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Reagan Era Lessee Fights Obama Officials’ Lease Cancellation

Sep 12, 2016 | by William Perry Pendley

DENVER, CO.  A Louisiana man issued a federal oil and gas lease in 1982, but denied the right to explore his property since first approval of his application for permit to drill (APD) in 1985, today urged a federal district court to hold unlawful and set aside the Obama administration’s cancellation of his 33-year-old lease and disapproval of his 23-year-old approved APD, which was suspended in 1993.  Mountain States Legal Foundation (MSLF) represents Sidney Longwell of Baton Rouge, whose company Solenex, LLC owns the Reagan-era lease, and which sued Secretary of the Interior Sally Jewell and Interior and Agriculture Department officials in federal district court in the District of Columbia in 2013.  The cancellation came on March 17, 2016, after nearly a year of district court hearings that were characterized by the refusal of federal officials and their attorneys to act on a timely basis.  In June of 2015, the judge called the government’s conduct, “Kafkaesque.”  In July of 2015, the district court ruled that the delay was illegal as a matter of law and demanded an expedited timetable for a decision.  The delay ended in a March 16, 2016, hearing when the court demanded a decision in 24 hours.

“In an administration known for its lawless and disrespect for constitutional guarantees and the provisions of federal statute, the actions taken by the Obama administration regarding our client’s lease and his APD shock the conscience,” said MSLF president, William Perry Pendley.  “The Secretary’s actions are ultra vires because she has no authority to cancel a lease issued in 1982, any authority she might have had was exercised unlawfully because our client has bona fide purchaser protection, her actions are barred by the passage of time and equitable estoppel, and despite her new position, the lease was not improperly issued in 1982.”

In June 1982, the Bureau of Land Management (BLM) issued Mr. Longwell a 6,247 acre oil and gas lease on federal land in northwestern Montana.  In 1983, Mr. Longwell assigned the lease to America Petrofina Company of Texas, which later became Fina Oil and Chemical Company.  In October 1983, Fina submitted an application for permit to drill near Hall Creek, approximately 2 miles south of U.S. Highway 2 to evaluate the natural gas potential of that portion of the Overthrust Belt.

After extensive review pursuant to the National Environmental Policy Act (NEPA), amidst appeals, and following a ruling by the Interior Board of Land Appeals (IBLM), in consultation with the U.S. Forest Service, the BLM approved the APD in 1985, 1987, 1991, and finally in January 1993.

In June 1993, the Secretary of the Interior suspended activity on the lease purportedly to permit Congress to act.  In 1994 and 1995 the Secretary extended the suspension awaiting congressional action.  Then, in 1996, the Secretary continued the suspension, purportedly to comply with the National Historic Preservation Act.  In 1997, the Secretary extended that suspension and finally, in 1998, continued it indefinitely. 

In 1999, FINA assigned its rights under the approved APD and lease back to Mr. Longwell.  In July 2004, he assigned his rights to Solenex, which, in May 2013, asked that the suspension be lifted; the request was denied.

Mountain States Legal Foundation, created in 1977, is a nonprofit, public-interest legal foundation dedicated to individual liberty, the right to own and use property, limited and ethical government, and the free enterprise system.  Its offices are in suburban Denver, Colorado.


For more information:  Solenex, LLC v. Jewell

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