Professional Documents
Culture Documents
Continental Resources 1 21-Cv-00034 DistND Feb23 2021
Continental Resources 1 21-Cv-00034 DistND Feb23 2021
VERIFIED COMPLAINT
seeking review of agency action under the Administrative Procedure Act, 5 U.S.C. §§ 701-706
1. Continental is a crude oil and natural gas exploration and production company.
2. Continental operates oil and gas leases throughout western North Dakota.
3. This action pertains to fifty Applications for Permit to Drill (“APDs”) that
Continental submitted in 2020 for wells on lands under the jurisdiction of Bureau of Land
Management (“BLM”) North Dakota Field Office in Dickinson. For these fifty APDs, BLM’s
responses were delayed by repeated software errors in BLM’s Automated Fluid Minerals
Support System 2 (“AFMSS 2”). But for those errors, BLM would have approved these fifty
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 2 of 14
APDs before January 20, 2021. Even with the errors, BLM would have approved the fifty APDs
by now, but for Secretarial Order 3395, see Attachment 1, withdrawing BLM’s delegation of
authority to approve them and reserving that authority to appointees of the new Administration.
4. The fifty APDs at issue are in five federal oil and gas units in Williams, Dunn,
and McKenzie counties. The units are named the Charolais South, the Harms, the LCU Foster,
the Flint Chips, and the Clear Creek units. For one of these five units, the Charolais South Unit,
5. For the Charolais South unit, the United States Forest Service (“USFS”) has
indicated it wishes Continental to complete the construction of the well pads, road, and utility
corridors before June 10, 2021, to minimize disturbance of wildlife, including the endangered
Dakota skipper butterfly. To meet the agency’s objective, Continental needs the BLM to issue
the thirteen APDs for the Charolais South unit by March 8, 2021. Continental has twice written
senior officials at the Department of the Interior (the “Department”), first the Acting Secretary
on February 10, 2021, and second the Acting Assistant Secretary – Land and Minerals
Management on February 16, 2021, both letters sent by electronic mail and received the same
6. Continental requests the Court order BLM to act on all fifty APDs, but
specifically seeks emergency relief for an order requiring immediate action on the thirteen APDs
-2-
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 3 of 14
Background
procedures and deadlines the Department must follow when reviewing APDs. The Department
has failed to process any of the fifty APDs in the time required by the Act.
8. The permits would have been approved by now in the normal course of business.
However, on January 20, 2021, Defendant Acting Secretary of the Interior de la Vega signed
9. Secretarial Order 3395 suspended the authority of the BLM to, among other
things, “issue any . . . permit to drill.” Attachment 1, § 3g. The Order reserved the power to
approve to the top nine Presidentially appointed officials in the Department. Id. § 4.
10. On February 10, 2021, Continental wrote the Acting Secretary, bringing to his
attention that he was required by law to address the fifty permits. The letter spelled out the
delays and the failings of the AFMSS 2. Because BLM was already beyond the time mandated
by statute for action, Continental requested the Acting Secretary’s prompt action. Attachment 2.
11. On February 12, 2021, Continental learned that the thirteen permits for the
Charolais South Unit had been proposed for approval under Secretarial Order 3395 and sent to
the Acting Secretary for action. The Acting Secretary then forwarded the permits to Laura
Daniel Davis, the Acting Assistant Secretary – Land and Minerals Management, for action.
Acting Assistant Secretary Davis is one of the nine officials identified in Secretarial Order 3395.
12. On February 16, 2021, Continental submitted a second letter, this time to Acting
Assistant Secretary Davis, emphasizing the time-sensitivity of the Charolais South permits and
-3-
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 4 of 14
13. One week later, as of the filing of this verified complaint, the Department has not
responded with respect to the Charolais South unit or to the other four units.
PARTIES
15. Defendant Scott de la Vega is the Acting Secretary of the United States
Department of the Interior. Acting Secretary Vega is the head of the United States Department of
17. This Court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1331 and
1361. The United States has waived its sovereign immunity under the APA, 5 U.S.C. § 702.
substantial portion of the events forming the basis of this action occurred within the State of
North Dakota and because the property that is the subject of the action is situated there.
FACTUAL ALLEGATIONS
19. The United States owns approximately 700 million subsurface acres of mineral
estate. The Mineral Leasing Act establishes the framework under which the Secretary of the
Interior leases and manages the development of these resources. The Secretary has delegated his
-4-
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 5 of 14
statutory responsibilities associated with the administration of the oil and gas leasing program to
the BLM.
20. Within the BLM, the Montana/Dakotas State Office administers the development
of oil and gas on federal lands within the State of North Dakota. The North Dakota Field Office
Office. For the Charolais South and Harms units, the USFS administers the surface estate. For
the Clear Creek, Flint Chips, and LCU Foster units, the surface estate is privately owned.
21. BLM is generally responsible for approving a project proponent’s APDs, whether
the federal government owns both the surface and the minerals or the minerals alone. Where the
surface is privately owned, BLM considers surface impacts under both the National
Environmental Policy Act (“NEPA”) and the Endangered Species Act (“ESA”). Where the
surface is federally owned, BLM also reviews the APDs for consistency with BLM-approved
Resource Management Plans or Forest Service Land and Resource Management Plans. The
environmental review includes an onsite inspection of the proposed well, access road, and
22. For federally owned surface, rather than undergoing environmental review on
each individual APD, proponents of oil and gas development have the option of submitting a
Development Plan provides information common to multiple planned wells, including drilling
plans, Surface Use Plans of Operations (“SUPOs”), and plans for future production. Master
Development Plans also include information on associated facilities (e.g., roads, pipelines, utility
-5-
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 6 of 14
corridors, and compressor stations). The Master Development Plan allows federal agencies to
conduct NEPA and other reviews on all the proposed activities at one time, rather than
performing well-by-well analyses when the APDs are submitted. For the Charolais South and
Harms units, on USFS lands, Continental prepared and joined in (with another operator) the
Antelope Master Development Plan. BLM’s internal guidance documents encourage the use of
Master Development Plans to more effectively manage federal lease development. See Bureau of
Land Mgmt., Instruction Mem. (“I.M.”) No. 2005-247 (Sept. 30, 2005) (“An EA or EIS prepared
for development of two or more oil, gas, or geothermal wells provides substantial time savings
over writing individual EAs or EISs for each well approval and generally results in improved
impact analysis.”).
23. Work on the Antelope Master Development Plan began in 2012. During its
preparation, the federal agencies undertook “formal” consultation with the United States Fish
and Wildlife Service under the ESA. That consultation identified the Dakota skipper butterfly as
at risk, and the Fish and Wildlife Service issued an “incidental take” permit prescribing
24. By April 2018, the agencies had completed an environmental assessment under
NEPA and determined that approval of the Antelope Master Development Plan was unlikely to
Impact” (“FONSI”). No administrative protest or judicial challenge was filed with respect to the
FONSI.
-6-
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 7 of 14
25. The Charolais South APDs will be drilled from two multi-well drilling pads, the
A and the B. See Attachment 4 (map). To the east lies another Continental multi-well pad, the
Brangus. Continental has received all needed permits for operations at the Brangus. An access
road north from a county road has been laid, as has its eastern fork to the Brangus pad. The
Brangus pad is being constructed. Conductor casing, the initial pipe that protects the near-
surface section of the wellbore, is being set for the Brangus wells with the goal of having
construction complete in advance of the Dakota skipper work stoppage period of June 10 through
July 25.
26. From the point where the access road forks, the access road to the A and B pads,
the pads themselves, and authorizations for pipelines and electric cable await approval from
27. Ordinarily, the presence of a sharp-tailed grouse lek within the area would cause
the USFS to restrict an operator’s activities during the period March 1 through June 15. Here,
however, USFS wildlife staff concluded Continental needed to take all steps to complete
construction quickly. More specifically, USFS concluded “due to the significant scope of the
proposed project, allowing construction to proceed during these dates (March 1 through June 15)
for two (2) years from when construction commences and within four (4) years from when the
permit is issued would greatly reduce impacts to Sharp-tailed grouse and other wildlife species ...
-7-
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 8 of 14
28. Construction has commenced. The first year of the two-year waiver for spring
construction is in place. The Department’s delay is, in the judgment of the USFS, adding to the
29. Further USFS requirements add to the risk of delay to Continental. Continental
may not begin drilling its Charolais wells until it has first constructed “all oil pipelines, gas
pipelines, saltwater pipelines and flowlines paralleling the access roads.” Id. at 2, ¶ 11.
Authorizations for these lines are held up on the Acting Assistant Secretary’s desk. As a result,
Continental cannot undertake construction of the access road north of the fork
30. Along the routes for the access roads to Charolais pads A and B, lack of approval
of the APDs has made it impractical even to set up the protective fencing needed for the Dakota
31. The list of tasks to be completed before June 10 is lengthy. In more or less the
following order, and simultaneously where possible, Continental must: (1) install the habitat
fencing; (2) construct the pad for the Central Tank Battery (shown on Attachment 4 as the
“CTB”) to receive production from the three well pads; (3) deliver pipe to the CTB for staging to
be used when the various lines are laid; (4) complete the Brangus road and well pad; (5) allow
access to Continental’s third-party vendor to lay the flow lines required to transport production
of emulsified oil, gas, and water from the Brangus pad to the CTB; (6) build the road and the B
pad for the nine Charolais South wells 7 through 15; (7) provide access to the midstream
companies Bridger Pipeline, LLC, Oneok, Inc., and Goodnight Midstream Bakken, LLC, to
install the equipment to move oil, gas, and produced water away from the project; (8) build the
access road and the A pad for the four Charolais South wells 3 through 6; and (9) allow access to
-8-
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 9 of 14
Continental’s third-party vendor to lay the flow lines from the Charolais South A and B pads to
32. The goal is to complete the construction phase before the June 10 halt for the
Dakota skipper. Drilling and completion activities would be scheduled to commence after
July 25.
33. In addition to the risk the Department’s delay poses to wildlife, Continental itself
faces unrecoverable economic losses from a delay that prevents completion of construction this
spring.
34. As is customary in the oil and gas business, Continental has to pay certain of its
vendors a “mobilization fee” to compensate the vendor for costs of staging equipment and crew
to be available on site when scheduled. Delay and uncertainty related to federal permitting has
caused a halt to the work and required contractors to leave the project prematurely, only to return
at a later date when permits are in hand. This delay will lead to Continental paying mobilization
fees twice, a loss that can be estimated to be between $20,000 to $150,000, depending on the
35. Further delay will postpone production. That postponement delays Continental’s
receipt of revenue from the thirteen Charolais South wells. Stated differently, further delay
36. If these delays continue and these several losses are incurred, Continental has no
-9-
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 10 of 14
37. For the Harms unit, Continental’s activities have been reviewed and approved
under the Antelope Master Development Plan. BLM and USFS have authorized the surface
disturbance needed to construct a road, construct a well pad, and to drill two wells. The Forest
Service has also approved the SUPO—the surface use plan—for the remaining eleven wells. All
that remains to be done is for the Acting Assistant Secretary to approve the eleven APDs.
38. For the Clear Creek unit, BLM has received the required cultural resource
surveys. Continental has obtained the required permit from the United States Army Corps of
Engineers in connection with the access road to be built. BLM has agreed that the Dakota
skipper’s habitat will not be affected by the drilling operations. The environmental assessment
has been completed. All that remains is for the Acting Assistant Secretary to sign the APDs.
39. For the LCU Foster unit, all required reviews have been completed. All that
40. For the Flint Chips unit, BLM failed to act for sixty-nine days because of a
software error in its electronic permitting system. See Attachment 1 at p. 2. BLM received the
APDs on November 12, 2020. It acknowledged the APDs were complete. All that remains is for
the Acting Assistant Secretary is complete the BLM’s long overdue action.
Impact on Development
41. BLM’s illegal delay in processing these fifty APDs has injured and will continue
to injure Continental. Further delay will postpone production. That postponement delays
Continental’s receipt of revenue from the thirteen Charolais South wells. Further delay causes
an immediate decrease in the net present value of all fifty of these wells.
-10-
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 11 of 14
42. Continental’s project timetable has been premised on, among other factors: (i) the
assumption that BLM would fulfill its statutory obligations under 30 U.S.C. § 226(p) and other
applicable law when processing Continental’s APDs; (ii) BLM’s timely processing of APDs for
wells in the five units; (iii) Continental’s knowledge that environmental review for the APDs had
already been conducted as part of the Antelope Master Development Plan and related BLM
planning for development of the severed federal mineral estate in three of the units; and (iv)
BLM’s own goal that the permits would be granted in a manner that would allow Continental to
43. BLM has denied Continental’s procedural right to have the APDs Continental
submitted processed in accordance with the mandatory procedures, and within the obligatory
deadlines, that the Mineral Leasing Act establishes. See Spokeo v. Robins, 136 S. Ct. 1540, 1549
(2016) (explaining that “the violation of a procedural right granted by statute” can constitute the
COUNT I
45. The Mineral Leasing Act requires that: “Not later than 10 days after the date on
which the Secretary receives an application for any permit to drill, the Secretary shall--
(A) notify the applicant that the application is complete; or (B) notify the applicant that
information is missing and specify any information that is required to be submitted for the
-11-
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 12 of 14
“Not later than 30 days after the applicant for a permit has
submitted a complete application, the Secretary shall—
(i) that specifies any steps that the applicant could take for
the permit to be issued; and
30 U.S.C. § 226(p)(2)(A)-(B).
47. The Department has never identified any new information bearing on
environmental impacts requiring additional NEPA analysis for any of the fifty APDs Continental
submitted. The Department was statutorily required to issue the APDs under 30 U.S.C. §
226(p)(2)(A), or provide a reasoned deferral under 30 U.S.C. § 226(p)(2)(B), long before the
48. The Department has never given Continental any notice containing the
49. The Department has failed to meet its non-discretionary, mandatory obligations
Continental requests respectfully that the Court grant the following relief:
-12-
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 13 of 14
1. Direct the Department to immediately issue all thirteen APDs for the Charolais
2. With respect to the remaining wells, direct the Department to issue the APDs or
notices compliant with 30 U.S.C. § 226(p)(2)(B) within seven days of the Court’s order;
3. All costs and attorneys’ fees authorized under 28 U.S.C. § 2412; and
4. Such other and further relief, in law and in equity, to which Continental may be
entitled.
-13-
4841-8100-8093.1
Case 1:21-cv-00034-DMT-CRH Document 1 Filed 02/23/21 Page 14 of 14
VERIFICATION
On behalf of Continental, I have reviewed this Verified Complaint. I know or believe that
all allegations in the Complaint of which I have personal knowledge are true. I believe that the
allegations of which I do not have personal knowledge are true based on documents and other
information I have reviewed. I verify under penalty of perjury that the foregoing is true and
correct.
4841-8100-8093.1