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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NORTH DAKOTA
WESTERN DIVISION

CONTINENTAL RESOURCES, INC., )

)
Plaintiff, )
)
v. ) Civil Action No. ________________
)
SCOTT DE LA VEGA, )
in his official capacity as Acting Secretary of )
the United States Department of the Interior, )
)
and )
)
THE UNITED STATES DEPARTMENT )
OF THE INTERIOR, )
)
Defendants. )
___________________________________ )

VERIFIED COMPLAINT

Continental Resources, Inc. (“Continental”) submits respectfully this verified complaint

seeking review of agency action under the Administrative Procedure Act, 5 U.S.C. §§ 701-706

(“APA”). Continental will seek emergency interim relief on an expedited schedule.

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

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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,

which pertains to thirteen APDs, Continental seeks emergency relief.

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

day they were dated. These officials have not responded.

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

pertaining to the Charolais South unit.

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Background

7. The Mineral Leasing Act, 30 U.S.C. §§ 181-287, establishes mandatory

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

Secretarial Order 3395. See Attachment 1.

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

requesting her immediate approval. Attachment 3.

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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

14. Plaintiff Continental is an Oklahoma corporation with its principal place of

business in Oklahoma City, Oklahoma.

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

the Interior. 43 U.S.C. § 1451.

16. Defendant United States Department of the Interior is an executive department of

the government of the United States of America. 43 U.S.C. § 1451.

JURISDICTION AND VENUE

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.

18. Venue in this Court is proper under 28 U.S.C. § 1391(e)(1)(B) because a

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

BLM’s Administration of Oil and Gas Programs

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

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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

in Dickinson, Stark County, North Dakota is a subcomponent of the Montana/Dakotas State

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.

Master Development Plans and Unit Plans of Development

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

pipeline locations, as well as other areas of proposed surface use.

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

Master Development Plan to facilitate development on parcels under lease. A Master

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

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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

limitations on Continental’s activities to avoid unnecessary risk to that species.

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

have a significant effect on the environment, a finding reflected in a “Finding of No Significant

Impact” (“FONSI”). No administrative protest or judicial challenge was filed with respect to the

FONSI.

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The Charolais South Unit APDs

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

Acting Assistant Secretary Davis.

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 ...

using the project area.” Attachment 5 (COA at 3 ¶ 15) (emphasis added).

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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

risk of impacts to wildlife in the area.

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

skipper during construction.

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

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Continental’s third-party vendor to lay the flow lines from the Charolais South A and B pads to

the CTB facility.

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

duration of the continued delay.

35. Further delay will postpone production. That postponement delays Continental’s

receipt of revenue from the thirteen Charolais South wells. Stated differently, further delay

causes an immediate decrease in the net present value of these wells.

36. If these delays continue and these several losses are incurred, Continental has no

legal means to recover them.

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Continental’s Permit Applications for the Remaining Wells

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

remains is for the Acting Assistant Secretary to sign the APDs.

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.

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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

comply with the applicable conditions of approval.

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

injury in fact required for a plaintiff to establish standing).

COUNT I

BLM’S ACTION IS CONTRARY TO LAW

(5 U.S.C. § 706)

44. Continental reasserts and incorporates by reference the preceding paragraphs as if

fully set forth herein.

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

application to be complete.” 30 U.S.C. § 226(p)(1)(A)-(B).

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46. The Mineral Leasing Act requires that:

“Not later than 30 days after the applicant for a permit has
submitted a complete application, the Secretary shall—

(A) issue the permit, if the requirements under the National

Environmental Policy Act of 1969 and other applicable law
have been completed within such timeframe; or

(B) defer the decision on the permit and provide to the

applicant a notice—

(i) that specifies any steps that the applicant could take for
the permit to be issued; and

(ii) a list of actions that need to be taken by the agency to

complete compliance with applicable law together with
timelines and deadlines for completing such actions.”

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

filing of this verified complaint.

48. The Department has never given Continental any notice containing the

information that 30 U.S.C. § 226(p)(2)(B) requires it to provide an applicant when it chooses to

defer issuing a decision on an APD.

49. The Department has failed to meet its non-discretionary, mandatory obligations

under 30 U.S.C. § 226(p).

PRAYER FOR RELIEF

Continental requests respectfully that the Court grant the following relief:

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1. Direct the Department to immediately issue all thirteen APDs for the Charolais

South wells or provide a non-arbitrary reason to withhold approval under 30 U.S.C. §

226(p)(2)(B) by no later than March 8, 2021;

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.

Submitted respectfully this 23rd day of February, 2021,

By: /s/ L. Poe Leggette ___

L. Poe Leggette
Alexander K. Obrecht, ND Bar # 08346
BAKER & HOSTETLER LLP
1801 California Street, Suite 4400
Denver, Colorado 80202-2662
Telephone: (303) 861-0600
[email protected]
[email protected]

Counsel for Plaintiff Continental Resources, Inc.

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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.

Date: February 22, 2021

/s/ Chad B. Newby

Chad B. Newby, Director, Project Management_

for Continental Resources, Inc.

* Counsel and Mr. Newby certify they have the signed

original of this verification which is available for
production to the Court or inspection during normal
business hours by a party to this action.

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