Leasing Lawsuits Hit Their Stride Multiple Plaintiffs Seek Orders to Reinstate Federal Oil and Gas Lease Sales

Consistently throughout his presidential campaign, President Biden repeatedly indicated his intention to “ban[] new oil and gas permitting on public lands and waters.”[1] Only one week after taking office, on Jan. 27,  the president issued Executive Order 14008, representing the administration’s first major step toward that goal. Among other provisions, the Executive Order directs the Secretary of the Interior to “pause new oil and natural gas leases on public lands or in offshore waters.”[2] The president did not offer any time limit for this “pause,” providing only that new lease sales are to be suspended “pending the completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices.”[3] Leadership at the Department of the Interior has subsequently confirmed that the administration has set no deadline for completing the review Executive Order 14008 requires.[4]

Consistent with Executive Order 14008’s directive, the Bureau of Land Management has since cancelled all oil and gas lease sales that were scheduled to be conducted in the first two quarters of 2021. Not surprisingly, challenges to these cancellations materialized almost immediately. On the same day the pause was announced, industry groups Western Energy Alliance and the Petroleum Association of Wyoming filed suit in Wyoming federal district court.[5] Eight weeks later, on March 24, 2021, numerous states filed two more lawsuits: (i) the State of Wyoming filed a challenge to the cancellation of onshore lease sales in the District of Wyoming;[6] and (ii) a coalition of 14 states filed a challenge to the cancellation of both onshore and offshore lease sales in the Western District of Louisiana.[7] Among other contentions, each suit alleges that the cancellation of oil and gas lease sales violates a statutory mandate in the Mineral Leasing Act providing that “[l[ease sales shall be held for each State where eligible lands are available at least quarterly.”[8] Continue Reading

The Importance of Knowing The Right Way to Prepare Legal Descriptions in a Right-of-Way Transaction in Texas

Under Texas law, a blanket easement is “[a]n easement without a metes and bounds description of its location on the property.”[1] It is also considered an easement that covers the entire servient estate.[2] Although some states require that the easement area be smaller than the entire servient estate, Texas does not.[3] For that reason, blanket easements are used in Texas because they grant the easement holder the ability to modify the location of pipelines on the property, and as a result, provide more flexibility to the easement holder in choosing the manner in which it may exploit or transport resources.[4]

Blanket easements can be problematic for the landowner of the burdened property because if he or she has improvements on or other uses for the burdened property, those improvements or other uses of the landowner will likely be subject to the rights held by the holder of the right-of-way. To avoid this issue, landowners would be wise to define a fixed easement area and have the company survey it, along with any temporary work spaces or construction areas. This type of easement, which is more commonly used today, is known as a specific easement. Continue Reading

Understanding Missouri v. Biden: The Benefits and Costs of Carbon Emissions

On Feb. 26, the Biden administration announced that, for at least the rest of the year, federal agencies will conduct regulatory and environmental analyses assuming that the global “social cost” of emitting carbon dioxide is $51 per ton. Called the “Social Cost of Carbon” for short, this calculation will be directed primarily toward agriculture and fossil fuels. The announcement creates the climate policy conundrum of 2021.

The announcement’s technical paper explains the assumptions and uncertainties. It also makes clear the $51 value does not consider the social benefit of consuming oil and gas. With similar assumptions and uncertainties, and just for the sake of illustration, a highly simplified value of that benefit can be calculated in dollars per ton. The global “social benefit of carbon” is $5 million per ton. (See below.)

This calculation is the author’s, not that of the states suing President Biden. But the illustration shows that ignoring benefits when quantifying costs might skew decision-making. The failure of the social cost of carbon to consider the benefits is what lies at the heart of the states’ suit. Missouri v. Biden, No. 4:21-cv-00287-SPM (E.D. Mo. filed March 8, 2021). The states claim that, by design, the social cost of carbon skews the analysis to justify increased federal authority over areas of regulation traditionally left to the states. Continue Reading