Forest Service officials have  allowed energy developers undo influence during the development of an environmental study to determine whether to allow oil and gas drilling on 44,700 acres in the Wyoming Range, according to Gov. Dave Freudenthal.

Freudenthal called a memorandum of understanding between Stanley Energy, Inc. and the Bridger-Teton National Forest “extremely suspect” in an April 21 letter to Harv Forsgren, regional forester for the Forest Service Intermountain Region. Freudenthal’s letter comes after Bureau of Land Management officials “expressed concern” about the arrangement to Intermountain Region officials last week, according to Forest Service officials.

The controversy comes before an April 28 deadline for the public to send comments on the scoping portion of the draft supplemental environmental impact statement.

The agreement in question allows Stanley officials to respond to public comments, keeps correspondence between the national forest and Stanley private, forces the forest to consider alternatives proposed by Stanley, and in return the company will pay for an independent contractor to complete the supplemental environmental impact statement that will decide if the leases can be developed. Such deep involvement is not typical in the review process, a critic said.

Freudenthal blasted the agreement saying, “it could be suggested that Stanley has purchased a favorable outcome.”

“In other words, the Forest Service has not only provided undue access through the MOU – it has opened the door for Stanley to dictate the details and the outcome,” Freudenthal wrote.

Bridger-Teton has since backpedaled and said it will restrict Stanley officials from certain discussions, but Freudenthal said those actions did not go far enough.

“I do not think that this will be enough to revive a tainted process, however, especially as long as Stanley is paying for the analysis, and the underlying MOU remains in place,” he wrote. “Stanley and its attorneys may have gone belowdecks, but this still looks like a ship built with their timber.”

Mark Toft, policy analyst for Freudenthal’s office, said the first meeting between representatives of the Forest Service and Stanley Energy occurred March 4 at the Holland and Hart LLP law office in Cheyenne, and there were conference calls with Stanley officials March 31 and April 14.

Holland and Hart is a law firm that represents Stanley Energy. State officials did not discover the existence of the MOU until after the call  April 14, according to Ryan Lance, deputy chief of staff for the governor.

Lance characterized the memo as being suspiciously favorable toward the energy company.

“Though the Forest Service is the deciding agency, there is a whole lot of other language in there that puts that into question,” Lance said.

In his letter, the governor complained that the Forest Service allowed Stanley representatives “to direct much of the conversation,” during the meeting and phone calls.

“They were not only hosting the meeting and pouring the coffee,” said Toft, “they kept bringing the conversation back to the subject of a time line and making sure the project, in our mind, was going to be on an expedited track.”



Sidebar conversations

Toft also said he felt that Stanley officials were withholding information about the methods that would be used to analyze the air quality impacts of leasing.

“They also brought the subject back to air quality frequently and that was part of our frustration,” Toft said. “There were sidebar conversations about air quality that we weren’t invited to.”

There was a second meeting scheduled for the Holland and Hart offices for Monday that has been canceled, Toft said.

Lance said the situation is very different from recent supplemental analyses for existing fields. Operators that owned leases in the Jonah Field and Pinedale Anticline paid when they wanted those plans updated. Stanley has bid on the leases in question and if the company can get the supplemental environmental impact statement approved, then it will gain the right to develop those leases.

“When they [the Forest Service officials] have the ability through the IBLA decision to ultimately say we are not going to lease these parcels, we think the Forest Service should be paying for and controlling the whole analysis,” Lance said. “The MOU and the arrangement for Stanley to pay for it puts that in significant question.”

Lance said Freudenthal would like to see one of a few outcomes. One would be to abolish the MOU and start the analysis over. Another would be to wait until the Bridger-Teton National Forest finishes revising its Forest Plan, and a third would be to await the outcome of legislation introduced by U.S. Sen. John Barrasso, R-Wyo., to prohibit further leasing in the Wyoming Range.

Even if the Forest Service agrees to start over, Lance said state officials are uneasy about the perceived relationship between Stanley and the Forest Service.

“It is sort of the poisoned well,” he said. “Once it is poisoned you don’t drink from it – that is our view of this.

“The governor believes this needs to be a very deliberate, transparent process,” he said. “The Forest Service has a heck of a hill to climb to show they are willing to preserve that type of process.”

At this point, Freudenthal does not want to completely withdraw the state from the analysis, but he did not rule it out in the future.

“That is certainly a possible avenue,” Lance said. “The governor has directed both of us to continue forward and submit scoping comments later on this week and preserve our legal standing relative to the process, but from that point forward I am not sure exactly what we will do.”

Erin O’Connor, spokeswoman for the Intermountain Region office, said Stanley Energy and Bridger-Teton National Forest had participated in conference calls that BLM officials said were inappropriate.

“That will no longer happen,” she said. “When the cooperating agencies expressed concern about Stanley Energy, the Bridger-Teton National Forest took immediate and decisive action to limit Stanley Energy’s involvement.”

Despite Freudenthal’s request for either a new process or a delay to allow time for the Forest Plan or Barrasso’s legislation, O’Connor said the  supplemental environmental impact statement will continue to move forward.

“There have been no internal discussions that would lead me to believe that we are starting over at this point,” she said, explaining that the process is still in the early stages. “We’re still in the initial scoping process. The analysis has yet to start.”

O’Connor defended Stan-ley’s involvement in paying for and selecting the outside contractor to conduct the analysis.

“They get to make a recommendation,” she said. “The decision resides with the appropriate Forest Service official. Stanley Energy recommended a contractor and the Forest selected a different contractor.

“The Forest Service retains sole responsibility for the completion of this process,” O’Connor continued. “It is not uncommon for proponents to pay for the environmental analysis.”

Further, even though the leases were contested by the Interior Board of Land Appeals, O’Connor said Stanley Energy has a “vested interest in assuring a timely analysis.”

Peter Aengst, deputy regional director of the Wilderness Society’s Bozeman office, said he has seen the Forest Service allow companies to pay for an environmental impact statement but said, “in all those cases the agency sets up a fire wall so that the vested interest doesn’t have direct influence and access to every aspect of the EIS process. In 15 years of looking at agency EISs, I have never seen anything like this.

“Not only is Stanley paying for the EIS, but they got Forest Service to sign an MOU that gives them access and influence into the design and potentially the outcome of the EIS,” Aengst continued. “I think the governor’s letter was right on.”  



Distrust continues

Aengst said Stanley Energy doesn’t have any standing to negotiate an MOU with the Forest Service, and the appearance of impropriety sows more distrust between the public and the Forest Service.

“The public was already kind of cynical and disappointed with the long history of the Wyoming Range,” he said. “They feel like one arm of government is working against them. This smells bad. This looks bad. The first meetings they had were at the Holland and Hart offices.”

Tom Reed, spokesman for Sportsmen for the Wyoming Range, agreed that the EIS process is tainted.

“To me, it excludes the public from the process,” he said. “It really seems inappropriate. It’s going to be hard to trust them as they move forward. The proper thing to do is put a hold on this process and redo it. It really kind of undermines the public trust when you have one entity taking advantage of the process.”

Reed called on Barrasso to step in and begin an investigation.

“I would like to see Senator Barrasso get into this,” he said. “We need some accountability from the federal government on this.”

Barrasso spokesman Greg Keeley said the senator had not seen Freudenthal’s letter until Tuesday afternoon and was still investigating the issue.

Bridger-Teton Forest officials announced the supplemental environmental impact statement in late January and hope to complete the document by next spring. The announcement came as legislation that would allow the buyout of Wyoming Range leases remains stuck in the U.S. Senate Committee on Energy and Natural Resources. The late U.S. Sen. Craig Thomas conceived the bill and Barrasso introduced the Wyoming Range Legacy Act of 2007 late last year.

The bill would protect more than 1.2 million acres of the range from future leasing and would allow existing leases to be bought back and the land preserved.

The Wyoming Outdoor Council, The Wilderness Society and the Greater Yellowstone Coalition protested several lease sales starting in December 2005, saying the Bureau of Land Management ignored possible adverse effects of energy development on the 44,720 acres to the Canada lynx and air quality that should have been considered in the National Environmental Policy Act analysis. The Canada lynx is protected under the Endangered Species Act.

In May 2006, the Interior Board of Land Appeals denied a Bureau of Land Management motion to dismiss the case, and in June of 2006 ruled that the BLM’s analysis was inadequate.

Stanley Energy, Bridger-Teton National Forest and the Wyoming BLM office did not return calls for comment.