Rethinking the Roan

Good post, Duke.

I'm pleasantly surprised by the Sentinel's stance. It's so...sane.

What is involved here legally to call this all off and reimburse Vantage? I can't imagine the O & G walking away from this quietly. Seems to me it would involve some serious time in court.  

"I wouldn't characterize caloric intake as "professional development." c rork

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by: Middle of the Road @ Thu Nov 19, 2009 at 15:10:04 PM UTC

It is in court...and settlement talks with Bill Barrett

which bought the leases from Vantage.  

Apparently if you buy leases with no intent to develop them as part of a protest, like McChristopher in Utah, it's illegal.  If you buy them as a venture capital firm, with no intent to develop but merely flip them in a couple of months for a profit, it's kosher.

Environmentalists and sportsmen groups--ten of them that are plaintiffs in the suit--believe they have a strong case--if the court agrees that BLM under Bush failed to take the requisite 'hard look' under NEPA (which the filings by BBC announcing its intents to drill 15* the wells contemplated and analyzed, just a few years ago, by BLM certainly suggest) then the (NEPA-derived) management plan authorizing the leases is remanded.  According to standard lease terms it is as if they never existed--leases issued illegally are NOT property rights: they are illegal.  

If canceled, by the court or by the Sect. of Interior, the purchase price is refunded, and the leases no longer exist.

Finally, the O&G shill in the comment Duke included in his comment above is wrong (SHOCKING!!!).  

BLM's poorly crafted plan also considered multiple wells per pad--the 210 wells contemplated were on fewer pads, I think BLM calculated around 20 per pad actually--thus under the BBC scheme the actual surface location of these monster-sized pads also are multiplied accordingly.


"There are a lot of reasons not to elect me." Mitt Romney in a moment of clarity

"I'm Mitt Romney and yes, Wolf, that's also my first name," Willard Mitt Romney demonstrating 'policy flexibility.'  

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by: ClubTwitty @ Thu Nov 19, 2009 at 15:25:22 PM UTC

[ Parent ]

Great info- thanks (n/t)

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by: Emma Anne @ Thu Nov 19, 2009 at 17:32:46 PM UTC

[ Parent ]

You can bet

the lawyers will get fat on this one, for sure. As I understand it, the basis for the lawsuit was inadequate study by the BLM. I don't believe there is any inherent problem in refunding the lease payments, so the court can, in fact, decide to stop the process, but I think only Ken Salazar can revoke the leases.

Twitty might have more on this.

"The modern conservative is engaged in one of mans' oldest exercises in moral philosophy, that is the search for a superior moral justification for selfishness."    John Kenneth Galbraith

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by: dukeco1 @ Thu Nov 19, 2009 at 15:30:06 PM UTC

[ Parent ]

Either the court or Sect can cancel the leases

I believe that the case involves both NEPA and FLPMA claims (Federal Lands Policy & Management Act--BLM's 'organic' act).

If the plaintiffs prevail, my understanding is the court is likely to remand the management plan--requiring that it be redone, with the leases suspended--or remand and cancel the leases.  A recent court case in New Mexico, in the 10th Circuit binding on the case, at Otero Mesa strengthens the case that BLM failed its obligations.  Companies holding the leases will be 'made whole' in the sense that the lease money will be refunded.  

Of course all those white shoe lawyers retained by BBC will certainly submit their invoices...in 15-minute increments.  Plaintiffs are being represented by the non-profit environmental law firm EarthJustice.

"There are a lot of reasons not to elect me." Mitt Romney in a moment of clarity

"I'm Mitt Romney and yes, Wolf, that's also my first name," Willard Mitt Romney demonstrating 'policy flexibility.'  

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by: ClubTwitty @ Thu Nov 19, 2009 at 15:35:45 PM UTC

[ Parent ]

oh, its not a revocation but cancellation...

meaning that the leases, if the plantiffs prevailed, were issued illegally and never should have been int he first place.  If effect, it is as if they never legally existed so cannot be revoked.


"There are a lot of reasons not to elect me." Mitt Romney in a moment of clarity

"I'm Mitt Romney and yes, Wolf, that's also my first name," Willard Mitt Romney demonstrating 'policy flexibility.'  

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by: ClubTwitty @ Thu Nov 19, 2009 at 15:37:00 PM UTC

[ Parent ]

So if I get it,

CT, a revocation might result in a "takings" claim, but a cancellation would not?

"The modern conservative is engaged in one of mans' oldest exercises in moral philosophy, that is the search for a superior moral justification for selfishness."    John Kenneth Galbraith

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by: dukeco1 @ Thu Nov 19, 2009 at 15:44:41 PM UTC

[ Parent ]

Thanks duke and twitty.

This is messy, to put it mildly.  

"I wouldn't characterize caloric intake as "professional development." c rork

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by: Middle of the Road @ Thu Nov 19, 2009 at 16:02:21 PM UTC

[ Parent ]

No, it's straight forward.

Its merely more of a semantics issue--revocation implies that they owned the leases, the law is clear that leases issued contrary to law can be rescinded or canceled, by either the Sect. or the court.

There is no takings claim.  Standard lease terms stipulate that leases can be canceled if they were issued in violation of the law.

It's part of the contract--if the court decides they are illegal, then two things could happen: the court could cancel the leases or suspend them pending completion of a new plan.  Completion of a new plan might find that BLM never should have decided to turn one of the state's biological treasure troves into an industrial zone--with leases canceled/refunded at that point, sometime in the (likely) distant future.  BLM's new plan could also correct the obviously glaring errors in its original documents and unsuspend the leases with new terms, etc.  

Or the court could cancel the leases altogether and refund the money Vantage spent on them.  Even if the court only goes for suspension, while the RMP is reworked, Sect. Salazar can decide to cancel the leases.  

In either case there is no 'takings' because no property right was ever legally granted.

"There are a lot of reasons not to elect me." Mitt Romney in a moment of clarity

"I'm Mitt Romney and yes, Wolf, that's also my first name," Willard Mitt Romney demonstrating 'policy flexibility.'  

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by: ClubTwitty @ Thu Nov 19, 2009 at 16:11:36 PM UTC

[ Parent ]

My worry is that they will allow BLM to correct

their errors, renew the leases and start drilling wells. Courts haven't been very kind to the environment in the last decade.

"I wouldn't characterize caloric intake as "professional development." c rork

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by: Middle of the Road @ Thu Nov 19, 2009 at 16:15:12 PM UTC

[ Parent ]

That is a possibility...

but there are some very significant errors--it's not just paperwork that got misfiled.

"There are a lot of reasons not to elect me." Mitt Romney in a moment of clarity

"I'm Mitt Romney and yes, Wolf, that's also my first name," Willard Mitt Romney demonstrating 'policy flexibility.'  

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by: ClubTwitty @ Thu Nov 19, 2009 at 16:36:59 PM UTC

[ Parent ]

Yeah, Twitty, I understand that.

Just pointing out a reality that exists, you know?  

"I wouldn't characterize caloric intake as "professional development." c rork

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by: Middle of the Road @ Thu Nov 19, 2009 at 16:59:40 PM UTC

[ Parent ]

Take that back.

"With the first link, the chain is forged. The first speech censored, the first thought forbidden, the first freedom denied, chains us all irrevocably."

12/15/11 - RIP squeaky duck. You were plush, loved and finally ripped apart after over a year.

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by: droll @ Thu Nov 19, 2009 at 17:03:21 PM UTC

[ Parent ]

I take it back. :)

"I wouldn't characterize caloric intake as "professional development." c rork

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by: Middle of the Road @ Thu Nov 19, 2009 at 17:04:35 PM UTC

[ Parent ]

Dang, could it be that Mr. Seaton

has brought sanity to the DS?  Coupled with the management retirement last week, journalism might be making a comeback in Happy Valley.

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by: WesternSlopeThought @ Fri Nov 20, 2009 at 04:26:51 AM UTC

[ Parent ]

Now, now.

Don't get carried away. :)

"I wouldn't characterize caloric intake as "professional development." c rork

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by: Middle of the Road @ Fri Nov 20, 2009 at 14:42:35 PM UTC

[ Parent ]

No great illusions

MotR, are ya going to kick off your Friday music video diary today?  I have a contribution if you do.

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by: WesternSlopeThought @ Fri Nov 20, 2009 at 15:52:34 PM UTC

[ Parent ]

Oh shit!

I totally forgot.

Okay, expect it in about 10 minutes. I have to find the perfect video.  

"I wouldn't characterize caloric intake as "professional development." c rork

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by: Middle of the Road @ Fri Nov 20, 2009 at 17:38:38 PM UTC

[ Parent ]

Unbalanced Policy

While the issue of wells in/on the Roan Plateau is one thing, it is also part of a larger and, in my opinion, much larger issue: a grotesquely unbalanced, disconnected policy regarding not only energy but also the environment and national security in the fast-looming Post Carbon Era.

IF one asks: "What should we do about declining sources of petroleum?" then one might well look at the Roan as a possible solution.

The larger question is: How can we organize an orderly shift away from carbon energy as quickly as possible while minimizing economic/social disruption on an unprecedented scale? Roan or not, world petroleum production has long been in the vicinity of 85 million barrels a day, with virtually no margin to spare. [Google research term: "peak oil."] There is lots of evidence that this is the all-time peak and will go down from there, while at the same time demand (notably from China and India, but also from the United States) continues to rise. The rate at which known sources are depleted has long exceeded the rate of discovery of new reservoirs, or any other sources (which are much more expensive and highly problematical in their own unique ways). Once the balance between production and demand tips to the other side, where demand exceeds maximum possible production, even by as little as 1,000 barrels a day, we can expect prices to soar way beyond anything seen so far ($200, $300, $400?) accompanied by intense political competition [diplomacy if it works, war if necessary] for access to new fields (Arctic, Africa notably), while at the same time, the environmental impact of burning carbon fuel of any kind continues to progress towards its own tipping point with unknown consequences. (Carrying on about peak oil is not meant to deemphasize the impossibility of continuing to burn carbon--oil or coal--in the wake of environmental concerns; this is a pressing issue in and of itself.)

The overriding great problem here is that as a society, we lack a comprehensive, unified policy that takes all these issues--which above all are social issues, given how our economy and daily lives are organized around carbon energy--into account and plots a rational path forward. Thus, we read right here on ColoradoPols arguments about whether FasTrax will be "profitable," or whether it should be abandoned. Abandoned in favor of what alternative? More cars burning $10-$20/gal gasoline--when they can find any--for a growing population? [DavidThi's proposal last night about plunging ahead immediately with FastTrax on all fronts, possibly with reduced wages temporarily, is worth more discussion in this regard.]

[Let me emphasize this point: the issue here is NOT that supplies will gradually outpace demand, or that I don't want no stinkin' oil well in my bucolic campsite. It is that once the tipping point arrives, or is seen to have arrived, prices will soar immediately, way out of proportion to the actual imbalance. This game is played at the margin--not just for the last, missing gallon. Whether or not wells are sunk on the Roan is a very short-term, and therefore irrelevant, sideshow orchestrated by a few individuals entirely focused on their personal bank accounts.]

No argument about canceling oil leases can be taken seriously unless the advocate also, in the same breadth, proposes an alternative. 9One side arguments can be made, all right, but they will have trouble being taken seriously.) In this case, the only feasible, very short-term, alternative (that I can see) is to reduce demand (and I put mass transit in that category), quickly and dramatically (next 5 years, not 25), while at the same time plunging head with the sense of urgency present on December 8, 1941, with renewable, green sources of power, all at the same time and all with a measure of uncertainty about the total practicality of any one measure. This is World War III, and it's already started! (see OPEC embargo, 1978.)

We live in at the end of the Era of Carbon Energy. That era is coming to an end, whether we want it to or not. The facts are there; denying them is simply the Ostrich Opposition Policy--Silliness (OOPS) personified. The issue is not producing more petroleum; Roan or not, Alberta oily sand or not--the tipping point is looming, and focusing on some of the more extreme oil production "solutions" is a disservice because it distracts from meaningful solutions. The issue is how to manage the transition to the post-petroleum era while we still can, before utter economic chaos, and accompanying social chaos, ensues.

Oil producers have nothing useful to contribute to this discussion.

Thus endeth the reading.

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by: JO @ Thu Nov 19, 2009 at 15:56:38 PM UTC