Interior Says No To Innovative
Plan Offered By Industry, Ecos

CHEYENNE, Wyo. — Industry and environmental groups alike favor it, but a proposal developed by the Green River Basin Advisory Council that would reward oil and gas producers who exceed federal environmental mitigation standards has been rejected by the Clinton Interior Department.

The department lacks the statutory authority to grant the broad royalty credit that the committee had been advocating in its "eco-royalty" proposal, claimed Interior Solicitor John Leshy.

Leshy also contended that the council failed to demonstrate that royalty relief would serve any of the purposes set out in the Mineral Leasing Act.

"The Mineral Leasing Act has a quite clear standard with some clear criteria you have to meet to get relief," Leshy said. "And that makes it very difficult — practically impossible, frankly — to have a broad-based standard such as the committee was recommending.

"If the proposal is deemed desirable as a matter of policy, legislation would be necessary to authorize it," he concluded.

Despite the rejection, WOC Executive Director Tom Throop said he remains optimistic that some form of eco-royalty can satisfy the conditions imposed by Interior.

And Tom Wiblemo, Rep. Barbara Cubin's press secretary, said the congresswoman — chair of the House Resources Subcommittee on Energy and Mineral Resources — wants to move forward with an Oct. 9 hearing to examine the opinion and its implications for future proposals.

"We want to use it to explore ways to overcome the legal barriers identified by the solicitor's opinion," Wiblemo said.

The GRBAC, made up of representatives from the oil and gas industry, environmental groups and government agencies, was created to look at ways to allow natural gas development in southwestern Wyoming while protecting the environment.

However, the council dissolved when its charter expired in the spring, taking with it the hope for compromise in conflicts over the consequences of oil and gas development.

The GRBAC's eco-royalty program would have enabled companies to deduct the cost of certain environmental safeguards from the royalties they pay the federal government.

Terry Belton, a GRBAC member who worked for Texaco Production in Denver, said the oil and gas industry will not give up on the search for a royalty relief proposal that is acceptable to all sides.

"I suspect that the industry is going to want to do some independent research on this, not just to assume that the solicitor is correct," he said. "That hasn't begun yet to my knowledge, but I believe it's warranted."