North Fork ‘whodunit’ solved (sort of)
Nominators’ names released, resulting in more questions
Originally published 2013-04-18
The suspense is over.
The much-speculated and sometimes-cursed identities of the companies behind the controversial nominations of North Fork Valley lands for oil and gas leasing have finally been revealed — sort of.
The Bureau of Land Management (BLM) announced this week that the agency would not be pursuing an appeal of federal court Judge Richard P. Matsch’s February ruling that sided with two environmental organizations in a Freedom of Information Act (FOIA) lawsuit.
Instead, the BLM opted to release the names of the nominators.
But it wasn’t exactly what Paonia-based Citizens for a Healthy Community (CHC) or the Western Environmental Law Center (WELC) — the two organizations that joined forces in the suit — were expecting.
Rather than a smoking gun, the BLM’s announcement shows that not always do companies nominate lands themselves. Sometimes, they hire firms that specialize in such practices to do that work for them.
In this case, Contex Energy and Baseline Minerals nominated the parcels in question, it appears, on behalf of clients whose names they won’t — nor are required — to release.
That begs a whole new series of questions. The obvious is: Who’s really behind the nominations?
But digging deeper, will Judge Matsch’s ruling — which was heralded as a precedent-setting victory in the quest to lift the veil of secrecy surrounding the nomination of federal lands for oil and gas leasing — now simply force more companies to employ firms like Contex and Baseline to do their nominating?
“We’ve pierced the first veil of secrecy and need to keep the pressure up,” said CHC Director Jim Ramey. “That’s a bigger fish to fry than we’re able to do with this lawsuit.”
Federal oil and gas leases are issued pursuant to competitive bidding at a public sale, which is the final step in a process that starts with the submission of an expression of interest, or nomination. Until now, the names of nominators have been kept under wraps until after a lease sale — during which basically any company or individual can bid on a parcel — is complete.
Agency officials have long maintained that revealing the names of the nominators would give competitors an unfair advantage, and releasing the names would compromise the public’s ability to get a fair return for lands that are leased.
The BLM announced in December 2011 that 30,000 acres of public lands in the North Fork had been nominated for oil and gas leasing and development. In response, CHC filed a FOIA request for the names of the nominators. BLM officials declined to turn over the information, and speculation erupted about who may be behind the nominations.
The BLM this week identified Gunnison Energy Corp. as a third nominator of a small portion of the acreage in question. However, company leaders voluntarily disclosed that fact last year.
CHC and WELC eventually sued the BLM, though to date — and following significant public outcry, due to the sensitive location of many of the nominations — the parcels in question have been deferred from leasing.
Yet, in February, Judge Matsch ruled that the public has a right to know the names of companies seeking to drill prior to a lease sale, requiring the federal agency to turn over names in the case of the North Fork.
The Denver-based Center for Western Priorities in a prepared statement this week denounced the BLM’s identification of the nominators, calling Contex and Baseline “shadow bidders” that serve to maintain secrecy in the leasing process.
Baseline has been known to engage in speculation in the past — scooping up parcels only to be sold at a higher price in the future.
But in the case of the controversial North Fork leases, President Joe Thames said his company nominated the parcels on behalf of “one of our clients.” He indicated that Baseline has nominated “thousands” of parcels on behalf of drilling companies over the years.
“To me, it makes no difference whether my name get revealed or not,” he said, adding that some of Baseline’s clients, on the other hand, are in stiff competition with other drilling companies and attempt to keep their identities under wraps to maintain an upper hand. “They all feel like they know a little bit more than the next guy or they think that one of them knows more than another. They kind of tend to want to follow one another around sometimes.”
But Thames posed the possibility of an unintended consequence from Judge Matsch’s ruling — that more companies will in the future simply hire firms like Baseline to do their nominating, so that their activity and interests can be protected from use by a competitor.
“If one of our clients doesn’t want to be revealed, they’re going to hire us to make the expression of interest,” he said.
CHC’s Ramey hopes that as a result of the recent ruling, a new set of rules will be adopted by the BLM that bars such an outcome. In the meantime, CHC and others are urging oil and gas companies to seek leasing publicly owned minerals transparently, by nominating the lands themselves.
“That’s an ideal world in our point of view,” he said.
(Will Shoemaker can be contacted at 970.641.1414 or firstname.lastname@example.org)