State Sues Interior Over Cancelled Leases
Friday, January 6, 2023

The State of North Dakota filed a lawsuit this week against the US Department of Interior and the Bureau of Land Management over the cancellation of seven quarterly federal oil and gas lease sales in the state the past two years.

The state is seeking an injunction prohibiting BLM from cancelling, and requiring BLM to conduct, quarterly lease sales in accordance with the Federal Land Policy and Management Act (FLPMA) and the North Dakota Resource Management Plan. The lawsuit notes there are 875 pending nominated tracts in North Dakota for which developers have expressed an interest, and of those, 177 tracts have completed the administrative evaluation process and are ready to be scheduled for sale.

The state previously filed suit challenging BLM's cancellation of lease sales in the first and second quarter of 2021. In that case, the court denied without prejudice North Dakota's request, noting that the federal agencies gave “assurances at the hearing the process to start federal oil and gas leasing sales in North Dakota was imminent” but that if BLM did not hold to its word and cancelled any planned future sale, North Dakota could bring another action for review.

The suit points out that neither the Interior Department or BLM have offered for public comment or scrutiny any explanation or analysis of the decision to impose a moratorium on oil and gas lease sales. The state argues that any decision to delay oil and gas leasing to conduct environmental studies constitutes a “withdrawal” under the FLPMA and is subject to its procedural requirements with which BLM has not complied.

North Dakota has calculated that the failure to conduct lease sales will result in delaying the development of 26,690 federal, 4,580 state, and 21,880 private mineral acres, potentially costing the state $1.08 billion in revenue or $9.0 million per month for every month development is delayed. The suit states that 30%  of the revenue is earmarked for education, 10% for natural resource (water) projects, 10% for Health and Human Services, 7% to counties and 7% to cities, 5% to statewide infrastructure, and 30% to the Legacy Fund.

Click here to read or download the lawsuit.

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