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North Dakota lawsuit over oil leasing on federal lands continues despite plans for upcoming sale

While numerous other oil and gas producing states joined a single lawsuit to challenge an executive order by President Biden last year, North Dakota has opted to pursue a solo case against the administration.

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An oil pumpjack operates near Williston, North Dakota, on Jan. 23, 2015.
REUTERS / Andrew Cullen

BISMARCK — Even with oil leasing expected to reopen soon on North Dakota’s federal lands, the state is pursuing a lawsuit against President Joe Biden’s administration for a yearlong pause that it says has already cost the state tens of millions of dollars in tax revenues and royalties. 

North Dakota is asking a federal judge to require the U.S. Department of the Interior, which implemented the pause over the last year, to hold all future lease sales except under specific circumstances in which it has met legal requirements to cancel them. An attorney representing the agency argued during a hearing at the federal courthouse in Bismarck, Wednesday, Jan. 12, that the Department of the Interior has long held the discretion to determine which of its land to make available for leasing.

U.S. District Judge Daniel Traynor pressed North Dakota attorneys on the basis for their lawsuit on Wednesday, beginning his line of inquiry by noting the feds are already slated to reopen leasing in the first quarter of this year. The Bureau of Land Management has planned more than 6,800 acres in western North Dakota and eastern Montana for auction in the coming months.

“So why are we here?” Traynor, who was nominated to his post by former President Donald Trump, asked the state’s attorneys. 

A pause in federal land auctions for the oil industry followed an executive order issued by Biden at the start of his presidency, which called for a moratorium on federal leasing while the Department of the Interior conducted an internal review of the process. A tone-setting move out of the gates, the moratorium was cheered by environmental groups seeking bold action on climate change and widely panned by advocates of the oil and gas industry.

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The hearing in North Dakota’s lawsuit comes seven months after the oil industry notched an early win when a Louisiana judge issued a preliminary injunction blocking Biden’s executive order. The Biden administration has appealed that ruling.

In total, fifteen states, including Wyoming, Montana and Louisiana, have sued the Biden administration over its restrictions on oil leasing on federal lands. While many of those states joined the Louisiana lawsuit in March, North Dakota opted to chart its own course with a solo challenge to the Democratic administration policy.

North Dakota Special Assistant Attorney General Paul Seby told the judge the decision to reopen oil lease sales doesn’t let the federal government off the hook for previous cancellations, arguing that the federal agency still has not acknowledged its legal duty to hold the auctions. The Department of the Interior does not have the authority to “just stop” lease sales, Seby said, adding “there’s no certainty” that sales will continue “until it happens.”

In an initial filing last year, North Dakota argued two canceled 2021 lease sales cost the state $82 million .

U.S. Department of Justice attorney Michael Sawyer argued Wednesday that the federal agency issued the pause in order to review its compliance with a key environmental law. He also noted the upcoming lease sale in North Dakota is much larger than recent lease sales under the Trump administration. The Department of Interior is offering 15 parcels of land for sale in North Dakota in the first quarter of 2022, federal attorneys said in court filings, compared to just one in the first five quarters of the Trump presidency.

This makes it “all the more extraordinary” that North Dakota is asking the court to compel the federal government to do something it is already proposing to do, Sawyer said. Among the parcels slated for auction in the next few months is some of the land that was under consideration for leasing at the outset of last year, the attorney said.

Though North Dakota has relatively little federal land compared to most other western states, the public tracts are concentrated in the western third of the state, overlapping with the heart of oil country. In recent years, that region has seen frequent clashes between oil producers seeking to tap reserves outside the Bakken formation's core, and environmental groups urging stronger protections for treasured natural areas in the watershed of the Missouri River and around Theodore Roosevelt National Park.

Since North Dakota filed its lawsuit last July, several environmental groups looking to protect North Dakota’s public lands against more industry development have intervened in the case, including the Sierra Club, the Center for Biological Diversity, the Western Organization of Resources Councils and the Dakota Resource Council.

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The Bureau of Land Management, which is overseen by the Department of the Interior, has not yet announced a date for the first court auction.

Traynor took the case under advisement Wednesday and said he would issue a verdict later.

Readers can reach Forum reporter Adam Willis, a Report for America corps member, at awillis@forumcomm.com .

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