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Obama Drilling Rules Thrown Out By Federal Judge

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US President Barack Obama speaks on fuel efficiency standards for model years 2017-2025 cars and light trucks July 29, 2011 at the Walter E. Washington Convention Center in Washington, DC. (MANDEL NGAN/AFP/Getty Images) | Getty

CHEYENNE, Wyo. -- A judge on Friday threw out Obama administration rules that sought to slow down expedited environmental review of oil and gas drilling on federal land.

U.S. District Judge Nancy Freudenthal ruled in favor of a petroleum industry group, the Western Energy Alliance, in its lawsuit against the federal government, including Interior Secretary Ken Salazar.

The ruling reinstates Bush-era expedited oil and gas drilling under provisions called categorical exclusions on federal lands nationwide, Freudenthal said.

The government argued that oil and gas companies had no case because they didn't show how the new rules, implemented by the U.S. Bureau of Land Management and U.S. Forest Service last year, had created delays and added to the cost of drilling.

Freudenthal rejected that argument.

"Western Energy has demonstrated through its members recognizable injury," she said. "Those injuries are supported by the administrative record."

An attorney for the government declined to comment but Kathleen Sgamma, director of government and public affairs for the Denver-based Western Energy Alliance, praised the ruling.

"She completely discounted the government's argument that the harm was speculative," Sgamma said of the judge.

The Energy Policy Act of 2005 allows the BLM and Forest Service to invoke categorical exclusions and skip new environmental review for drilling permits under certain circumstances.

The circumstances include instances where companies plan to disturb relatively little ground and environmental review already has been done for that area. A categorical exclusion also can be invoked when additional drilling is planned at a well pad where drilling has occurred within the previous five years.

Categorical exclusions were widely used throughout the West – especially in the gas boom states of Wyoming, Utah and New Mexico – until last year.

In Wyoming, the BLM invoked categorical exclusions for 87 percent of the new gas wells drilled in the Upper Green River Basin between 2007 and 2010. Those drilling permits added up: Close to 3,000 over those three years in the basin's Jonah Field and Pinedale Anticline gas fields.

The Jonah Field and Pinedale Anticline ranked fifth and sixth for gas production in the U.S. in 2009.

Federal land agencies adopted new rules for interpreting the Energy Policy Act last year in response to an environmentalist lawsuit over the use of categorical exclusions. The Western Energy Alliance sued over the new rules last fall.

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