Interior Board of Land Appeals
The following are some notable recent decisions by the Interior Board of Land Appeals relating to oil and gas leasing and public lands:
Appeals: The regulations, 43 CFR 4.411(a), require a notice of appeal to the Board both to be filed in the office that made the decision being appealed, and to be filed within 30 days (subject to a 10-day grace period under certain circumstances) from when the decision was served on the appellant. Where a notice of appeal that would otherwise be timely was filed in a BLM field or district office, rather than in the BLM State office that issued the decision, the Board does not have jurisdiction to consider the appeal. New Mexico Wilderness Alliance, et al., 195 IBLA 242 (2020).
Surveys; choice of law: Federal title to a tract of public domain lands bordering on a navigable river extends to the ordinary high water mark of the river. Where (a) it becomes necessary, following changes in the course of the river, to identify an ordinary high water mark that differs from the ordinary high water mark shown on the official survey (specifically, the ordinary high water mark that existed at the time the river was dammed, which then became the fixed boundary of the federal tracts that were inundated), and (b) federal law and State law establish different criteria for identifying the ordinary high water mark, the ordinary high water mark at the relevant time is to be determined by federal law. As a choice-of-law matter, the federal law that is applicable in this situation is express federal law, and not State law that might instead be borrowed as federal law. North Dakota Office of the State Engineer & North Dakota Board of University & School Lands, 195 IBLA 194 (2020).
Standing: A decision granting a lease extension (in the context of an oil shale research, development, and demonstration lease) may adversely affect a party opposing that decision, and thus give that party standing to appeal. Such a decision is an irreversible and irretrievable commitment of resources, similar to a decision issuing a lease in the first place, and unlike a decision granting a suspension of a lease that merely maintains the status quo. Southern Utah Wilderness Alliance, et al., 195 IBLA 164 (2020).
State Director review: A BLM letter with regard to royalty accounting, which merely requires an operator to contact the BLM office to “resolve” accounting discrepancies, does not take an action adversely affecting the operator, and thus is not a decision that would be subject to State Director review under 43 CFR 3165.3(b). Bruin E&P Operating, LLC; Petro-Hunt, LLC, 195 IBLA 101 (2020).
Protests; surveys: To be timely, a protest must be filed with BLM before BLM has taken the action that is being objected to. However, BLM may, in its discretion, consider a protest that is filed untimely. If BLM chooses to consider an untimely protest of a survey, the protest will be denied on the merits unless it establishes, by a preponderance of the evidence, that the survey was grossly erroneous or fraudulent. Rudolph Hillstrom, 194 IBLA 355 (2019).
Void vs. voidable leases: The Board’s ruling in Southern Utah Wilderness Alliance, et al., 194 IBLA 333 (2019), is important as an affirmation that, where an environmental analysis which led to the offering of lands for competitive leasing is legally deficient, the resulting leases are not necessarily void, but may merely be voidable. The distinction drawn by the Board is between a lease that was “improperly issued” and is subject to cancellation, and a lease that could be issued properly but had a “procedural flaw” occur during the leasing process: “[W]hen the land is otherwise available for mineral leasing, and the lease ‘has been issued in violation of established procedures,’ the ‘lease is considered voidable rather than void.’” 194 IBLA at 336-337, citing Clayton W. Williams, Jr., 103 IBLA 192 (1988). The deficiency in such a situation may be cured by suspending the leases pending the conduct of a proper environmental analysis, and then either lifting the suspension or cancelling the leases depending on the outcome of that analysis.
Environmental review: The case of Owyhee County Board of Commissioners, 194 IBLA 316 (2019), while it does not involve oil and gas, still may have implications for federal oil and gas leasing. In that case, a State request to place a memorial marker in a wilderness area was approved by BLM following an environmental review; but in fact the State already had placed the marker before completion of BLM’s review process and the ensuing 30-day comment period. The County, zealously seeking to defend the wilderness area, challenged BLM’s action. The Board, while stopping short of directing the removal of the marker, set aside BLM’s decision and remanded the matter to BLM. The Board found that the environmental assessment and decision violated the requirements of the National Environmental Policy Act because they were erroneously premised on approving an action that already had been taken; that the deficiency could not be cured by completion of the EA after the fact; and that the violation of NEPA did not constitute harmless error. Although somewhat fact-specific, this decision may add fuel to the fire of efforts to challenge oil and gas leases based on assertions of long-ago technical deficiencies in the NEPA review process that preceded lease issuance. (But see the Southern Utah Wilderness Alliance decision above.)