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Published April 09, 2010, 10:16 AM

Oil and gas leases put on hold in Montana, Dakotas

BILLINGS, Mont. — Plans to sell 91,000 acres of oil and gas leases in Montana, North Dakota and South Dakota were put on hold Thursday until federal land managers study how oilfield activities contribute to climate change.

By: Matthew Brown, Associated Press

BILLINGS, Mont. — Plans to sell 91,000 acres of oil and gas leases in Montana, North Dakota and South Dakota were put on hold Thursday until federal land managers study how oilfield activities contribute to climate change.

Lease sales scheduled for June and August also are likely to be postponed.

With oil production booming in the three Northern Plains states, the postponements mark a setback for an industry scrambling to stave off tighter regulations proposed by the Obama administration.

Bureau of Land Management spokesman Greg Albright says a new environmental review of the affected parcels could be done by late September.

The relatively quick turnaround was welcomed by the industry as a bit of silver lining to Thursday’s news.

At issue are greenhouse gases emitted by oil company trucks and equipment and industry practices such as flaring methane directly into the atmosphere.

Oil and gas operations account for about 23 percent of annual U.S. methane emissions and 2 percent of total greenhouse gas emissions, according to the Environmental Protection Agency.

The lease sale postponement came just weeks after the BLM suspended activity on 38,000 acres of leases that had already been sold. That came as part of a settlement between the agency and environmental groups that filed a lawsuit in U.S. District Court following the 2008 sale of the parcels.

A protest against the planned April sale had been filed by the same groups — the Montana Environmental Information Center, Earthworks Oil & Gas Accountability Project, and WildEarth Guardians.

Albright said BLM is still figuring out how it will conduct its greenhouse gas study.

The first step likely will be to quantify potential emissions from drilling, which the agency can compare with other emission sources such as power plants and vehicles, Albright said.

“You have to have a measuring stick and then look and see what kind of options might be available to reduce those greenhouse gasses,” Albright said.

BLM officials have said their analysis would be complicated by the scattered locations of the leases, which are spread across large parts of Montana, western North Dakota and northwestern South Dakota.

An attorney for the groups behind the lawsuit and sale protest said the BLM needed to take a broad look at ways to change oil industry practices and reduce emissions.

Erik Schlenker-Goodrich with the Western Environmental Law Center said oil and gas companies currently allow too much waste and use inefficient technologies that could easily be updated.

“We want them to address climate change. The idea is not to shut the process down,” he said.

A second lawsuit challenging 70,000 acres of federal lands leased in New Mexico remains pending.

Industry representatives contend emissions from oil and gas fields are necessary to develop a valuable domestic resource. They argue natural gas still comes in ahead of dirtier fuels like coal in terms of climate change contributions.

An oil and gas industry group had intervened in the Montana lawsuit in a bid to keep the 2008 leases active for drilling.

Kathleen Sgamma with the Independent Petroleum Association of Mountain States said Thursday it was unfortunate the upcoming sales were postponed. She said the BLM needs to come up with a long-term solution so the issue doesn’t hang over the industry indefinitely.

But Sgamma said she was “very encouraged” by the BLM’s pledge to complete its initial analysis by late September.

“That is a very reasonable timeframe,” she said.

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