Oil leasing dispute heads to federal court

Matthew Brown, Associated Press

BILLINGS, Mont. (AP) -- A dispute over greenhouse gases from oil and gas drilling will head to federal court in Montana as attorneys for the government and the industry face off against environmentalists who say too little is being done to reduce emissions that contribute to climate change.

The legal quarrel was scheduled to land in court on Friday, amid increasing efforts by environmentalists to target emissions from burning fossil fuels and the release of methane and other greenhouse gases during the production of the fuels.

The debate over whether those activities are having a significant effect has gained importance as domestic oil and gas production booms.

In the Montana case, three groups want U.S. District Judge Sam Haddon to cancel Bureau of Land Management oil and gas leases covering almost 80,000 acres. BLM spokeswoman Kristen Lenhardt said there has been no drilling activity yet on the 120 leases in dispute.

The groups, including the Montana Environmental Information Center, argue that the government should have forced companies to reduce emissions from oil and gas fields as a condition of leasing. Sources of emissions include leaks, venting of excess natural gas, and exhaust from equipment used to drill for, process and transport oil and gas.

"The Bureau of Land Management should consider mandatory measures to keep methane out of the atmosphere and in the pipeline where it belongs for homes, schools and businesses," said Erik Schlenker-Goodrich with the Western Environmental Law Center, who is representing the plaintiffs.

The BLM counters that it considered greenhouse gas emissions prior to issuing the leases found the gases to be insignificant on a global scale. Because those emissions are "infinitesimal" compared to other human activities, reducing them would have little effect on climate change, the agency said.

"Even an order prohibiting all development of the leases would reduce global annual (greenhouse gas) emissions by an insignificant amount," BLM attorneys wrote in a motion asking Haddon to dismiss the case.

Industry groups including the American Petroleum Institute and Western Energy Alliance have intervened on the side of the government, saying environmentalists cannot prove any specific harm was suffered from the lease sales.

Kathleen Sgamma with the energy alliance said the lawsuit is part of a broader campaign against the industry, even as increased production of natural gas has displaced more polluting fuels such as coal. She added that hobbling oil and gas development in Montana would hurt economic growth with little benefit in terms of reduced emissions.

The dispute dates to 2008, when the Montana Environmental Information Center challenged a large lease sale that included oil and gas parcels in Montana.

The government later agreed to suspend the leases and further analyze the environmentalists' claims. The leases were re-issued in 2010, prompting the lawsuit now before Haddon.

Companies sometimes wait years to drill depending on market conditions and where leases are located.