Are North Fork Oil Leases Hindering Montana’s Transboundary Argument?

By Beacon Staff

During Interior Secretary Ken Salazar’s Aug. 11 visit to the North Fork of the Flathead River, he heard from members of various local conservation groups about ways to discourage the development of coalmines and gas drilling in British Columbia, north of Glacier National Park.

But when Dave Hadden of the Flathead Coalition spoke to Salazar, he wondered out loud whether there were measures the United States could take on its own territory to help the cause of preserving wildlife and water quality in the Flathead.

“What can we do south of the border to secure further protection, to demonstrate to the Canadians that we’re doing what we say we want them to do?” Hadden asked Salazar, along with Sens. Max Baucus and Jon Tester. “There are proposals for Glacier National Park, there are dormant oil and gas leases in the North Fork, there are lands on the North Fork against the Canadian border that the Forest Service has recommended for Wilderness – these are the kinds of proactive things that we can do and assert our conservation vision for the watershed.”

One of the issues Hadden mentioned – the existence of decades-old privately owned dormant oil and gas leases along the U.S. North Fork – tends to be one of the oft-overlooked aspects of the debate over natural resource development in the Flathead watershed on either side of the border. But local conservation groups seem to understand that Montana would have a firmer stance from which to discourage coal and gas development in B.C. if it didn’t also have vast swathes of land leased for development down here, much of which covers the Whitefish Range and borders the North Fork.

In February 2008, the Flathead Basin Commission passed a resolution urging Baucus and Tester to find a way to retire the more than 450 oil and gas leases covering nearly a million acres in the Flathead National Forest. Of those leases, 103 are in the North Fork area, according to Denise Germann, public affairs director for the Flathead National Forest.

Since that resolution, little has happened with the suspended leases, and by all accounts their existence is far from the most pressing issue facing the Flathead.

“There’s no demand, there is no need, nobody is asking for it,” Germann said. “It’s not a priority for the forest.”

But skiers and snowboarders on Big Mountain might be surprised to know that the land underneath the terrain they’re descending is leased by ConocoPhillips and the Oklahoma-based Devon Energy Corporation. Any business that did decide it wanted to explore for oil and gas would first have to go through the National Environmental Policy Act (NEPA) and would likely face stiff opposition from conservation groups and the wider public.

The leases were sold off in the late 1970s and 1980s when oil prices shot up due to an embargo in the Middle East and the government turned to domestic resource exploration.

“There was just this orgy of leasing,” recalled Tom France, executive director for the National Wildlife Federation’s regional office in Missoula.

France was one of the attorneys who, along with James Conner of Kalispell and the Madison-Gallatin Alliance, sued Robert Burford, director of the Bureau of Land Management at the time, over roughly 700 leases issued in the Flathead and Gallatin National Forests in 1981, because the leases were sold without an Environmental Impact Statement that took into account the impacts on endangered species.

The BLM suspended the leases after Conner won the lower court decision, and since the Ninth Circuit Court of Appeals upheld that ruling in 1988, a precedent was set that government agencies must undertake Environmental Impact Statements before issuing leases – not after.

“It was a great outcome,” France said. “That principle has been applied to other decision-making processes that the government has.”

The decision also left the leases in limbo – sold off, but unable to be developed without an EIS – nor has there been much pressure by developers to move forward with their leases, which leads France and others to conclude that retiring the leases makes sense.

“It couldn’t hurt as far as showing some good faith with the British Columbians,” he said. “I don’t think many of the leaseholders would object too much.”

But the value of the leases is unclear. While some geologic studies have shown the areas encompassing the North Fork to be rich in oil, gas and coal, a controversial wildcat 9,000-foot well drilled on private land west of Glacier Park by Cenex struck out in 1989, and there has been little activity since.

The leases in the North Fork are owned by companies including ConocoPhillips, Louisiana-based Allen & Kirmse Ltd., Texas-based XTO Energy Inc. and others.

It’s also unclear how these leases could be retired, but that would likely be handled through federal legislation that provides compensation to the leaseholders in the form of leases elsewhere or monetarily.

Some conservationists interviewed say there isn’t an equivalent between the lands ripe for development in British Columbia and leases in the Flathead that are suspended, but that doesn’t mean those leases shouldn’t be retired – at least according to Will Hammerquist of the National Parks Conservation Association’s Glacier office.

“The biggest reason around why these leases should be retired is because that type of land use isn’t compatible with the traditional use of our public lands,” Hammerquist said. “We like the way our national forests are, and we don’t think gas extraction is a good use for the North Fork.”

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