Free Markets, Free People

Nancy Freudenthal


Obama administration drilling rules scrapped by federal judge

A federal judge has scrapped the Obama Administration’s rules for drilling. The new rule required oil and gas producers to do additional environmental studies for each new site (or if increased drilling was to be done at an existing site) even though such studies had been completed on the entire tract previously.  Under the Bush-era ‘categorical exclusion’ rule, the existing studies and approval for the entire tract were sufficient and subsequent studies for new drilling on that tract were waived.  

The Energy Policy Act of 2005 allows the BLM and Forest Service to invoke categorical exclusions and skip new environmental review for drilling permits under certain circumstances.

The circumstances include instances where companies plan to disturb relatively little ground and environmental review already has been done for that area. A categorical exclusion also can be invoked when additional drilling is planned at a well pad where drilling has occurred within the previous five years.

The Obama administration had issued new rules which revoked categorical exclusions (used extensively in the Western US until last year) and required new environmental studies for each new planned drilling or expansion of drilling, slowing the process to a crawl.

The plaintiff, Denver-based Western Energy Alliance, argued that the new rule had created delays that thereby added cost and materially hurt (and thereby created “recognizable injury”).  The administration rejected the argument saying it was “speculative.  However, the federal judge, U.S. District Judge Nancy Freudenthal , did not:

"Western Energy has demonstrated through its members recognizable injury," she said. "Those injuries are supported by the administrative record."

This, of course, is good news for the oil and gas industry, good news for job hungry Americans and, ironically, a ruling the “focused on jobs like a laser” administration is sure to appeal.

~McQ

Twitter: @McQandO

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