making process laid out by statute,” Stenehjem wrote in the suit. “The Federal Land Policy and Management Act imposes detailed procedural requirements on any substantial change in land management policy.”
Those requirements include specific limits on the authority of the Secretary of the Interior to withdraw lands from leasing.
The moratorium on new oil and gas leases was implemented following an executive order issued by President Joe Biden, Stenehjem acknowledged. But that order also included the qualifier “to the extent consistent with applicable law.”
“There is nothing in the Federal Land Policy Management Act that would permit federal defendants to change their land management practices at the beginning of this administrative process rather than following its completion,” Stenehjem wrote.
The Mineral Leasing Act states that lease sales “shall” occur at least quarterly, and more often if deemed necessary, Stenehjem said.
“The illegality of these actions is compounded in North Dakota by the split estate framework and resulting checkerboard nature of federal oil and gas interests which acts as a force multiplier to also block the development of pooled state and private mineral interests,” the Attorney General added.
And that checkerboard nature means the moratorium has actually affected more private and state mineral interests than federal.
Gov. Doug Burgum praised Stenehjem’s decision to file the suit.
“Rather than working with states on forward-looking innovation and solutions for carbon management, this unlawful ban is a backward-looking, top-down regulation that threatens to further drive up the price at the pump and deny hundreds of millions of dollars in revenue to our schools, communities and state,” Burgum said. “North Dakota has a robust energy industry and some of the cleanest air and water in the nation because we have developed our resources responsibly with an all-of-the-above energy approach. This misguided ban hurts hardworking Americans, puts our energy security at risk and fails to solve the problem for the environment. It’s bad for the country, and we will continue to oppose it as we fully support the attorney general’s actions.”
Burgum, along with 16 other governors, have written to Biden urging him to with draw his executive order, Tackling the Climate Crisis at Home and Abroad, which directed federal agencies to pause new federal oil and gas leases to the extent allowed by law.
Lawmakers, meanwhile, have introduced various legislative measures that would prohibit the Secretary of the Interior from pausing leases without Congressional consent, as well as allow the Secretary of the Interior to delegate leasing powers to states.
Sens. John Hoeven and Kevin Cramer, in addition to supporting such legislation, have also both written letters pushing the Secretary of the Interior to lift the moratorium.
“Energy development on federal lands supports our country’s national and economic security, while also providing good-paying jobs and needed revenues for education, infrastructure, conservation and other priorities,” Sen. John Hoeven said. “That’s why this misguided moratorium on federal oil and gas leases is the wrong approach. By limiting public participation in this forum and making clearly inaccurate claims about federal leasing, Interior is choosing to ignore the millions of Americans who benefit from this energy development and undermining the legitimacy of this process.”
Sen. Cramer, meanwhile said that banning energy development federal lands runs counter to energy independence, in addition to hurting state and tribal governments.
“It increases federal and state budget shortfalls, hampers state and private mineral owners’ rights, and makes the United States less energy independent and more reliant on foreign producers who are not all good actors like Russia, Saudi Arabia, or Venezuela,” Cramer said. “I support Attorney General Stenehjem’s effort in court, applaud him for standing up for North Dakota, and stand ready to help in any way I can.”