Feds Abused Discretion in Failing to Schedule Wyoming Energy Lease Sales

CHEYENNE, Wyo. — A federal judge handed a partial victory to the state of Wyoming on New Year’s Eve, concluding that federal officials abused their discretion by failing to schedule oil and gas lease sales there in the latter part of 2022.

Though Wyoming Gov. Mark Gordon lauded the ruling as a figurative green flag to President-elect Donald Trump’s plan to expand fossil fuel production in the U.S., he was also forced to concede the state had achieved only a partial victory.

That’s because U.S. District Judge Scott Skavdahl also held that the agency lawfully exercised its discretion by not holding lease sales on two earlier occasions in 2021.

The Mineral Leasing Act of 1920 grants the secretary of the Interior the authority to lease parcels of federal land for the development of natural resources.

Generally this authority is carried out through a competitive bidding process known as a “lease sale.”

How quickly this process occurs and on what schedule, however, depends largely on a given presidential administration’s vision of the nation’s energy future.

In the case of the Biden administration the emphasis has been on moving the U.S. away from fossil fuels and toward cleaner energy sources like wind and solar and hydrogen in a significant way by 2035.

In its lawsuit, the state of Wyoming claimed the Interior Secretary Debra Haaland acted in an arbitrary and capricious manner by failing to hold any oil and gas lease sales anywhere in the U.S. during the second and third quarters of 2021, or the third and fourth quarters of 2022.

But Skavdahl found there was a marked distinction between the two years.

In the case of the claims involving 2021, Skavdahl held that both the department and the administrative record had shown the scheduling of lease sales had been complicated by litigation that had drawn into question whether certain previously identified lands were in fact “available” to lease.

Because a comprehensive review of the leasing regime was underway at the time, Skavdahl concluded the department did not act unlawfully by not holding sales.

But when it came to 2022, Skavdahl said there was a “complete dearth of evidence in the administrative record to explain the failure of the Bureau of Land Management, an agency of the Interior Department, to hold a Wyoming lease sale.”

That absence “renders the exercise of discretion arbitrary and capricious and an abuse of discretion,” he wrote.

Gordon said he was happy to garner at least a partial victory in the court, but admitted to being “baffled” by the distinction Skavdahl drew between the two years.

“Wyoming will examine its options for the upcoming remedy briefing and focus our efforts towards working with the pro-energy administration of President-elect Trump,” the governor said. 

“I am optimistic future federal oil and gas lease sales will be meaningful, contain sufficient acreage, and be consistently held as required,” he added.

Skavdahl has set a Jan. 31 deadline for the parties to file briefings on potential remedies stemming from his ruling, and Feb. 14 for responses to those briefs.

Federal courts do not have the power to order a competitive lease sale, nor can they order the Bureau to hold a lease sale to “make up” for the sales missed.

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