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A Continued Push for Reform Is Needed on Public Lands’ Energy Leasing

A Continued Push for Reform Is Needed on Public Lands’ Energy Leasing

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The new secretary of the interior can do a great deal to ensure that fossil-fuel development on federal lands is done in ways and with limits that better protect health, safety, and the environment.
The new secretary of the interior can do a great deal to ensure that fossil-fuel development on federal lands is done in ways and with limits that better protect health, safety, and the environment.

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Published by: Center for American Progress on May 13, 2013
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1Center or American Progress | A Continued Push or Reorm Is Needed on Public Lands’ Energy Leasing Title
A Continued Push for Reform Is Neededon Public Lands’ Energy Leasing
 Tom Kenworthy May 13, 2013
Presidens and heir secrearies o he inerior have considerable laiude in how hey handle resource developmen. Te secreary o he inerior oversees he agencys Bureauo Land Managemen, which manages oil, gas and coal developmen on ederal lands. Asormer secreary Ken Salazar noed in his nal public web cha beore leaving oce lasmonh, presidenial adminisraions can ake quie dieren approaches.Under Presiden George W. Bush’s adminisraion, ormer Secreary Salazar said ha,“Tere was an agenda on oil and gas ha basically allowed oil and gas o be developedanywhere no mater wha he environmenal consequences were.” Under PresidenObama, he said:
We have brought a balanced approach. … Tere are places that have special ecologiesand environmental values and history that we need to protect. Tat’s the approachwe’ve taken, it is the approach we’ve embedded in our rules and regulations and our  planning eorts here at Interior.
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 As imporan as he changes oulined by ormer Secreary Salazar are, hey remain a work in progress. A repor on he Obama adminisraion’s reorms prepared by Te Wilderness Sociey concluded ha, “[W]hile imporan progress has been made underhe reorms, addiional work is required o make he reorms successul and o providea lasing ‘x’ o he onshore oil and gas leasing and developmen program.
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Tis issue brie akes a look a ossil-uel developmen on public lands and explores opions orhow he new secreary o he inerior can oversee his exploraion in ways ha ensurepublic healh and saey and limi environmenal damage.
 
2Center or American Progress | A Continued Push or Reorm Is Needed on Public Lands’ Energy Leasing Title
The Mineral Leasing Act o 1920, as amended, governs the leasing o oil,natural gas, and coal on ederal lands, excluding national parks, nationalmonuments, and congressionally created wilderness areas.
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The law isadministered by the Department o the Interior’s Bureau o Land Manage-ment, or BLM, which oversees leasing on the 258 million acres it manages;on the 385 million acres managed by other ederal agencies, such as theU.S. Forest Service; and on 57 million acres o land where the surace is pri-vately owned but the mineral rights are owned by the ederal government.For the lands it directly controls, the BLM, under the 1976 Federal LandManagement and Policy Act, must prepare resource-management plansto govern land uses, including which areas are suitable or leasing.
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Thismanagement is generally or large areas o land, and or periods o 10 to 15years. According to the law, the BLM must apply the principle o multipleuse, which means utilization “in the combination that will best meet thepresent and uture needs o the American people.” It also requires theagency to take into account:
… the long-term needs o uture generations or renewable and nonre-newable resources, including, but not limited to, recreation, range, tim-ber, minerals, watershed, wildlie and fsh, and natural scenic, scientifc and historical values; and harmonious and coordinated management o the various resources without permanent impairment o the productiv-ity o the land and the quality o the environment with considerationbeing given to the relative values o the resources and not necessarily tothe combination o uses that will give the greatest economic return or the greatest unit output.
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For its part, the U.S. Forest Service develops its own land-managementplans under the same general principles.Most oil and gas leasing is done through a competitive process. The BLMidenties areas available or leasing, and energy companies then nominateland parcels within those areas, generally no more than 2,560 acres, orquarterly auctions. Minimum bids o $2 an acre are required. Leases requirethe payment o at least 12.5 percent o the value o oil or gas that is pro-duced. There are also annual rental ees, starting at $1.50 an acre or the rst5 years o the 10-year lease, increasing by $2 an acre every year thereater.Hal o the unds rom royalties and ees go to the U.S. Treasury and hal tothe state where the minerals are located, except in Alaska, where the stategets 90 percent.
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Owners o oil and gas leases must submit an application or a permit todrill or each well and cannot begin operations until the permit is approvedby the BLM. The application must include a drilling plan and a surace-useplan showing locations o drilling pads and how the area will be reclaimed.The BLM must allow public inspection o those applications and prepare anenvironmental review. The Forest Service has similar requirements.The BLM also administers coal leasing on ederal lands, under the MineralLeasing Act as amended—primarily by the 1976 Federal Coal LeasingAmendments Act—and through its own land-use planning. Leasing takesplace under two procedures established by regulation: regional coal leas-ing, where the BLM selects tracts to meet regional requirements deter-mined by teams o BLM ocials and state and local ocials, and throughso-called leasing by application, which means energy companies apply orspecic areas. Leases initially are in efect or 20 years, but can be automati-cally extended as long as coal is being produced in commercial amounts.No one company may own leases o more than 75,000 acres in a state or150,000 acres nationally.
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By 1990 the BLM had all but abandoned the regional coal-leasing program,and today virtually all coal leases are done through leasing by application.As a 2012 study by the Institute or Energy Economics & Financial Analysisnoted, “By 1990, BLM’s regional coal teams had successully lobbied todisband, or decertiy, all 12 coal production regions,” and this “gave coalcompanies nearly complete control o coal mining,” most notably in thePowder River Basin, the source o most ederal coal.
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Fossil-Fuel Leasing on Federal Lands: A Primer
 
3Center or American Progress | A Continued Push or Reorm Is Needed on Public Lands’ Energy Leasing Title
 The Obama administration’s oil- and gas-drilling reform efforts
Bringing undamenal change o he way ha he Inerior Deparmen’s Bureau o Land Managemen, or BLM, manages energy developmen was never going o be aneasy ask. Te bureau oversees mineral resources on 700 million acres o public landsand on privae lands where he ederal governmen owns he mineral righs. Bu insome ways and in some places i sill has a culural bias in avor o resource exrac-ion. As a resul, some BLM leaders in he Wes have been less han enhusiasic abouhe Obama adminisraion’s reorm agenda, making implemenaion o he changesuneven and slower han i should be. Anoher par o he Deparmen o he Inerior’s energy porolio is coal producion, wihhe grea bulk o i coming rom ederal lands in he Powder River Basin region o Wyomingand Monana. Here oo, he Obama adminisraion has a long way o go in ensuring hahe program is consisen wih is saed climae change goals and ha i is operaing in hepublic ineres by providing a air dollar reurn o he reasury Deparmen. Wihou a doub, Secreary Salazar quickly se a dieren and rereshing one when heook charge o he Inerior Deparmen in 2009. Saying ha here was a “new sheri inown”
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who would no longer le he oil and gas indusry rea public lands as is privae“candy sore,”
10
Secreary Salazar slammed he brakes on oil- and gas-lease sales on 77racs o land in Uah, one o he Bush adminisraions mos conroversial sales. Many o hese racs were close o naional parks and oher reasured lands.
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 Aer scutling hose sales, he Inerior Deparmen underook a ormal inernal review o BLM’s leasing program, which led o he reorms ha were unveiled in May 2010.
12
 Tose reorms called or a beter balance beween developing oil and gas resources andhe proecion o oher public lands resources, including nearby parks and reuges, wild-lie, and hisoric and archaeological sies. “Tere is no presumed preerence or oil andgas developmen over oher uses,” saes he reorm documen.
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 A key elemen o he reorms was ensuring ha BLM would assume more responsibiliy or ideniying parcels o land suiable or oil and gas developmen raher han cedingha imporan ask o indusry. As a resul, a new procedure was developed or morecomprehensive planning in some areas where large-scale leasing could be expeced buhas no ye aken place and where confics wih oher resources such as recreaion or waer supplies are likely. Tis process enables BLM o review large landscapes in ordero ideniy areas suiable or oil and gas developmen and areas where oher uses such asrecreaion and proecing wildlie habia should ake precedence.Tis new process is similar o he broader, landscape-level approach used by he IneriorDeparmen in planning or large-scale developmen o solar energy in he deserSouhwes. I oers he promise o ar more cohesive land-use planning driven by science,

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