Gas Lease Research Articles

Indigenous peoples and the power(lessness) of public participation: Assessing effects of Indigenous community input in the Alaskan Coastal Plain oil and gas leasing program environmental impact statement

Public participation in the U.S. environmental impact assessment process is legally required under the National Environmental Policy Act, yet the procedural norms of the process often leave members of the public feeling powerless. While public participation has the appearance of a democratic process, it is imbued with unequal power dynamics and federal agencies maintain decision-making authority. Despite sovereignty and treaty rights, Indigenous communities in the U.S. do not participate in environmental decision-making through a collaborative governance structure. Instead, Indigenous communities interested in project impacts primarily voice their concerns through the public comment process. This paper explores Indigenous participants’ impacts on environmental impact decision-making through an illustrative case study structure. The phenomenon is explored in an in-depth analysis of the recent leasing environmental impact statement (EIS) for oil exploration and development in the 1002 Coastal Plain area of the Arctic National Wildlife Refuge in Alaska. This work uses a qualitative content analysis of the Coastal Plain case study to assess how public comments, particularly comments from Indigenous peoples, impact change in the documents that follow public participation processes. From this analysis, this article aims to illustrate a few key issues with how Indigenous input is considered in public participation processes. Findings indicate that public comments may result in minor changes to assessment documents but, overall, public input has little influence on project outcomes.

Non-target analysis of crude oil photooxidation products at high latitudes and their biological effects

With new oil and gas lease sales in high-latitude regions, there exists a need to better understand the chemical fate of spilled oil and its effects on biological life. To address this need, laboratory simulations of crude oil spills under sub-Arctic conditions were conducted using artificial seawater and exposure to solar irradiation to create Hydrocarbon Oxidation Products (HOPs). HOPs characterization and their biological effects were assessed using ultra high-performance liquid chromatography (UHPLC) with high resolution mass Orbitrap spectrometry and the aryl hydrocarbon receptor (AhR) chemically activated luciferase gene expression (CALUX) assay. Non-target UHPLC-Orbitrap mass spectrometry analysis identified 251 HOPs that were in greater abundance in light-exposed samples than dark controls. Oxidized polycyclic aromatic hydrocarbons were also detected, including phenanthrene quinone, anthraquinone, hydroxyanthraquinone, and 9-fluoreneone. The composition of HOPs were consistent with photo-products of alkylated two to four ring PAHs, primarily compounds between 1 and 3 aromatic rings and 1–3 oxygens. The HOP mixture formed during photochemical weathering of Cook Inlet crude oil induced greater AhR activity than parent petroleum products solubilized in dark controls, indicating that HOPs, as a complex mixture, may contribute to petroleum toxicity more than the parent petroleum compounds. These non-targeted approaches provide the most comprehensive analysis of hydrocarbon oxidation products to date, highlighting the diversity of the complex mixture resulting from the photooxidation of crude oil and the limitations of targeted analyses for adequately monitoring HOPs in the environment. Taken together, these data identify a critical “blind spot” in environmental monitoring and spill clean-up strategies as there is a diverse pool of HOPs that may negatively impact human and ecosystem health.

Royalty Wars: The Dark Side to Raising the Minimum Royalty Rate for Oil and Gas Leasing on Federal Land

In 2022, the Inflation Reduction Act took marked steps toward changing the course of the oil and gas industry for the first time in over 100 years, requiring that all federal oil and gas leases issued for the following decade have a minimum royalty rate of 16.67%. This paved the way for a major adjustment in the oil and gas industry, which has seen a 12.5% minimum royalty for the past century. In 2023, the Department of the Interior proposed to permanently codify these changes, citing purposes of ensuring a fair return to taxpayers and protecting the environment. This Article argues that the royalty provision in DOI’s proposal, if passed through Congress, will lead to harmful effects on the economy and production while failing to fulfill its purpose of protecting the environment. Instead of raising the minimum royalty, which will inevitably stunt the growth of the domestic oil and gas industry, agencies should regulate strategically to both promote domestic production and reduce the industry’s emissions footprint on the environment

Royalty Wars: The Dark Side to Raising the Minimum Royalty Rate for Oil and Gas Leasing on Federal Land

Royalty Wars: The Dark Side to Raising the Minimum Royalty Rate for Oil and Gas Leasing on Federal Land

Recovery of the grizzly bear at the intersection of law and science

Over the last 30 years, there have been numerous legal battles over recovery of the grizzly bear. These battles have brought to fore a question central to implementation of the Act, namely is the goal of recovery to merely remediate extinction risk or to affect broader ecosystem recovery. I systematically reviewed court decisions related to the grizzly bear’s recovery plan, efforts to remove protections for grizzly bears, and challenges to logging, mining and other projects with impacts to grizzly bears. A legal challenge to the grizzly bear’s 1993 recovery plan forced the Service to develop habitat-based recovery criteria for the Greater Yellowstone Ecosystem. Legal efforts to reopen the recovery plan and expand recovery into additional areas of historic range, however, were unsuccessful, leaving the scope of recovery largely at the discretion of the U.S. Fish and Wildlife Service. Lawsuits brought by multiple conservation groups, tribes and individuals have constrained this discretion, twice stopping the agency from stripping Greater Yellowstone grizzly bears of federal protections. This has allowed the population to grow and forced consideration of the impact of removing protections for Greater Yellowstone bears on overall recovery as a requirement of any future effort to remove protections. Court decisions were issued on 65 challenges to projects impacting grizzly bear habitat, including 44 involving logging and related road construction, seven mining, four livestock grazing, two recreation, five oil and gas leasing and three road projects, leading to 11 of these projects being stopped and nine modified. Lawsuits were also filed to stop hunting in four instances, trapping in one, predator control in one and railroad mortality in two, as well as activities that disturb bears, including helicopters in two instances and snow mobile use in another, resulting in four being stopped and another 3 modified. Protection of the grizzly bear under the Endangered Species Act, along with subsequent litigation, has led to substantial changes in management of public lands in the four recovery zones with grizzly bear populations, but not elsewhere in the species’ range. Overall, the legal system is an important, but often overlooked, part of recovery of endangered species.

Relinquishing Riches: Auctions versus Informal Negotiations in Texas Oil and Gas Leasing

This paper compares outcomes from informally negotiated oil and gas leases to those awarded via centralized auction. We focus on Texas, where legislative decisions in the early twentieth century assigned thousands of proximate parcels to different mineral allocation mechanisms. We show that during the fracking boom, which began unexpectedly decades later, auctioned leases generated at least 55 percent larger up-front payments and 40 percent more output than negotiated leases did. These results suggest large potential gains from employing centralized, formal mechanisms in markets that traditionally allocate in an unstructured fashion, including the broader $3 trillion market for privately owned minerals. (JEL D44, L71, Q35)

One-to-Many Matching with Complementary Preferences: An Empirical Study of Market Concentration in Natural Gas Leasing

Previous articleNext article No AccessOne-to-Many Matching with Complementary Preferences: An Empirical Study of Market Concentration in Natural Gas LeasingAshley VissingAshley Vissing Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of the Association of Environmental and Resource Economists Just Accepted Published for the Association of Environmental and Resource Economists Article DOIhttps://doi.org/10.1086/724498 Views: 13Total views on this site HistoryAccepted January 24, 2023 © 2023 Association of Environmental and Resource Economists. All Rights reserved.PDF download Crossref reports no articles citing this article.

The Arctic-related activities of Joe Biden’s administration in 2021–2023

The article outlines the US administration activities with regard to the Artic in 2021–2023: the moratorium on Oil and Gas Leasing Program in the Arctic National Wildlife Refuge; military exercises in Alaska and in Norway; continued construction of polar icebreakers; personnel changes in government bodies responsible for the Artic; the boycott of Russia in the Artic Council; “National Strategy for the Arctic Region”. A conclusion is offered that there were no significant achievements in this field while the split in the Artic Council has evolved into a stalemate situation.

Do Oil and Gas Lease Stipulations in the Northwestern Gulf of Mexico Need Expansion to Better Protect Vulnerable Coral Communities? How Low Relief Habitats Support High Coral Biodiversity

The continental shelf of the northwestern Gulf of Mexico harbors extensive reefs and banks that support diverse coral reefs and mesophotic communities. Mesophotic communities range in depth from 40 to 200 m and, in this region, foster some of the densest coral forests [aggregations of mesophotic octocoral, antipatharian, and branching stony coral communities] reported in published literature (10.23 ± 9.31 col/m2). The geologic features underlying the exposed substrates that harbor mesophotic communities are targeted for extensive hydrocarbon exploration and extraction, as they often contain oil and/or natural gas. The Bureau of Ocean Energy Management regulates offshore energy development in the United States and is tasked with protecting sensitive biological communities from impacts related to oil and gas activities. This study analyzed alpha and beta diversity of mesophotic coral forests on fourteen topographic banks in the northwestern Gulf of Mexico. The objective of the study was to examine differences in structure and community in relation to lease stipulations established by the Bureau of Ocean and Energy Management. It was determined that dense and diverse mesophotic coral forests and carbonate producers exist in present regulatory zones that prohibit oil and gas activities; however, the coral communities exist in higher densities, diversity, and richness in low relief substrates outside of these regulatory zones. Our findings suggest low relief hard substrates serve as important habitat for mesophotic coral forests; thus, we suggest the expansion of current stipulations should be considered to provide better protection to vulnerable coral communities on low relief features. Furthermore, additional studies to refine the relationship between low relief structures and biodiversity are needed to develop more meaningful habitat definitions to support resource management and improve resource protection in the future.

This Land is Our Land: Protesting to Protect Places on the Margin

ABSTRACT In 2008 Tim DeChristopher illegally bid on Bureau of Land Management (BLM) parcels offered for energy exploration leases near National Parks in Utah. DeChristopher and his supporters founded Peaceful Uprising, a climate justice movement, in response to his actions. We analyze mediated news coverage and in situ rhetoric gathered via rhetorical fieldwork to examine the ways that Peaceful Uprising combined place-based rhetoric and place-as rhetoric tactics to protect these park-adjacent lands from oil and gas leases and to protect DeChristopher from being convicted for making false bids on the leases. This analysis offers a unique example of place-based protest that is focused on otherwise ignored BLM lands. Moreover, we focus on a place—Salt Lake City—that is not conventionally perceived as a bastion of activism and protest about climate change. Our analysis expands the place in protest framework to considerations of: 1) the convergence of the place-based and place-as rhetoric tactics, and 2) the potential of place in protest appeals to enact different futurities.

Progress of the Oil Spill Risk Analysis (OSRA) Model and Its Applications

The Bureau of Ocean Energy Management (BOEM) is responsible for managing the development of US Outer Continental Shelf (OCS) energy and mineral resources. Because oil spills may occur from offshore oil and gas activities, BOEM conducts oil spill risk analysis (OSRA) prior to oil and gas lease sales. Since the 1970s, BOEM has developed and applied the OSRA model to evaluate the risk of potential oil spills to environmental resources. This paper summarizes some of the OSRA model progress and applications in the past decade: (1) calculation of the risk of catastrophic oil spills (with a volume over one million barrels), which concludes that the return period of a catastrophic oil spill in OCS areas is estimated to be 165 years; (2) a more efficient way to estimate the probability of oil spill contact to environmental resources in the Gulf of Mexico; (3) weathering calculations in OSRA, which enhances the accuracy of the OSRA model results; and (4) application of OSRA to the Ixtoc I oil spill as an example of how the OSRA model simulates large oil spills for oil spill preparedness and response.

Mineral Trespass: Expanded Regulation in the Wake of Technological Advancement

Technological advancements in the oil and gas industry have created challenges for courts and the Texas Railroad Commission regarding how to properly balance the protection of lessors and lessees, while also furthering the public interest of maximizing production. The Texas Railroad Commission currently does not have regulations in place to protect mineral lessors or lessees with respect to spacing between separate leases covering different depths in the vertical plane within the same tract. Without correct spacing regulations from the Railroad Commission, an operator’s production within deeper strata cannot be properly analyzed by courts in trespass actions. The move from vertical to horizontal drilling has enabled operators to use technologic advancements, such as hydraulic fracturing, to obtain oil, gas, and other hydrocarbons that were once thought unattainable. Mineral owners have been given opportunities through oil and gas lease clauses, such as the Pugh clause, to sever their mineral rights and create separate leasehold estates within the same tract of land. Requiring operators to adhere to expanded Rule 37 spacing requirements in the vertical plane would help reduce subsurface trespass claims. The Texas Railroad Commission should expand Rule 37 to apply to horizontal severances in the vertical plane, as well as offset lease lines. Courts should reshape subsurface trespass analyses by balancing multiple factors. In the absence of clear and convincing evidence of a physical intrusion, future courts should analyze and balance the following factors for subsurface trespass claims: (i) public interest in exploration, or the interests of society; (ii) speculation versus evidence of a physical intrusion based on a reasonable and prudent operator standard; (iii) the degree of waste from allowing production versus not allowing production; and (iv) harm to the geologic formation. The proposed spacing regulations would have positive effects on all parties to an oil and gas lease by mitigating subsurface trespass claims, creating efficient drainage, and preventing both surface and economic waste. Further, courts have yet to address the issue of subsurface trespass and the impact of the rule of capture regarding multiple wells drilled on the same tract in the vertical plane. In the absence of adequate spacing requirements in the vertical plane, courts should employ a holistic analysis for subsurface trespass claims and consider multiple elements rather than solely the public interest.

Using Current Legal Tools to Achieve Net Zero Greenhouse Gas Emissions from New and Existing Federal Oil and Gas Leases

Fossil fuel development on federal lands accounts for 24% of all U.S. carbon dioxide (CO2) emissions. These emissions can be reduced significantly by requiring federal oil and gas development activity to mitigate greenhouse gas (GHG) emissions. The Bureau of Land Management (BLM) has authority to define the terms and conditions of new oil and gas leases and to impose conditions of approval on existing leases at the drilling stage. Using this authority, the BLM could require net zero emissions on some existing and all new oil and gas leases without waiting for congressional action or regulatory changes. Applying existing legal tools would allow for continued energy production while a long-term climate strategy is developed, and still drive significant GHG emission reductions in the meantime. Additionally, green jobs would be created by incentivizing oil and gas operators to generate offset credits by plugging the more than 2 million orphaned or abandoned oil and gas wells that litter the landscape. Finally, the incentive to plug idle wells and retire leases early would reward operators for deciding to keep some fossil fuel resources in the ground.

The Role of Trust Law Principles in Defining Public Trust Duties for Natural Resources

Public trusts for natural resources incorporate both limits and duties on governments in their stewardship of those natural resources. They exist in every state in the United States—in constitutional provisions, statutes, and in common law. Yet the law recognizing public trusts for natural resources may contain only the most basic provisions—often just a sentence or two. The purpose and terms of these public trusts certainly answer some questions about the limits and duties of trustees, but they do not answer all questions. When questions arise that the body of law creating or recognizing a public trust for natural resources does not fully answer, trustees, lawyers, and courts often look to trust law for help. In fact, they have been doing so for more than a century, including in the U.S. Supreme Court’s landmark 1892 public trust decision, Illinois Central Railroad Co. v Illinois. In this sense, trust law provides a set of background or underlying principles for interpreting and applying public trusts. Using cases from around the country, this Article sets out a four-step methodology for determining when and how to use trust law principles to help interpret public trusts. This methodology can be applied in any case involving the use of specific trust principles to help interpret any particular public trust. This Article also explains that the relevant trust law should not be limited to private trust law, but rather it should include general trust principles, charitable trust law principles, and private (or noncharitable) trust law principles. This Article uses a 2019 Commonwealth Court of Pennsylvania decision, Pennsylvania Environmental Defense Foundation v. Commonwealth, as a case study. The case applies article I, section 27 of the Pennsylvania Constitution, which requires that public natural resources be conserved and maintained for the benefit of present and future generations. In that case, the court used an interpretation of private trust law to decide that the state could spend some bonus and rental payment money from oil and gas leasing on state forest and park land, which is constitutional public trust property, for non-trust purposes. This Article applies the four-part methodology to the case, explains general trust law and charitable trust law principles that the Commonwealth Court of Pennsylvania did not address, and argues that the use of these principles better fits the constitutional public trust. It concludes that the money from bonus and rental payments should be spent entirely for the purposes of the trust. This Article draws attention to both the potential value of trust law principles and also to their potential danger in the interpretation and application of public trust laws for natural resources. Trust law has the potential to enhance the protectiveness of public trusts by imposing various fiduciary duties on trustees. It also has the potential to undermine public trusts, particularly through rules requiring or encouraging that trust assets be financially productive. To vindicate public trusts for natural resources, environmental and natural resources lawyers need to become better trust lawyers.

E&P Notes (January 2021)

E&P Notes (January 2021)

Recent Judicial Decisions of Interest to Energy Lawyers

The past year was a busy one for the energy industry, with many reported decisions of significance. Key decisions regarding constitutional jurisdiction, the duty to consult, and judicial review kept the industry in a pattern of optimism and hesitancy. This article summarizes a number of recent judicial decisions and provides commentary on their significance to Canada’s energy industry. In particular, decisions reviewed in this article cover subjects including constitutional division of powers, the Crown’s duty to consult, oil and gas leases and purchase and sale agreements, environmental remediation and liability, insolvency, intellectual property, tax, remedies and injunctive relief, class actions, conflict of laws, arbitration, and judicial review. In each case, the facts, a summary of the decision, and commentary on the outcomes and future implications for energy lawyers and the industry are canvassed. With the past year of decisions finishing with COVID-19 restrictions, the energy industry saw some of the most drastic change in recent memory. The industry will need to exercise perseverance in these tumultuous times in order to adapt, withstand, and recover from the changes of this past year.

Experience is a Dear Teacher--The Texas Wind Decommissioning Statute

As is well known among both my students and colleagues, my professional life as a lawyer (and later as a law professor) took a monumental turn in 1999 when I reviewed and drafted my first wind lease in Nolan County, Texas. That lease, as well as all of the other wind leases at the time, contained contractional “clean up and restoration” clauses similar to many oil and gas leases then in use. Simply put, the leases provided that upon expiration or termination of the lease (which for a wind lease, unlike an oil and gas lease, might be fifty or more years in the future), the lessee would remove its equipment and restore the surface “to as near as reasonably possible to its original condition” prior to the lease.

Pennsylvania--Recent Developments in Pennsylvania Jurisprudence Related to Oil and Gas Leasing and Conveyancing

Pennsylvania is the largest producer of shale gas in the United States and is the second-largest natural gas-producing state overall. Owing to its strategic location atop the Marcellus and Utica Shale Formations, Pennsylvania’s position as a major natural gas producer is relatively new. Just a little over a decade ago, Pennsylvania ranked sixteenth among states in total natural gas production. With this rapid rise in the amount of natural gas development, there has been a corresponding increase in activity in courtrooms across Pennsylvania—both in state and federal courts. As a result, Pennsylvania oil and gas law has evolved within a number of different legal areas, with leasing and title issues perhaps being among the most frequent—and most important—topics that have been addressed by courts. This survey will address the 2019 reported judicial opinions issued by state courts in Pennsylvania that address oil and gas leasing and title issues.

Alaska

The First Regular Session of the thirty-first Alaska Legislature began on January 15, 2019, and ended on May 15, 2019. A First Special Session was held from May 16, 2019, through June 13, 2019, with a Second Special Session following from July 8, 2019, through August 6, 2019. The 2019 legislative session resulted in virtually no oil and gas legislation being passed, as the Alaska Legislature focused primarily on legislation regarding the State budget and the funding of the Permanent Fund Dividend. Despite the uncharacteristic lack of oil and gas legislation, the Legislature addressed the prevalent issue of oil and gas leasing in the Arctic National Wildlife Refuge (“ANWR”) through the passage of Senate Joint Resolution No. 7.

Sequential Auctions with Synergy and Affiliation across Auctions

This paper performs a structural analysis of sequential auctions with both synergy and affiliation across auctions. I propose a flexible yet tractable sequential auction model under the private value paradigm and establish its nonparametric identification, demonstrating an intuitive and general method for disentangling synergy from affiliation. After developing an estimation procedure closely tied to the identification steps, I apply it to data on adjacent oil and gas leases that are auctioned sequentially. I assess the role played by affiliation versus synergy in the observed allocation patterns and evaluate the counterfactual policy of bundled auctions.