### UNITED STATESDISTRICT COURT FORTHE DISTRICT OF COLUMBIA BILLBARRETT CORPORATION, ) ) 

### Plaintiff, ) ) 

### v. ) ) 

### UNITED STATES DEPARTMENT ) OFTHE INTERIOR, 

### etal., ) ) 

### Defundanh, ) ) 

### and ) ) 

### BTU WESTERN RESOURCES, INC., ) ) 

### Intervenor-Defendant. ) Civil Case No. 09-19 (RJL)



### 1"'- MEMORANDUM OPINION (March 

### II ,2009) PlaintiffBill Barrett Corporation ("BBC") has filed suit under the Administrative Procedure Act ("APA") challenging the U.S. Bureau ofLand Management's ("BLM") grant ofa coal exploration license to BTU Western Resources, Inc. ("BTU"). BBC claims that the exploration license must be set aside because it lacks sufficient stipulations to protect BBC'srights to extract coalbed natural gas ("CBNG") underpreexisting licenses should BBC'swells be contaminated by BTU's coal exploration drilling. Presently before the Court is BBC's motion for a preliminary injunction enjoiningthe government from allowing coal exploration under the license to proceedpendingresolution ofthe

1case on the merits.! Because BBC has failed to establish the requisite likelihood ofirreparable harm to warrant a preliminary injunction, its motion is DENIED.2 

### BACKGROUND Underthe Federal LandPolicy ManagementAct of 1976, it is the United States' policy that management ofpublic lands "be on the basis ofmultiple use and sustained yield." 43 U.S.c. § 1701(a)(7). Consistent with thatpolicy, BLM regulations provide that the grant ofa permit or lease to develop anyone mineral

onpublic land "shall not preclude" the issuance ofotherpermits or leases for the development ofother minerals on the same land, so long as there exist "suitable stipulations for simultaneous operation." 43 C.F.R. § 3000.7. One such form of multiple use - and the form at issue in this case - is the simultaneous extraction of both natural gas and coal from a resource-rich tract ofpublic land. See id. § 3400.1(b). BBC operates approximately 108 CBNG wells in the "PorcupineField" in Wyoming's PowderRiver Basin pursuantto numerous federal oil and gas leases. (Mot. for Prelim. Inj. [Dkt. #3], Ex. A, Tracy Galloway Aff.**~** 2, Sept. 12,2008.) Neighboring BBC's CBNG operation is BTU's coal-miningoperation, which

Plaintiffalso seeks identical reliefunder Section 705 ofthe APA in the form ofa postponement ofthe effective date ofthe exploratory license. 5 U.S.C. § 705. 2 Plaintifffiled the instant motion on January 7,2009, seeking both a temporary restraining orderand a preliminary injunction. ([Dkt. #3].) The Court held an abbreviated hearing later that day, after which the Court issued an ordertemporarily restraining and enjoining the defendants from allowing coal exploration operations under the license to proceed between that date and January 17,2009. (Minute Order, Jan. 7, 2009.) The Court subsequentlyheard full oral argument on January 13,2009on whether apreliminary injunction should issue upon the temporary restraining order's lapse. 2extracts coal from the North Antelope Rochelle surface mine. In February 2007, BTU submitted an application to BLM for a federal coal exploration license to allow BTUto explorethe coal reserves underlying the Porcupine Field and collect certain geologic data. (Defs.' Mem. In Opp. [Dkt. #5], Ex. A, Michael J. Karbs Decl.**~** 2, Jan. 6, 2009.) Such exploration entails drilling numerous small core holes into the field's coal bed and is a necessary precursorto a competitive bid process for a coal lease, as the data collected enables BLMto meet its responsibility to ensure thatthe publicreceives fair market value for the coal.3 (Karbs Decl.**~~** 5-6); 43 C.F.R. § 3422.1(c)(l). BTU soughtthe exploration license in orderto advance its effort to secure a coal lease. BBC, while ostensibly not objectingto mUltiple use ofthe Porcupine Field, claims that exploratory drilling will irreparably harm its CBNG operation. BBC

uses a vacuum technique toproduce CBNG, employingtwo compressors that create negative pressure in the coal reservoir. (Galloway Aff.**~** 2.) The compressors are sensitivetothe presence ofoxygen in the gas stream, which can renderthe CBNGunmarketable. Ifeither compressor detects oxygen exceeding 10 parts permillion for a period often minutes, the compressorwill automatically shut down. (Jd.) Torectify such so-called "oxygen contamination," BBC must vent and flow all ofthe gas lines leadingtothe compressor, purgingthe CBNG in the lines to the atmosphere. (Jd.**~** 3.) This is a time consuming and costly

3 In this instance, BLM asserts that it lacks adequate data for fair market valuation ofapproximatelytwo and one halfsquare miles ofthe Porcupine Field containing an estimated 169,000,000 tons ofcoal. (Karbs Decl.**~** 8.) 3procedure, compoundedbythe loss ofthe purged CBNG's sale value. (Id.) BBC contends that due to the Porcupine Field's geologic makeup, specificallythe permeability and porosity ofthe coal, exploratory drilling will cause oxygen contaminationto occur. (Compi. [Dkt. #1]**~** 22; PI.'s Mem. In SUpp. at 1.) BBC contacted BLM in October2007 to notify the agency ofits concerns. BBC and BLMthereaftertraded multiple letters overthe next nine months as BBC providedBLMwith additional technical information, at BLM'srequest. Upon consideration ofBBC's submissions and protests, BLMrecognized that a risk of oxygen contamination existed, but concluded in a decision issued August 12, 2008 that the risk was too uncertain to warrant denying BTU's application altogether. (Mot. for Prelim. Inj., Ex. B, BLMDecision at 2,6.) BLM instead crafted a phased drilling approach and stated its expectationthat, pursuantto the standard simultaneous-use stipulations to be included in the license, BTU wouldbe obligated to compensate BBC for any verified damage as a result ofits exploratory drilling.4 (Id. at 5-6.) Not satisfied, BBC filed an appeal with the InteriorBoard ofLand Appeals ("IBLA"), but the IBLA failed to act within the regulations' allotted time period, rendering BLM'sdecision on the license effective and final in late October 2008. 5 BLM formally issued BTUthe coal exploration license on

4 Under the phased drilling approach, BTU is authorized to drill the ten most important core holes for data collection purposes in a first round ofdrilling. (BLM Decision at 5-6.) Ifadverse effects on BBC occur, BTU can then waive or defer drilling the remaining 38 proposed core holes. (Id.) 5 Underthe relevant regulations, BBC's notice ofappeal and petition for a stay automatically stayed the effectiveness ofBLM's decision pending the IBLA'sruling. 43 C.F.R. §4.21(a)(l). IBLA's failure to act within 45 calendar days afterthe expiration of 

### 4December 30,2008, and BBC filed the present suit and motion for apreliminary injunction January 7, 2009. BBC'sprimary contention is that BLM's decision was arbitrary and capricious, an abuse ofdiscretion, not in accordance with law, and in violation ofBBC's lease because the exploratory drilling will unreasonably interfere with BBC's CBNG operation and the license's stipulations do not adequately prevent such harm or compensate BBC for any damages incurred if oxygen contamination should occur. 6 (Pl.'s Mem. In SUpp. at 9-22.) DISCUSSION I. Legal Standard "Apreliminary injunction is an extraordinary remedy that should be granted only when the party seeking the relief, by a clear showing, carries the burden ofpersuasion." Cobellv. Norton, 391 F.3d 251, 258 (D.C. Cir. 2004) (citing Mazurek v. Armstrong, 520 U.S. 968, 972 (1997)). As recently articulated by the Supreme Court, in order to obtain a preliminary injunction a movant must demonstrate: (1) that he is likelyto succeed on the merits; (2) thathe is likely to suffer irreparable harm in the absence ofpreliminary relief; (3) that the balance of equities tips in his favor; and (4) that an injunction is in the public interest. Winter

the time for filing a notice ofappeal, however, automatically rendered BLM's decision effective and final. Id. §4.21(a)(3), (b)(4), (c). 6 BBC's lease provides: "Lessorreserves the right

...to authorize future uses upon or in the leased lands, includingthe approval ofeasements or rights-of-way. Such uses shall be conditioned so as to prevent unnecessary or unreasonable interference with rights oflessee." (Defs.' Mem. In Opp'n, Ex. 4, Offerto Lease and Lease for Oil and Gas at 2, §6.) BBC also contends that BLM violated the National Environmental Policy Act and that BLM acted in excess ofstatutory authority by issuing the license for the express purpose ofendowing BTU with negotiating leverage to be used against BBC to reach a reasonable accommodation. CPl.'s Mem. In Supp. at 22-31.) 5

### v. 

### NaturalRes. De! Counsel, 129 S. Ct. 365, 374 (2008); 

### see also CityFedFin. Corp. v. 

### Office a/ThriftSupervision, 58 F.3d 738, 746 (D.C. Cir. 1985). While these factors interrelate on a sliding scale, 

### CityFedFin. Corp., 58 F.3d at 747, the movant must, at a minimum, "demonstrate that irreparable injury is 

### likely in the absence ofan injunction," 

### Winter, 129 S. Ct. at 375 (citing

### LosAngeles v. 

### Lyons, 461 U.S. 95,103 (1983)) (emphasis in original). Indeed, because "thebasis of injunctive reliefin the federal courts has always been irreparable harm," a movant's failure to establish irreparable harm is grounds for denying a motion for preliminary injunction without consideringthe other factors. 

### CityFedFin. Corp., 58 F.3d at 747 (citation omitted). Forthe following reasons, the Court finds that BBC's motion fails on this basis. 

### II. Irreparable Harm Our Circuit has set a high standard to establish irreparable harm. 

### Chaplaincy a/Full Gospel Churches v. 

### England, 454 F.3d 290, 297 (D.C. Cir. 2006). First, the injury "mustbe both certain and great; it must be actual and not theoretical." 

### Id. (quoting 

### Wis. Gas Co. v. 

### FERC, 758 F.2d 669, 674 (D.C. Cir. 1985) (per curiam)). The moving party must show "[t]he injury complained ofis ofsuch imminence that there is a 'clearand present' need for equitable reliefto prevent irreparable harm." 

### Id. Second, the asserted injury must be beyond remediation. As stated by the D.C. Circuit: Mere injuries, however substantial, in terms ofmoney, time and energy necessarily expended in the absence ofa stay[,] are not enough. The possibility that adequate compensatory or other 6corrective reliefwillbe available at a later date, in the ordinary course oflitigation[,] weighs heavily against a claim ofirreparable harm. Wis. Gas Co., 758 F.2d at 674 (quoting Va. Petroleum JobbersAss 'n v. FPC, 259 F.2d 921, 925 (D.C. Cir. 1958)). Indeed, it is well-settled that monetary loss constitutes irreparable harm "only where the loss threatens the very existence of the movant's business." Id. To support its position that oxygen contamination is likely to occur, BBC points to three pieces ofevidence: its experiences with oxygen contamination in connection with the clean-out ofCBNG wells at the nearby Pronghorn Field, (Mot. for Prelim. Inj., Ex. A, Dec. 12,2007Letter at 1-5); oxygen contamination that occurred as a result ofthe drilling ofa waterwell in the vicinity ofthe Porcupine Field, (Jd., Apr. 1, 2008 Protest Letter at 19-21); and a three-page technical reportprepared for BBC by petroleum engineer J. Craig Creel (the "Creel Report"), which analyzed the waterwell incident and concluded that "[i]f any ofthe ten proposed core holes are drilled, oxygen will be introduced into the producing coal seam reservoir and subsequently, into the BBC gas gathering system," (Jd., Minimum Safe Core Hole Drilling Distance Report at 3). BLM, however, determined that the Pronghorn Field evidence, while somewhat analogous, entailed significantly different field conditions. (BLM Decision at 2.) BLM similarly determinedthatthe waterwell incident also entailed significantly different circumstances, including that the diameter ofthe waterwell was much biggerthan the diameter ofexploratory core holes, lendingthe evidence and the 7

### Creel Report little predictive value. (BLM Decision at 3; Mot. for Prelim. Inj., Ex. A, BLM Review ofJ. Craig Creel Report at 1-4, July 22,2008.) Finally, BLM and BTU note that the State ofWyoming, in seeking leave to participate in BBC's IBLA appeal, stated that it was "unaware ofany harm ofthe nature [BBC] asserts

ever occurring in Wyoming," a conclusion consistent with BLM's understanding based on its own investigation. (Defs.' Mem. In Opp., Ex. 7, Wy. Mot. for Leave to File Amicus Br.**~** 

### 1, Sept. 25, 2008; BLMDecision at 2-3.) The Court finds thatthe weight ofthe evidence is, at best, inconclusive as to whether oxygen contamination is likely to occur. While BBC's evidence establishes oxygen contamination is apossibility, 

### BLM, in its expertjudgment, determined, after evaluating BBC's evidence and inquiring into the experiences of similarly situated CBNG operators, that the risk ofoxygen contamination "does not appearto be proven with any certainty." (BLM Decision at 2-3.) This Court, ofcourse, must give due deference to BLM in matters within the agency's technical expertise, particularly wherepredictivejudgments are at issue. SeeAm. Wildlands v. Kempthorne, 

### 530 F.3d 991, 1000 (D.C. Cir. 2008) ("The rationale for deference is particularly strong when the [agency] is evaluating scientific data within its technical expertise[.]" (citation omitted)); BNSFRy. Co. 

### v. Surface Transp. Bd., 

### 526 F.3d 770, 781 (D.C. Cir. 2008) ("It 

### is well established that an agency's predictivejudgments about areas that are within the agency's field of discretion and expertise are entitled to particularly deferential review, so long as they are reasonable." (citation omitted)). Giving BLMthat deference, this Court is 8

### not persuaded that BLM'sjudgmentwas in error. Thus, in the absence ofnew evidence at this stage establishing that the harm BBC alleges is likely 

### to occur, BBC has failed to establish the requisite risk ofirreparable harm to warrant a preliminary injunction. Finally, it bears noting that BBC has also has failed to establishthat the harm it contends will occur is ofan irreparable nature. See Wis. Gas Co., 

### 758 F.2d at 674. BBC contends that oxygen contamination causedby exploratory drilling "will impose significant losses upon BBC, both in terms ofcosts oflabor and the costs oflost and delayed production and associated revenues, and also in terms ofthe irrevocable loss ofCBNG natural resource thatwill have to be vented to the atmosphere before production can resume." (Pl.'s Mem. In Supp. at 33.) Assuming so, however, BBC has not established that the exploratory drilling will irreparably destroy BBC's ability to produce CBNG. Indeed, BBC has been able to return contaminated wells to production injustover nine days. (Mot. for Prelim. Inj., Ex. A, May 9, 2008 Letter at 3.) Moreover, BBC has not established that corrective or compensatory reliefis otherwise unavailable. Despite BBC's attemptto shift the burden to the defendants, it is BBC'sburden to establish, "by a clear showing," Cabell, 

### 391 F.3d at 258, that no adequate remedy at law exists, Wis. Gas Co., 

### 758 F.2d at 674. While BBC cannot pursue compensatory damages under the APA, 5 U.S.C. 

### § 702, it may, as it itselfhas acknowledged, be able to pursue both a breach ofcontract claim and atakings claim against the United States for unreasonably interfering with BLM's existing leases, (Mot. for Prelim. 9Inj., ExA, Apr. 1,2008Letter at 10 (citing

### DelRioDrillingPrograms, Inc. v. 

### UnitedStates, 146 F.3d 1358 (Fed. Cir. 1998))). 

### See alsoAmberRes. Co. v. 

### UnitedStates, 538 F.3d 1358, 1378 (Fed. Cir. 2008) (affirming Court ofFederal Claim'sjurisdiction over contract-based claims arising from mineral leases). Accordingly, becausethe injury BBC asserts is ofa monetary nature and because BBC has failed to establish by a clear showing that it has no other adequate remedy, BBC's motion for a preliminary injunction must be denied onthis basis as well. 7 An appropriate Orderwill issue with this Memorandum Opinion.



# ,

# Q~ RICHAR

. LEON United States DistrictJudge

7 BBC's failure to establish irreparable hann is also fatal to BBC'srequest for relief under Section 705 ofthe APA, which grants a reviewing court authorityto postpone the effective date ofan agency action "to the extent necessary to prevent irreparable injury." 5U.S.C. § 705. 10