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Northern District Court orders oil and gas production can resume

An opinion in the Hayes II case delivered a victory to the Osage Minerals Estate last month when it said that halting oil and gas production wasn’t the right option despite the U.S. government violating a previous environmental order.

The U.S. District Court for the Northern District of Oklahoma issued a decision resolving all remaining issues in Hayes v. Haaland case.

The ruling, issued May 1, brings the Hayes II case to a close after more than 10 years of litigation.

Osage Minerals Council Chairman Everett Waller said the ruling was a significant victory.

“These well-funded surface owners are trying to shut down our remaining oil and gas production that puts food on our table and pays the heat bill. The Council will always fight to protect our interests,” Waller said in a press statement.

The suit was brought on behalf of Paul Hayes, who owned 475 acres of surface land in Osage County. In 2012, Chaparral Energy and the OMC entered into a mining lease beneath his property. In 2013, another lease agreement was made between the OMC and Chaparral. Both leases were approved without the Bureau of Indian Affairs performing a National Environmental Policy Act (NEPA) analysis (Leasing PEA).

Finally, in 2014 the Bureau performed a Leasing Programmatic Environmental Assessment and issued a Finding of No Significant Impact (FONSI).

Two years later Hayes went to court to get the wells shut down because he believed there wasn’t a thorough analysis done by the BIA under NEPA. The court then ruled in the surface owner’s favor saying the BIA had failed to comply with NEPA.

The decision before the court was whether it is appropriate to shut down oil and gas wells permitted in 2012 and 2014 and issue an injunction. Last month, they ruled in favor of the Osage Minerals Council and the United States. The ruling could have affected oil and gas production reservation-wide because of the NEPA regulations the BIA is operating under.

The BIA will have to go back and do more of an environmental analysis, however, production can continue.

“…the court finds that the appropriate remedy is to remand the approval of the Leasing PEA and the FONSI, as well as the decision to approve the two leases at issue here, to the BIA without vacatur. Further, the court finds that an injunction is inappropriate,” wrote Judge Jane A. Restani for the Northern District of Oklahoma.

Judge Restani said issuing an injunction would impact the economy and risk damaging the reservoir and would have, “no impact upon the BIA’s ability to comply with NEPA.”

The court found that the surface owners didn’t provide enough evidence to convince the judge there would be significant environmental harm.

“Here, there is no evidence of environmental harm, just the risk of such with no evidence to indicate that the risk is particularly high or imminent … however, there would be economic and potentially environmental harm if the court were to issue an injunction to shut in the wells,” Judge Restani wrote.

Originally, the Minerals Council was not aware of this case until recently and argued that they needed to be included and that the surface owners named in the case – David P. Hayes for the Paul B. Hayes Family Trust were violating the sovereignty of the Osage Minerals Council and their managerial role in the oil and gas estate.

The OMC is now working with the BIA to come up with a plan to resolve permitting issues as soon as possible.

The surface owners can appeal the decision 60 days after the May 1 ruling was issued.


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Allison Herrera
Allison Herrera
Title: Freelance Reporter
Languages spoken: English

Allison Herrera is a radio and print journalist who's worked for PRX's The World, Colorado Public Radio as the climate and environment editor and as a freelance reporter for High Country News’ Indigenous Affairs Desk.

Herrera recently worked on Bloomberg and iHeart Media's In Trust with Rachel Adams-Heard, an investigative podcast about Osage Headrights.

She currently works for KOSU as their Indigenous Affairs Reporter. Herrera’s Native ties are from her Xolon Salinan tribal heritage.

In her free time, she likes buying fancy earrings, running and spending time with her daughter.


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