BLM Issues Curative NEPA Analysis for Wyoming Leases Subject to WildEarth Guardians and Western Watersheds Project Litigation
On June 5, 2026, the Bureau of Land Management (BLM) Wyoming State Office released a long-awaited environmental assessment (EA) intended to cure National Environmental Policy Act (NEPA) deficiencies affecting hundreds of federal oil and gas leases in Wyoming sold between 2015 and 2020. The EA supplements the NEPA analysis for the May 2015, August 2015, November 2015, February/May 2016, August 2016, November 2016, February 2017, June 2017, September 2017, September 2018, March 2019, and March 2020 Wyoming lease sales.
Environmental groups challenged these lease sales in WildEarth Guardians v. Haaland, No. 1:16-cv-01724 (D.D.C.) (“WEG I”), WildEarth Guardians v. Haaland, No. 1:20-cv-00056 (D.D.C.) (“WEG II”), WildEarth Guardians v. Haaland, No. 1:21-cv-00175 (D.D.C.) (“WEG III”), and Western Watersheds Project v. Haaland, No. 1:18-cv-00187 (D. Idaho). The supplemental NEPA analysis was required either because a court found error in BLM’s original analysis or through settlement agreements. The EA provides additional analysis on the effects of leasing on greenhouse gas emissions and greater sage-grouse, among other resources.
The EA has two significant consequences for federal oil and gas lessees in Wyoming. First, it allows BLM to resume approving applications for permit to drill (APDs) on leases covered by the EA. Second, it may cause lease suspensions to terminate. BLM had suspended leases subject to the WEG and Western Watersheds Project cases upon lessees’ request. Lessees should review their suspension terms carefully to determine whether the EA’s issuance caused suspensions to terminate automatically and primary terms to resume running.
Notably, the EA does not address lease sales challenged in Montana Wildlife Federation v. Burgum, No. 4:18-cv-00069-BMM (D. Mont.), which include the December 2017, March 2018, June 2018, February 2019, September 2019, December 2019, and December 2020 Wyoming lease sales. The Montana Wildlife Federation court has canceled most of these leases, rendering them ineligible for curative NEPA analysis.
District of Montana Vacates Oil and Gas Leases in Phase III of Montana Wildlife Federation
On June 12, 2026, the U.S. District Court for the District of Montana adjudicated the third phase of challenges to federal oil and gas lease sales in Montana Wildlife Federation v. Burgum, No. 18-cv-0069 (D. Mont.). The court found that, when deciding to lease, BLM did not properly apply a directive in its resource management plans (RMPs) requiring it to prioritize oil and gas leasing and development outside of sage-grouse habitat. As a result, the court vacated all nonproducing leases sold at the March and December 2019 Montana/Dakota lease sales and the February, September, and December 2019 Wyoming lease sales. The court declined to vacate nine producing leases from these sales and did not vacate BLM’s offering of parcels at the December 2020 Wyoming lease sale.
This decision aligns with prior rulings in the case. In Phase I (2020) and Phase II (2022), the court similarly vacated oil and gas leases after finding BLM failed to comply with the prioritization directive. The Ninth Circuit affirmed the Phase I decision, and an appeal of the Phase II decision is pending.
The Phase III decision is notable not only for vacating a broad swath of oil and gas leases but for sparing nine producing oil and gas leases. The court declined to vacate only those leases on which actual production, i.e., drilling, occurred. Leases held by communitized or unitized production, but on which drilling had not occurred, were vacated.
The court also declined to vacate BLM’s decision to offer leases at the December 2020 Wyoming lease sale. The court reasoned that, because BLM had not issued these leases, no final agency action existed that the court could vacate. The court expressly allowed BLM to complete further NEPA analysis to determine whether to issue these leases.
For the vacated leases, BLM will not immediately return monies to leaseholders. The court stayed the effectiveness of its decision to allow for appeals. As of July 15, 2026, no appeals have been filed.
Although the decision invalidates thousands of acres of existing leases, it may have a limited effect on future leasing. The prioritization directive was contained in BLM’s 2015 RMPs for greater sage-grouse management. BLM has since revised these RMPs, and the revised RMPs lack a prioritization directive. Moreover, Public Law 119-21 (2025), colloquially known as the One Big Beautiful Bill Act, requires BLM to offer for lease any lands designated as open for leasing in an RMP that received a nomination.
For questions about this legal alert, please contact a member of the Davis Graham Environmental & Public Lands Group.