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Oil company says BLM's inaction cost company $47 million

A Texas-based energy company that underwent a five-year review process and received approval for drilling from the Bureau of Land Management says endless finger-pointing and an arbitrary decision cost it $47 million and ended its activity in Utah.
A Texas-based energy company that underwent a five-year review process and received approval for drilling from the Bureau of Land Management says endless finger-pointing and an arbitrary decision cost it $47 million and ended its activity in Utah.
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SALT LAKE CITY — A Texas oil and gas company said it did everything the Bureau of Land Management asked it to do to begin drilling 10 wells on two existing well pads later this month in eastern Utah, but now approval has been rescinded and no one can tell the company why.

The decision, which EnerVest says has BLM field offices finger-pointing to Washington, D.C., and vice versa, has cost the company $47 million and has ended its planned industry activity in the state.

"This clearly is one last tactic from an outgoing administration that has spent eight years trying to put us out of business by overregulating and overreaching its authority," EnerVest CEO John Walker said. "I feel that as citizens it is our responsibility to speak out against our government when it illegally abuses its power to further advance its job-killing agenda."

EnerVest filed a lawsuit Wednesday in federal court against Interior Secretary Sally Jewell over the federal agency's failure to issue 10 applications to drill that had been previously approved as part of an overall master development plan in the West Tavaputs Plateau.

The company inherited the leases from the Bill Barrett Corp., which ceased doing business in Utah, and an environmental review had been done from 2005 to 2010. After that, the then-state director of the Utah BLM issued a record of decision approving the action.

According to the lawsuit, EnerVest filed for the applications to drill in September, which kicks off a 30-day deadline for the BLM to issue the permits if all environmental requirements have been met.

After a series of back-and-forth conversations with BLM employees in the Price and Vernal field offices, EnerVest said it was informed by local staffers that the permits were not going to be approved in light of new national guidelines issued by the Council of Environmental Quality regarding the impacts from greenhouse gas emissions.

BLM employees said an additional environmental assessment would be required because the current review was inadequate.

EnerVest claims in its lawsuit that nothing in the council guidelines supplant current laws, regulations or legally binding agreements.

The state BLM office indicated that its headquarters in Washington, D.C., wanted personnel in Utah to take a more aggressive approach to air quality.

Rep. Jason Chaffetz, R-Utah, intervened last week, sending a letter to Jewell inquiring why the permits had been delayed.

The response from Jewell's office was that approval of permits is made at the local field office level, the suit said.

EnerVest said it has been unable to get a straight answer and asserts the federal agency has never been able to identify any legal requirement that has not been satisfied under environmental laws.

An agreement reached under the drilling management plan requires that drilling activity occur in the off months because of the proximity to the Desolation Canyon Wilderness Study Area. EnerVest said it would have to begin operations by late December and conclude by April's end.

The suit said EnerVest invested millions in the project area and could have instead pursued development opportunities in other basins.

In an emergency filing, EnerVest is asking the judge to direct the BLM to issue all 10 applications to drill and reimburse the company for legal fees.