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Federal oil leasing stalls again in North Dakota

The U.S. Department of the Interior has cancelled a North Dakota sale planned for the first quarter of this year, attributing delays to a February ruling in a Louisiana court that blocked the Biden administration's attempts to factor climate change implications into its decision making.

An oil pumping station
An oil pumping station is part of the Badlands landscape July 6, 2010, in western North Dakota.
Forum News Service file photo

BISMARCK — Sales of oil leases on federal lands in North Dakota have stalled again in the wake of a Louisiana court ruling that blocked the Biden administration from factoring climate change costs into its decision making.

An auction planned for the first part of this year in North Dakota will not take place after the federal government missed a mid-February deadline to notice the sale, and the further delay has reinvigorated the state's lawsuit over restricted federal leasing under President Joe Biden.

The delay comes after attorneys representing the U.S. Department of the Interior earlier this year told a Bismarck judge they intended to hold a lease sale in the Montana-Dakotas region in the first quarter of this year. Those assurances were part of the reason that U.S. District Judge Daniel Traynor rejected North Dakota's bid to force future lease sales , but late last week attorneys for the agency filed a notice saying that a February order by a Louisiana court "has prevented Interior from proceeding with those sales" on their anticipated timelines.

While Traynor denied North Dakota's case for the time being, he left the door open for the state to come back if other court cases continued to interrupt lease sales. Many oil producing states are pursuing a joint lawsuit against the Biden administration over a federal leasing pause it enacted last year, while North Dakota has opted to pursue a solo challenge .

North Dakota Special Assistant Attorney General Paul Seby responded to the federal government's filing Tuesday, March 1, in a motion asking for Traynor to schedule deadlines for next steps in their case. With the cancellation of the first quarter 2022 sale, "it appears (the Department of the Interior) will continue to cancel quarterly lease sales in North Dakota for some undetermined time" while the Louisiana case is litigated, Seby said.

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A federal judge in Louisiana last month blocked the Biden administration's calculations of the social costs of greenhouse gas emissions. The contested tool, which the Department of the Interior had incorporated into its oil and gas leasing programs, assigns a dollar value to greenhouse gas emissions in an effort to factor climate change implications into federal rule making.

That ruling has implications for oil leasing on public lands across western states, where the timeline for future lease sales is again unclear. Stalled federal leasing under Biden has frustrated oil industry advocates in North Dakota who argue the administration is slow-walking the sales and hamstringing U.S. oil development, even as global supply is constrained. 

Lynn Helms, the director of the North Dakota Oil and Gas Division, said in an interview Tuesday he does not expect the administration to hold a second quarter sale, either.

“And if you think they’re gonna do third quarter, you’ve got a very vivid imagination,” he said. “But we’ll see what $106 (per barrel) oil does.”

Global energy markets have been rocked by last week's Russian invasion of Ukraine, which has pushed already lofty U.S. oil prices to heights not seen since 2014. Oil industry proponents have argued that the Biden administration needs to encourage domestic energy production as a national security measure.

Melissa Schwartz, a spokesperson for the Department of the Interior, pointed to the February ruling in the Louisiana court as the cause for leasing delays and said the agency “continues to move forward with reforms to address the significant shortcomings in the nation’s onshore and offshore oil and gas programs.”

“Specifically, the Department is committed to ensuring its programs account for climate impacts, provide a fair return to taxpayers, discourage speculation, hold operators responsible for remediation, and more fully include communities, tribal, state and local governments in decision-making,” Schwartz said.

Helms told an interim legislative committee Tuesday that delays in the federal leasing on North Dakota lands are holding up the sales of 242 parcels and more than a 1,000 oil wells that had been nominated for auction.

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Readers can reach Forum reporter Adam Willis, a Report for America corps member, at awillis@forumcomm.com .

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