American Oil and Gas Reporter - August 2015 - 127

ConventionSection: Petroleum Association of Wyoming
one location per lease, minimum lease
sizes, required unitization, and no surface
occupancy within 0.5 miles of big game
migration corridors.
Other aspects of the Bighorn Basin
RMP to which Wagner says PAW objects
include:
* Winter concentration areas that the
state neither reviewed nor approved;
* Unusually large buffers around cultural sites and trails, some as great as
three miles;
* Limiting development in a very
old oil and gas unit, which contradicts
the Wyoming executive order for conservation of sage grouse; and
* Timing stipulations on production
activities that occasionally even seek to
forbid maintenance and other normal operations.
The last item is intended to prevent
disturbance, she notes, but easily could
lead to serious unintended consequences.
"That is pretty crazy," she muses. "Companies always have been allowed to do
maintenance. They keep it to a minimum,
but it becomes a safety issue if they
cannot check their locations."
One of the major overriding flaws
Wagner raises about all the plans is the
extent to which they elude the rulemaking process. "Some of the items in
the final RMPs were not in the draft,"
she observes. "That means we had no
opportunity to comment, and that is a
big deal."

Sage Grouse Plan
Early examinations of the sage grouse
RMPs suggested their application might
prove smoother for Wyoming's oil and
gas industry than in other states (AOGR,
July 2015, pg. 167). Even so, Hinchey
muses, that is a relative assessment. "If
other states have it worse than us, I really
feel for them because I think we have it
pretty bad," he suggests.
Wagner explains that the RMP acknowledges Wyoming's sage grouse protection policies, which Governors Dave
Freudenthal and Matt Mead have codified
through executive orders. BLM's sage
grouse RMP generally follows the EO,
she says, but definitely veers away from
it in places.
And although PAW supports the EO,
Wagner emphasizes, its provisions are
the product of compromises. "We have
to 'give' in order to work under that, but
we have been working under it for years,"
she describes. "The portions of the RMP

that part ways from the EO are the portions
with which we have issues."
One of the most problematic departures
entails a net conservation gain standard
for projects in core sage grouse areas,
Wagner details, which essentially means
that an operator who disturbs acreage in
core area habitat must mitigate with additional acreage to offset the loss within
core habitat after completing operations.
"The EO requires a no net loss standard
in projects that take place in core area
habitat," she contrasts.
Another divergence Wagner cites is
mandatory compensatory mitigation for
development inside core areas. "In some
areas, it is not clear whether they are
going to require compensatory mitigation
for habitat that falls outside core areas as
well," she adds. "That runs hand-in-hand
with the net conservation gain standard."

More Discrepancies
There also are noise limitations both
in and outside core areas, as well as required unitization in core areas and required design features that Wagner says
will render many projects uneconomical.
"There also are timing restrictions that
are inconsistent with the EO, but they
are also inconsistent within the RMP, so
we are not sure if that is an error," she
mentions.
She goes on to note that the sage
grouse plan includes a Forest Service
portion that adds more stipulations. "The
Forest Service adds new priority habitat
management areas, which is how the nine
sage grouse RMPs refer to core areas,"
Wagner details. "It also prohibits activities
in sagebrush habitat that last longer than
five years."

Another inconsistency she cites is language in the RMP that indicates leasing
and development in areas outside sage
grouse habitat will receive permitting
priority over development in habitat. She
also notes the RMP creates a new monitoring framework. "It is interesting that
the agencies actually acknowledge they
lack the resources to carry that out,"
Wagner adds.
The PAW team noticed one significant
provision near the end of its examination
process, she reports. The plan contains
some core area stipulation exemptions
for certain renewable transmission projects,
Wagner observes. The upshot, she says,
is that those projects need not go through
the greater sage grouse screening process
criteria. They are not subject to the
required design features, the buffers, tall
structure requirements, nor the disturbance
requirements in core areas.
"It was sort of buried in the plan," she
describes. "The reasoning it provided
was that the Obama administration had
identified them as high-priority projects,
although the plan offered no supporting
data or analysis."
Hinchey says PAW mentioned that
bias in its protests. "I am not sure how
one industry can be exempted and that
BLM will remove it in its final approved
plan," he expresses. "Absent that, there
may be a day in court in which we can
visit about some of those things."
According to Wagner, BLM's proposed
timeline is to release the records of
decision in August. "It wants to have
those out prior to the greater sage grouse
(endangered species) listing decision in
September," she reports.
❒

Overregulation Poses Threat
To Variety Of Industry Projects
CASPER, WY.-Less than a decade
ago, reflects Petroleum Association of
Wyoming Chairman Randy Harris, conventional wisdom suggested U.S. crude
oil production faced inexorable decline.
Then the tight-oil revolution reversed
that nose dive.
"It is amazing," he marvels. "Developing our country's natural resources has
us on the doorstep of energy independence."
Almost equally mind-boggling-though

not in a positive sense-are government
efforts that undermine that endeavor, especially in a challenging price environment, suggests Harris, who is director of
corporate development at Black Hills
Corp in Denver. "That is why it is frustrating to encounter so many difficulties
with access to federal lands and a lot of
regulatory initiatives," he muses. "That
is not a very good approach because
rising energy costs really affect our country's standard of living."
AUGUST 2015 127

American Oil and Gas Reporter - August 2015

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