Judge reinstates holdout oil lease on Blackfeet land

(Reuters) - A federal judge has reinstated an oil and gas lease and drilling permit issued four decades ago on land in northwestern Montana considered sacred to the Blackfeet Nation, calling the years of “never-ending” delays “Kafkaesque.”

The lease owned by Louisiana-based Solenex LLC sits on a tract of land known as Badger-Two Medicine, near the Blackfeet Reservation. It was canceled in 2016 by the Obama administration after appeals from the Blackfeet Nation and environmental groups, who said original reviews of the lease sale and drilling permit violated the National Environmental Policy Act and the National Historic Preservation Act.

U.S. District Judge Richard Leon said Friday it was clear, however, that the government originally took the required hard look at environmental impacts as dictated by NEPA, and that there was at least some effort to coordinate its review in light of the historic and cultural significance of the area.

Leon said the Interior Department lacked the authority to administratively cancel an otherwise valid lease, and that even a legally questionable lease can't be invalidated years after the fact, since the government had repeatedly affirmed the decision during that time.

Leasing in Badger-Two Medicine has remained contentious since Solenex's lease for 6,200 acres was issued in 1982. Leases in the area were stayed by the federal government in 1993 while Congress considered a law that would've closed the area to fossil fuel exploration, but was never passed.

In 2002, the Forest Service formally recognized the lands as having traditional cultural importance, spurring further delay.

Other leaseholders in the area have since relinquished their rights, and received reimbursement or refunds from the Interior Department, leaving Solenex as the only company seeking to maintain that interest.

The company is represented by nonprofit law firm Mountain States Legal Foundation, which says it represents clients at "zero legal cost." As friends of the court, Mountain States backed the successful challenge to the Environmental Protection Agency's authority to regulate power plant emissions in West Virginia v. EPA at the Supreme Court.

The Friday order was panned by John Murray, a Blackfeet Tribal Historic Preservation Officer who described the judge’s backing of the 6,200-acre lease as "more of the same from people who refuse to consult with the Blackfeet Nation about the industrialization of our last cultural refuge,” in a statement.

Solenex didn't immediately respond to a request for comment Monday. An Interior Department spokesperson declined to comment.

The case is Solenex LLC v Haaland, U.S. District Court for the District of Columbia, No. 1:13-cv-00993.

For Solenex: David McDonald and Zhonette Brown of Mountain States Legal Foundation

For the Interior Department: Clare Boronow, Marissa Piropato and Arwyn Carroll of the U.S. Department of Justice

For the tribes and conservation groups: Timothy Preso of Earthjustice

Our Standards: The Thomson Reuters Trust Principles.