Greenwire: Appeals court won't lift Powder River Basin prohibition; overrule inujunction against irresponsible drilling.

Click here to view the 9th Circuit ruling and dissent.

Dan Berman, E&ENews PM senior reporter

A split federal appeals court declined today to alter an injunction against exploration and development of coalbed methane resources in the 14-million acre Powder River Basin of Montana and Wyoming.

The 9th U.S. Circuit Court of Appeals said a lower court judge correctly ordered the Bureau of Land Management to revise its environmental impact statement (EIS) for coalbed methane production and limited activity to 7 percent of the resource area.

The Northern Plains Resource Council, Northern Cheyenne Tribe and Native Action first challenged the Powder River Basin EIS in 2003, based on concerns of coalbed methane production on water, farmers, ranchers and historical sites in the region.

"I think it was a good decision because they basically ruled the environment impact statement was inadequate, which is what we've been saying all along," NPRC Chairman Mark Fix said today.

In 2005, Magistrate Judge Richard Anderson of U.S. District Court for the District of Montana ruled BLM's environmental impact statement was inadequate because it failed to analyze a phased development alternative. Anderson ordered BLM to prepare a supplemental EIS including such an alternative but also allowed activity while that document is being developed. The supplemental EIS was released earlier this year and is under review by BLM.

In their majority opinion, Judge Andrew Kleinfeld and Arthur Alarcon found Anderson did not abuse his discretion because the injunction "provides an equitable resolution consistent with the purposes of NEPA."

But 9th Circuit Chief Judge Mary Schroeder dissented, saying the decision could set a new NEPA precedent. "We have never allowed new federal action to take place before the agency has complied with NEPA," the judge wrote. "Yet the majority affirms the district court's order doing precisely that."

Anderson's injunction effectively installed the very alternative the BLM had failed to study, Schroeder argued.

"The district court's order allows major new activity to be introduced into the area, potentially involving mining, road construction, and water usage affecting precious underground aquifers, before NEPA has been satisfied," Schroeder wrote. "Allowing this activity to take place before completion of the EIS is contrary to the core purpose of NEPA, which is to ensure consideration of all alternatives before major government action is taken."

Fix said the environmentalists would have liked to expand the injunction but are not too disappointed. "It would have been nice to have gotten it all but the decision it was inadequate is a nice feather in our cap," he said.

Fidelity Exploration and Production Co., Anadarko Petroleum Corp., Devon Energy Corp. and Pinnacle Gas Resources all intervened on behalf of the Interior Department, asking the panel to limit any injunction.

BLM officials said the agency is reviewing the ruling and could not comment.



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