Hundreds of parcels of land in a massive 2022 Wyoming oil and gas lease sale are in limbo after a U.S. district court ruled last month that the Bureau of Land Management did not fully consider impacts from oil and gas operations on water quality and declining species populations and failed to demonstrate how it factored future greenhouse gas emissions into its decision to hold an auction.

In a separate but concurrent ruling issued by the U.S. District Court for the District of Columbia, Judge Christopher Cooper agreed with the agency’s approach to analyzing the impacts of greenhouse gas emissions from a broader set of lease auctions across the American West, and found that it was not possible for the agency to judge whether the emissions generated by oil and gas leases would have a “significant” impact on the environment. 

While conservationists see the first case as a success, the oil and gas industry views the latter ruling as a “major win for onshore drilling.”

In Wilderness Society v. U.S. Department of the Interior, a narrower suit focused solely on 122 parcels covering almost 120,000 acres of land across Wyoming, the court sided with the environmental groups. In its judgment, it agreed that the agency had failed to “take a hard look at the environmental impacts” of the sale and explain how those factors influenced its decision. 

Environmental groups hope this ruling could prompt the court to pause or withdraw some of some of the leases.

In Dakota Resource Council v. U.S. Department of the Interior, environmental groups across the West sued the Bureau of Land Management (BLM) for conducting a “deficient” environmental analysis that did not consider the effects of fossil fuel emissions released by drilling on Western public lands. The court found that the BLM made “no legal error in [its] environmental analysis or its decision to approve” the sales. “Absent a government carbon budget or similar reference standard,” the agency could not reasonably determine if emissions from the leases would qualify as “significant.” 

That ruling was a “significant victory,” said the Western Energy Alliance, an oil and gas industry trade group, in a statement released after the court’s decision.

A Win in Wyoming

“We really think this should be a wakeup call for the BLM,” said Alexandra Schluntz, a senior associate attorney for Earthjustice who represented the Wilderness Society, a conservation organization, and Friends of The Earth, an environmental lobbying organization, in Wilderness Society v. U.S. Department of the Interior. 

“This case shows that the BLM has a lot of work to do to improve its process for leasing lands to oil and gas development, and improve how it’s analyzing and protecting the environment while it’s making those decisions,” she said.

Both organizations were concerned that the magnitude of the Wyoming sale, which offered over 40 times the area of the next largest auction in the West, would pollute nearby aquifers and sources of drinking water, upset critical habitats for mule deer and sage grouse—two of the state’s most iconic imperiled species—and exacerbate the volume of greenhouse gases Wyoming emits into the atmosphere. 

“The adverse impacts from that sale to conservation values on the ground, and the estimated emissions and their associated costs, particularly to public land resources, were significant enough that we wanted to challenge the decision making and the legality of that sale,” said Ben Tettlebaum, director and senior attorney of the Wilderness Society.

To argue their points, the environmental groups pointed to a series of gaps they believed existed between the BLM’s environmental assessment and contemporary studies and data that showed unconsidered negative impacts from oil and gas development on water quality and wildlife.

For the most part, the court agreed. The environmental organizations had “raised credible concerns” with the BLM’s methods for assessing fracking well casings, including the agency’s decision to ignore evidence from a 2022 study that found “significant gaps in casing” in Wyoming wells near aquifers. The court found the BLM should have considered the study during its planning process, which it said suggested that the agency’s current approach to regulating the industry may not thoroughly protect aquifers from contamination.

When it came to analyzing the effects of increasing oil and gas development in sage grouse and mule deer habitats, the agency’s assessments “do not offer any insight into how a lease sale of this magnitude and in these particular areas will likely affect these species,” the court found.

“Wide open spaces are absolutely critical for mule deer to exist and be able to thrive on the landscape. Any sort of fragmentation to habitat certainly poses a risk.”

Sage grouse are “under increasing threat due to rampant oil and gas development” in Wyoming,  according to the court. A 2022 U.S. Geological Survey study found sage grouse numbers across the West had plummeted 80 percent since 1956. As a result, the BLM had to do more than rely on a 2015 management plan that “may now be outdated” when evaluating how new development would impact the species.

Though the agency’s analysis for mule deer and other big game used more recent data, the BLM still failed to “reasonably forecast” the effects of more oil and gas development on the species. 

“What’s good for the bird is good for the herd,” said Josh Coursey, co-founder and president of the Muley Fanatic Foundation, a nonprofit focused on conserving Wyoming’s mule deer herds. Like sage grouse, “wide open spaces are absolutely critical for mule deer to exist and be able to thrive on the landscape,” Coursey said. “Any sort of fragmentation to habitat certainly poses a risk.”

Coursey was struck by the court’s findings that the BLM’s assessment of mule deer resilience was based on “assumptions that may no longer ring true.”

“The tool in the toolbox needs to be the latest information and the latest science available and the flexibility to implement them,” he said.

The Scope of Emissions

Conservationists in both cases asked the court to revisit the BLM’s decision-making regarding emissions from leases up for auction. In the Dakota case, the court took no issue with the agency’s approach to measuring emissions from its sale across Western states, as the BLM was “operating at the frontiers of science” and “reasonably exhausted available tools to analyze the lease sales’ environmental consequences.”

The oil and gas industry seized on the ruling in a statement by Western Energy alliance shortly after the ruling was announced, calling it “illogical” to ask the BLM to create a threshold for a significant level of emissions.

But in Wyoming, “The thing that [the BLM] has not really done is factor emissions and climate impacts on public land into the actual decision making on these parcels,” Tettlebaum said. The court agreed.

As part of its environmental assessment, the BLM calculated the “social cost of carbon” from the Wyoming leases, a figure which monetizes estimated damages from increasing greenhouse gas emissions. It noted that granting the leases could release about 25.6 million metric tons of emissions over the next 25 years and cause $838 million to $9.7 billion in damages.  

“The [BLM] did not adequately explain how it considered the environmental effects of [greenhouse gas] emissions that, in its own telling, carry a hefty price tag in terms of social cost,” the court found.

The court deferred to the BLM to decide whether the local economic benefits and dispatchability that come with oil and gas outweigh their “marginal contribution to global climate change,” but it nevertheless asked the BLM to “do more” to explain how its emissions analysis influenced its decision regarding the Wyoming leases. 

How the BLM balances resource extraction versus conservation has been the subject of a heated debate in Wyoming. Under the Biden administration, the BLM “has made some really great strides” balancing conservation and industry development, Tettlebaum said. This ruling is another reminder for the agency that “there’s still more that needs to happen,” he continued, adding “we think the BLM recognizes that.”

In the wake of the court’s decision, the environmental groups and the BLM will enter remedy proceedings, during which each party will present their case for how the agency should handle the 122 leases offered in Wyoming’s June 2022 auction. 

Tettlebaum would not comment on the Wilderness Society’s goals for this next phase, but said “we still think, especially in light of this decision, certain leases should not have been issued.”

Each party has until April 12 to propose a remedy schedule.