Welcome to The New Interior, a periodic update from Steptoe & Johnson LLP to keep you informed of coming changes at the Department of Interior, and for related matters on Capitol Hill and elsewhere with a new administration taking charge in Washington, DC.  We intend to bring you the very latest on anticipated moves by the Obama Administration and in the 111^th Congress over the next several months, as a new direction takes shape for Interior-related positions and policies.

If you would like to speak with a Steptoe attorney about our Interior practice, please reply to this email or contact Tom Collier (202.429.6242 or tcollier@steptoe.com) or Jody Cummings (202.429.8096 or jcummings@steptoe.com). 

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Appointments Buzz

A couple of key Interior nominations have just announced by the President, with one more likely to follow.

• Sam Hamilton has been nominated for Director of the Fish and Wildlife Service.  Hamilton has worked for FWS since 1979, and has been Regional Director for the Southeast Region since 1997.

• Robert Abbey is the President’s nominee to head the Bureau of Land Management.  Abbey is currently partner at Abbey - Stubbs - Ford, LLC, where he is a private consultant specializing in western land and resource strategies.  Prior to this experience, Abbey was the Nevada State Director for BLM.  He has also held BLM positions in Colorado and Mississippi.

• We continue to hear that Jon Jarvis will be the nominee for National Park Service Director.  Jarvis is currently the director of the NPS Pacific West Region.

In other news, John Tubbs has been named Deputy Assistant Secretary for Water and Science.  The appointment does not require Senate confirmation.  Tubbs will advise and assist the Assistant Secretary for Water and Science, who oversees Interior’s Bureau of Reclamation, U.S. Geological Survey and the Central Utah Project Completion Act Office. Since November 2006, Tubbs has been administrator of the Montana Department of Natural Resources and Conservation Water Resources Division.  He more than 20 years of experience with that Montana agency.

Finally, Hillary Tompkins’ confirmation as Interior Solicitor remains subject to a Senate hold.  The hold has been placed on behalf of an unnamed Senate member.  Tompkins’ confirmation was previously blocked by Sen. Bob Bennett (R-UT), but that hold was lifted following communications with Secretary Salazar about Interior’s authority to establish new wilderness study areas in Utah.  When Sen. Jeff Bingaman (D-NM) asked for unanimous consent last week for Tompkins’ confirmation, Minority Leader Mitch McConnell (R-KY) objected on behalf of an anonymous member.  The timetable for Tompkins’ confirmation is far from clear at this point.

Interior Sends Congress Recommendations for Carbon Capture Program

Last week, Secretary Salazar announced that he had sent to the House Natural Resources Committee and the Senate Energy and Natural Resources his recommendations for a national program to help reduce greenhouse gases by selecting appropriate underground geological formations on public lands to inject and store carbon dioxide emissions from coal-fired power plants and other carbon-dioxide producing facilities.  The report suggests criteria for identifying potential sites for geological carbon sequestration and a proposed regulatory framework for leasing these public lands. It also discusses environmental protection, public participation, rights-of-way and federal liability, among other key issues for such a strategy.

The report suggests that a proposed regulatory framework must recognize carbon dioxide as a commodity, resource, contaminant, waste, or pollutant. Unlike most other resources that are managed, carbon dioxide is a material that is either being stored for disposal or is extracted for use.  The report notes that carbon sequestration may potentially conflict with other land uses, including existing and future mines, oil and gas fields, coal resources, geothermal fields, and drinking water sources. For example, sequestration in a formation would limit all future possibility of extracting minerals from the formation without some risk of venting the captured carbon dioxide.  The report indicates that a critical issue for evaluating storage capacity is the integrity and effectiveness of geologic formations for sealing carbon dioxide underground, preventing its release into underground sources of drinking water, mineral resources or the atmosphere. The report recommends that candidate sites must have sufficient capacity to accept the volume of carbon dioxide expected for the life of the sequestration project and the geologic structure to ensure long-term containment of the carbon dioxide.

Carbon sequestration could also have potential impacts on other surface land uses and programs such as recreation, grazing, cultural resource protection, and community growth and development.  Secretary Salazar has stated that these impacts must be addressed.  The Secretary also recommends that a proposed statutory and regulatory framework recognize the long-term liability of any permitting decision to sequester carbon dioxide and the required commitment for stewardship of facilities over an extended period of time. The scope of liability and term of stewardship will be among the longest ever attempted, potentially lasting up to thousands of years or more. This may be a potential limiting factor for siting, transportation, processing, and storage on federal lands when considering BLM’s multiple-use mission for long-term management of the public lands.

The Secretary indicates that additional investment in research will be necessary as effective risk management of geologic sequestration decision-making and regulation of consequent activity is limited by the current state-of-the-art of scientific assessment.  Sequestration complications may also be presented on split estate lands or lands where the surface is managed by other Federal agencies due to ownership issues of pore space and limitations that may need to be placed on surface and subsurface uses to ensure integrity of storage.

A full copy of Interior’s report can be found here.

Public Workshops on OCS Renewable Energy Program Get Underway, FWS and MMS Sign MOU for Bird Protection

Interior has announced intentions to host 12 public workshops this month to discuss the newly-issued regulatory program for OCS renewable energy development that we reported on previously.  The workshops kicked off late last week in Washington, D.C.  The other 11 will be held in Norfolk, Virginia (June 8); Boston, Massachusetts (June 9); New Orleans, Louisiana (June 9); New York, New York (June 10); Ft. Lauderdale, Florida (June 10); Monmouth, New Jersey (June 11); Savannah, Georgia (June 11); Rockport, Maine (June 15); Seattle, Washington (June 24); Portland, Oregon (June 25); and San Francisco, California (June 26).  Interior’s Minerals Management Service is organizing and conducting the workshops.  Each will start with a detailed presentation from MMS, followed by a question and answer session with attendees.  All workshops are open to the public and anyone interested in offshore renewable energy production is encouraged to participate.

As we previously reported, the Final Framework for Renewable Energy Development on the OCS establishes a process for granting leases, easements, and rights-of-way for offshore renewable energy projects as well as methods for sharing revenues generated from OCS renewable energy projects with adjacent coastal States.  The program becomes effective June 29, 2009.

At last week’s workshop in Washington, Secretary Salazar announced that MMS and the U.S. Fish and Wildlife Service have signed an agreement to strengthen Interior’s efforts to protect and conserve migratory bird species during offshore renewable energy development.  The MOU purports to fulfill the requirements of Executive Order 13186, which directed executive departments and agencies to take additional actions to strengthen their efforts to protect and conserve species under the Migratory Bird Treaty Act. 

Draft Bill Would Overhaul Interior’s Oil and Gas Leasing Program

House Natural Resources Committee Chairman Nick Rahall (D-WV) is floating a draft bill that would overhaul the Interior Department's oil and gas leasing program.  Majority staff for the Committee indicates that the bill – The Federal Lands and Resources Energy Development Act of 2009 – would make several significant changes to current law. 

The legislation would consolidate federal energy and mineral leasing programs within one bureau within Interior, seeking to provide greater efficiencies by combining lease sales, inspection, enforcement and revenue collection into one entity.  The bill would establish the Office of Federal Energy and Minerals Leasing, combining oil and gas, wind, wave and solar programs that are now operated out of MMS and BLM. 

The bill would create regional ocean councils and onshore state-wide teams.  OCS Regional Planning Councils would be established for the Atlantic, Pacific, Gulf of Mexico and Alaska regions, which would prepare marine spatial Strategic Plans to guide OCS energy development.  These Strategic Plans would then be incorporated into the 5-year OCS leasing plans required under the OCS Lands Act.  Further, onshore federal-state-stakeholder teams would develop comprehensive energy development plans for each public lands state that would guide federal land management and leasing decisions. The bill would also create federal leasing programs for wind, solar and uranium resources on public lands, with the intention of bringing multiple forms of energy development into one framework.

The legislation would raise the rates oil and gas companies pay to drill on public lands for the first time since the 1980s, increasing royalties from 12.5 percent to 18.75 percent.  It would also shorten drilling lease terms from 10 years to 5 years and require companies not actively using leases to pay a fee.  Other provisions include a requirement that new offshore leases meet a “no discharge” standard, in an effort to reduce ocean pollution caused by drilling. 

House Republicans Introduce Oil Shale Bill

Late last week, a handful of House Republicans, led by the Ranking Member of the Natural Resources Subcommittee on Energy and Minerals, Doug Lamborn (R-CO), introduced the PIONEER Act (The Protecting Investment in Oil shale the Next Generation of Environment, Energy, and Resource Security Act), H.R. 2540.  The bill looks to expand production of oil shale in the U.S.  Proponents of H.R. 2540 indicate that the bill would:

• Direct the Secretary of the Interior to issue additional Research, Development & Demonstration leases within 180 days after enactment of bids published on January 15, 2009.  This would reverse Secretary Salazar’s February 2009 decision to withdraw a proposed plan for expanded oil shale RD&D leases.

• Make permanent the commercial oil shale regulations published by Interior last November and apply them to all commercial leasing for the management of federally-owned oil shale.

• Give the Interior Secretary authority to temporarily reduce royalties and fees paid by oil producers in order to further incentivize and encourage energy development. 

The bill has been referred to the Subcommittee on Energy and Minerals for further consideration.

Lawsuits Challenge Obama Administration Decision on Wolf Listings

Last week, two lawsuits were filed challenging the Obama Administration April 2009 rule concerning protection for gray wolves under the Endangered Species Act.

In one action, several conservation groups filed suit in federal court in Montana challenging an April decision by the U.S. Fish and Wildlife Service to designate the northern Rocky Mountain gray wolf as a distinct population segment and then de-list it under the ESA.  The plaintiffs allege that the Administration’s April rule unlawfully de-listed a portion of the northern Rockies wolf population while retaining endangered status for wolves in Wyoming, failed to ensure that the northern Rockies wolf population exhibits genetic connectivity essential to its survival, and will allow the wolf population in Idaho and Montana to decline dramatically on the basis of outdated and inadequate wolf population recovery targets.  The suit comes less than a year after the same federal court invalidated a 2008 rule that limited protections for gray wolves in the northern Rockies.

With gray wolves remaining on the protected species list in Wyoming under the April rule, that state has filed its own federal suit challenging the FWS decision to keep gray wolves protected there.  The suit alleges that the FWS decision violates the Administrative Procedure Act and the ESA by rejecting Wyoming’s wolf management scheme as inadequate, and asks that the decision to not de-list Wyoming gray wolves be invalidated.  Wyoming also asks that if the court finds that the FWS decision did not violate the APA or ESA, that the federal government be forced to limit the Wyoming gray wolf population so that there are no more than 15 breeding pair of wolves in Wyoming each year.