Upper Missouri River Breaks leases mired in controversy

Land Letter - 01/27/2005

Charles Donefer, Land Letter reporter

A small company's plan to extract natural gas from the Upper Missouri River Breaks National Monument is prompting questions over whether an energy company should be allowed to drill in a national monument designated soon after the granting of its lease.

At issue are three natural gas leases and a right-of-way for a pipeline granted to Montana-based Macum Energy in November of 1999. Four months later, the Montana Wilderness Association and Curley Youpee of the Ft. Peck Assiniboine and Sioux Tribes of Montana sued the Bureau of Land Management and Macum, alleging BLM granted the leases without conducting an adequate environmental analysis in violation of the National Environmental Policy Act, Endangered Species Act and National Historic Preservation Act.

The right-of-way shown above was issued to Macum Energy Inc. in November 1999. Photo courtesy of the Bureau of Land Management. But before the case could work its way through the courts, a new twist developed when the area in question became part of a national monument. In December of 2000, Interior Secretary Bruce Babbitt designated 377,000 acres of land in north-central Montana as the Upper Missouri River Breaks National Monument. Although the proclamation, signed by President Clinton during the final days of his administration, bans new drilling, it allows for production on existing gas leases.

Last March, Judge Donald Molloy of the U.S. District Court for the District of Montana ruled against BLM and Macum, ordering a preliminary injunction on all surface-disturbing activities on the lease sites. In addition, Molloy ordered the agency to complete updated environmental reviews for the oil and gas development and associated pipeline, including additional consultation with nearby American Indian tribes.

BLM released the draft environmental assessment for the pipeline required under the ruling last week. The assessment evaluates leaving the pipeline as it stands, removing the entire pipeline or removing the part of the pipeline on BLM lands. The agency's preferred action is to leave the pipeline and right-of-way as it exists currently.

Monument manager Gary Slagel said the environmental impact statement (EIS) and biological assessment for oil and gas development required by Molloy's ruling will be folded into the monument's resource management plan, which is due to be completed by the fall of 2006. The agency is expected to release a draft plan this summer.

Cathy Lewis, MWA's attorney, said the release of the environmental assessment is premature, noting that the agency has not yet completed the monument's resource management plan and associated EIS, which would include a comprehensive look at energy development. "One of the reasons the judge struck down the original environmental assessment [was] because it doesn't have an EIS to tier off," Lewis said.

The wilderness association is asking Judge Molloy to make his temporary injunction permanent -- an issue he considered in a hearing earlier this month.

BLM officials said Macum's leases should be honored in the monument. "The impacts are tied to what makes the monument a special place. You can have development and still not disturb those things," said Stanley Jaynes of the agency's Havre, Mont., field station.

Joining BLM and Macum in opposing the permanent injunction is the Mountain States Legal Foundation, which has supported Macum in defending its leases.

The foundation's Steve Lechner expects the judge to deny MWA's request because it does not meet the standard for a permanent injunction. In order for a permanent injunction to be granted, the plaintiff must demonstrate "irreparable injury" -- something Lechner says cannot be proven, particularly since the project in question will not damage the surface.