North Dakota has filed a federal lawsuit against the Biden administration over the Department of Interior’s (DOI) January nationwide suspension of oil and gas lease sales on federal lands.
North Dakota claims the suspensions are unlawful and will cost the state billions. North Dakota says by cancelling scheduled lease sales in March and June, the federal government cost the state $80 million in revenues.
This lawsuit is about forcing the federal government to follow the law and protecting jobs in North Dakota, said the state’s Attorney General Wayne Stenehjem, in a statement issued about July 7 lawsuit.
“Without following the legally required procedures, BLM arbitrarily canceled the March and June lease auctions,” says Stenehjem’s statement. “I have taken this action to protect North Dakota’s economy, the jobs of our hard-working citizens, and North Dakota’s rights to control its own natural resources.”
North Dakota is asking the court to force the U.S. Bureau of Land Management (BLM) to reschedule the lost lease sales and prevent it from blocking future leases in the state.
‘A Foolish Idea’
The Biden administration’s leasing moratorium is an attack on American energy independence, said Sen. Kevin Cramer (R-ND) in a statement his office issued on July 8, praising the state’s lawsuit.
“In addition to being a foolish idea, President Biden’s moratorium on oil and gas leasing on public lands is illegal,” said Cramer. “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.”
Court Overturns Ban
Members of Collegians For a Constructive Tomorrow participated in a DOI forum on the lease suspensions in March and authored a letter opposing the ban, which they said would likely hurt national parks and other federal lands, because receive substantial funding from the royalties from drilling leases.
In a separate lawsuit filed by the state of Louisiana, federal judge Terry Doughty of the U.S. District Court for the Western District of Louisiana ruled Biden’s leasing moratorium was illegal and placed a nationwide stay on it on June 15, Dan Kish, a senior fellow at the Institute for Energy Research, points out.
“The law is clear that the Department of Interior shall hold lease sales quarterly, which the moratorium on leasing breaches,” said Kish. “This is the reason a federal judge ruled against the Biden Administration on a similar case involving Louisiana.”
After the ruling, the DOI said it would “comply with the decision” of the District Court, indicating lease sales would resume soon in some areas.
Different Administration’s Act Differently
There is disparity between how policies promulgated under Democrat and Republican administrations are treated by career bureaucrats within the agencies themselves, says Bette Grande, president of the Roughrider Policy Center.
“North Dakota finds itself in territory familiar from the Obama era, when the Courts were the only roadblock to progressive and aggressive overreach by federal agencies,” said Grande. “It reveals the double standard of American politics.
“Efforts by the Trump administration to roll back overreach by federal agencies were blocked at every turn by procedural hurdles, public comment requirements, etc.,” said Grande. “However, the Biden Admin ignores those same procedural requirements, acting by executive fiat, with the lesson seeming to be when it comes to federal regulations, actions by progressive environmentalists are permanent while actions by Republican administrations are not even speed bumps.”
Bans Hurt State Economies
In addition to being unlawful, Biden’s leasing moratorium is likely to wreak havoc on fragile state economies, says Kish.
“North Dakota estimates it has already lost $80 million in revenue, and that will only be compounded by further federal law-breaking,” said Kish. “Ultimately, stopping leasing on 2.46 billion acres of federal mineral estate on-and offshore will make energy scarcer and more expensive.
“It will cost untold numbers of good jobs, rob state treasuries of monies for schools and roads, and simply lead to more energy imports and dependency on others, ultimately weakening America,” Kish said.
Biden’s ban could affect more than just federal lands, says Grande.
“North Dakota has relatively little federally controlled land compared to our Western neighbors, but BLM’s action could still have devastating impacts on our oil & gas industry, our economy as a whole and our citizens”, said Grande. “A significant percentage of mineral interests in North Dakota are owned as a ‘split estate’ meaning the owner of the minerals does not also own the surface interest in the property.
“When farmland was foreclosed across the state in the 1930s and 1940s, the federal government assumed ownership of a patchwork of property in every county, which when the government later sold those properties it retained generally 50 percent of the mineral interests,” Grande said. “So, the federal government owns mineral interests throughout the Bakken.”
It’s unclear what this means for private owners of split estates, says Grande.
“The key question is whether the federal leasing moratorium will hold up the drilling activity on split estates,” said Grande. “When a fracking ban on federal land was being discussed during the Obama administration, it floated the idea that if there was any federal ownership within an allowed oil and gas spacing unit there could be no fracking over the entire unit.
“These actions by the federal government could prohibit private mineral owners from prudently developing their resource,” Grande said. “Such a policy can only be called an uncompensated ‘taking’ prohibited by the Fifth Amendment to the United States Constitution.”
Kevin Stone (kevin.s.stone@gmail.com) writes from Arlington, Texas.