Opinion for the court filed by Circuit Judge TATEL.
In 1999, the Pacific Regional Director of the Interior Department’s Minerals Management Service caused four oil and gas leases off the California coast, for which appellants had originally paid the United States over $140 million, to expire. The Regional Director later testified that he based his decision solely on political considerations and that absent such considerations he would have instead extended the leases. Reviewing the matter de novo, however, the Interior Board of Land Appeals, acting without regard to political considerations and on the basis of scientific evidence, affirmed the original decision. The district court upheld that ruling, and appellants now appeal, arguing that in order to cure the Regional Director’s original decision of political taint, the Board should have adopted the decision the Regional Director says he would have made absent political influence. Because we agree with the district court that appellants received all they were entitled to — i.e., an agency decision on the merits without regard to extra-statutory, political factors — we affirm.
I.
Under the Outer Continental Shelf Lands Act of 1953, the federal government has jurisdiction and control over the outer continental shelf, a zone which extends from the edge of state coastal waters to the border of international waters — generally from 3 to 200 miles offshore and covering a total area of some 1.76 billion acres.
See
43 U.S.C. §§ 1331(a), 1332; Minerals Management Service,
Report to Congress: Comprehensive Inventory of U.S. OCS Oil and Natural Gas Resources
3 (Feb.2006),
available at
http://www. boemre.gov/revaldiv/PDFs/Finallnventory ReportDeliveredToCongress-correeted36-06.pdf. In recent years, crude oil extracted from the outer continental shelf has represented an increasingly large share of America’s domestic oil production, rising from under ten percent in 1981 to nearly thirty percent in 2010. Energy Information Administration,
Crude Oil Production
(2011). Although the vast majority of outer continental shelf oil production occurs in the Gulf of Mexico, a limited amount also takes place off the California coast.
Id.
California’s small share is attributable at least in part to two circumstances: that the last California outer continental shelf lease sale occurred in 1984; and that since fiscal year 1991, Congress
The Outer Continental Shelf Lands Act empowers the Secretary of the Interior to sell and administer oil and gas leases on the outer continental shelf, an authority that the Secretary largely delegated (at all times relevant to this case) to the Minerals Management Service (“MMS”), which in turn delegated most of this authority to its regional offices. 43 U.S.C. §§ 1334(a), 1337(b); 30 C.F.R. § 250.104 (1999); Dep’t of Interior, Departmental Manual, Part 118, § 5.8 (Apr. 15, 2003); Dep’t of Interi- or, Department Manual, Part 118, § 5.9 (Dec. 9, 1996). The Secretary has since abolished the Minerals Management Service and transferred its Outer Continental Shelf Lands Act responsibilities. Sec’y of Interior, Secretarial Order 3299 (May 19, 2010). But because that reorganization occurred after the relevant events in this case, we shall refer to MMS’s authority as it existed before the reorganization.
Exercising that authority, MMS grants exclusive rights to explore for, develop, and produce oil and natural gas in exchange for an up-front bonus, annual rentals, and royalties on oil and natural gas actually produced for a “primary term” of either five or ten years. 43 U.S.C. § 1337(a), (b). During the exploration stage, production or other operations on the lease may be “suspended” either at the request of the leaseholder or at the Service’s direction, which has the effect of extending the lease’s term for the suspension period. 43 U.S.C. §§ 1334(a)(1); 1337(b)(5); 30 C.F.R. §§ 250.110, 256.73 (1999). Leaseholders may voluntarily join multiple leases together into “units” by signing “unitization” agreements that must be approved by the Service. 43 U.S.C. § 1334(a)(4); 30 C.F.R. §§ 250.1300, 250.1301(a) (1999). The regulations in effect when the units at issue in this case were created required a unit to
include the minimum number of leases or portions of leases required to permit one or more reservoirs or potential hydrocarbon accumulations to be served by an optimal number of artificial islands, installations, or other devices necessary for the efficient exploration or development and production of oil and gas or other minerals.
30 C.F.R. § 250.50(b) (1986). In other words, for a lease to belong in a particular unit, the lease must overlie “one or more [mineral] reservoirs or potential hydrocarbon accumulations.”
In re Samedan Oil Corp.,
173 IBLA 23, 39-40 (2007)
(“IBLA Op.”).
Once a unit has been approved, all leases within the unit are generally extended as one. 30 C.F.R. § 250.1301(g) (1999); MMS’s Answer to Aera’s Statement of Reasons 4-5, Feb. 26, 2001 (included at J.A. 295-96) (agreeing with Aera that in practice suspension requests have been handled at the unit, rather than the lease level). During the exploration stage, the Service also has authority to “contract” a unit by excluding all or part of one or more leases based on better understandings about the dimensions and qualities of the underlying mineral reservoir.
IBLA Op.,
173 IBLA at 36, 40 (justifying that interpretation of the appropriate legal criteria for excluding leases from a unit based (1) on the regulations in effect when the units at issue in this case were formed, 30 C.F.R. § 250.50(b) (1987); (2) on the two corresponding unit agreements; and
Their story begins in the early 1980s when Appellant Aera Energy paid $141 million for three of the leases, and Appellant Noble Energy’s predecessor paid $1.65 million for the fourth. All four leases were later unitized — Aera’s leases became part of the Santa Maria Unit and Noble’s became part of the Gato Canyon Unit. Prior to 1999, both units had operations suspended several times, first at the companies’ request and then between 1992 and 1999, at the Regional Office’s direction as part of a study known as the California Offshore Oil and Gas Energy Resources (“COOGER”) study. The COOGER study “was designed to help MMS evaluate the operators’ exploration and development plans, as well as to provide local governmental entities in California with information regarding activities on the leased properties.”
Amber Resources Co. v. United States,
Anticipating the end of the COOGER study, Reed informed both Aera and Noble in December 1998 that if they wished to extend their units, they would need to submit new suspension requests, which they did. Then in June 1999, setting in motion the events at issue in this case, Reed told both companies that his office would be evaluating whether any units should be “contracted.” Over the ensuing months, Aera and Noble made their case against contraction by presenting scientific and historical data to the Regional staff. Reed then notified Aera and Noble of his decision: “we have determined that the geological and geophysical data and interpretation no longer support inclusion of [the four leases] within the Santa Maria [and Gato Canyon] Unit[s].” Accordingly, Reed excluded the four leases, causing them to expire. Simultaneously, he granted suspension requests for the remaining leases in each unit.
While Reed was considering the suspension requests, “[California’s] Governor, other State and local officials, including California Coastal Commission members, and various Congressional members expressed opposition to or concern over development of the 40 undeveloped California [outer continental shelf] leases, with
Suspecting that politics had influenced Reed’s decision and disagreeing with the negative assessment of the leases’ production potential, Aera and Noble appealed to the Interior Board of Land Appeals (“IBLA”) — “Interior’s review authority charged with deciding, on behalf of the Secretary, matters relating to the use and disposition of public lands and their resources.”
Orion Reserves Ltd. P’ship v. Salazar,
The IBLA decided that Reed’s “conclusory findings” were “fundamentally] flaw[ed].” In re Samedan Oil Corp., 163 IBLA 63, 69 (Sept. 7, 2004). But because it also found that the record required further factual development, it referred Aera and Noble’s appeals to an administrative law judge for an independent evidentiary hearing covering not just the evidence considered by MMS at the time of Reed’s decision, but also any evidence available to the agency at that time. Id. at 70-71; In re Samedan Oil Corp., IBLA 2005-166, IBLA 2005-167, at 2-4 (May 11, 2005). MMS moved for reconsideration, arguing against holding a hearing and suggesting instead a remand to the Pacific Regional Director to issue a new decision. In response, Aera and Noble pressed the IBLA to proceed as planned and to issue a de novo decision based on the administrative law judge’s proposed fact findings, which the IBLA ultimately agreed to do.
The administrative law judge held a thirteen day hearing, which focused primarily on the potential for commercial production of oil and gas from the four excluded leases but which also included evidence regarding political influence over the original decision making process. Most significantly for our purposes, Reed testified that his decision was based not on the merits, but on politics. According to Reed, his immediate supervisor told him that it “would be politically very important to cancel some of the tracts” as a show of “good faith to California officials” who vocally opposed drilling off the California coast. Reed Dep. 10:04:18-36, Mar. 24, 2005 (included at J.A. 362). Excluding the four leases “would help her in carrying on the credibility of the region and her work in Washington.” Reed Dep. 11:21:20-26 (included at J.A. 374-75). In particular, she hoped it would “appease[ ]” California politicians, helping her to preserve the remaining thirty-six undeveloped leases. Reed Dep. 11:22:28-:23:16 (included at J.A. 375-76).
In addition, Reed explained that absent these political considerations, he would have reached the opposite decision — i.e., he would have left the four leases in their units and granted Aera and Noble’s sus
The administrative law judge found Reed’s testimony about whether political considerations played a role in the exclusion decision “convincing[,] ... unrebutted[,] and ... credible.” Id. But with respect to the leases’ geological potential and the propriety of excluding them, the administrative law judge found Reed to be a less reliable witness than his subordinates. Id. at 19 (included at J.A. 720). The administrative law judge offered three reasons for this credibility determination: first, “no rule or written policy ... permits unitization based upon [two of Reed’s rationales-] the fact that the Government may lose rental revenue or that a lease may not be released for many years,” id.; second, “the purpose of unitization is not to extend leases,” id.; and third, Reed “was less qualified than [his subordinates] by training and relative familiarity with the relevant data to render an opinion on whether the excluded leases should have been removed from their respective units,” id. In addition, the administrative law judge made extensive findings regarding the exploration histories of the four leases, the companies’ future exploration and development plans, and the likelihood that the leases contained potential hydrocarbon accumulations. He concluded that the companies’ exploration efforts on the four leases had essentially ended and that based on data collected during that now-completed exploration period, it was unlikely that any of the leases contained potential hydrocarbon accumulations.
The IBLA then issued a final decision in which it adopted the administrative law judge’s fact findings. The “key issue” the Board addressed, which had been “the focal point of the hearing proceedings, was whether the evidence available to MMS at the time of the decisions formed a reasonable basis for the decisions to remove the leases from their respective units.”
IBLA Op.,
173 IBLA at 38-39. To answer that question, the IBLA laid out the proper legal criteria for unit contractions. Notably, the IBLA rejected two criteria that Aera and Noble had championed and that Regional Director Reed had testified he would have considered but for politics: “the potential loss of rental revenue and the minimal likelihood of tract releasing.”
Id.
at 37. Instead, the IBLA explained that once exploration is complete, as it essentially was for these four leases, “contraction of a unit area is appropriate if the evidence does not show the requisite strong possibility of the presence of a hydrocarbon accumulation on the excluded leases.”
Id.
at 41. Because “[t]he [administrative law] judge’s factual findings and the record as a whole
dearly
demonstrate that the excluded leases do not contain
The IBLA also considered whether the exclusion decisions “were unduly tainted by impermissible political considerations.” Id. at 38. The Board first observed that “Dr. Reed did not review or evaluate the data himself, but relied on the analysis of his staff who were not instructed that the excluded leases needed to be terminated or that any particular result was desired and who reached the decision that the leases should be excluded based strictly on the seismic, well log, and other geological and geophysical data” and that “MMS’s technical staff was more qualified than Dr. Reed by training and relative familiarity with the relevant data.” Based on those observations, the Board concluded “that the decision-making process and actual decision-makers [i.e., Reed’s subordinates] were sufficiently insulated from the political pressure to obviate the need to set aside the MMS’s decisions.” Id. In addition, the IBLA concluded that “the record developed during the hearing process clearly supports MMS’s decisions to exclude the leases from their respective units.” Id. (emphasis added). In other words, as discussed above, because Aera and Noble had failed to show a “strong possibility” of hydrocarbon accumulation on the excluded leases based on a fresh and politically untainted evidentiary record, the decision to exclude those leases was correct.
Seeking to overturn the IBLA’s decision — which, significantly for the issue in this case, represents Interior’s final agency action for the purposes of judicial review,
Orion Reserves Ltd.,
Aera and Noble now appeal. We review the district court’s decision to grant summary judgment de novo.
Novicki v. Cook,
II.
In support of the claim that they are entitled to have their four leases reinstat
We agree with Aera and Noble that Reed was the relevant decisionmaker for MMS’s original decision and that in concluding otherwise, the IBLA erred. But the Board offered an independent basis for rejecting the companies’ political influence claims, and if that alternative is adequate, then, as the district court found, the Secretary’s error was harmless. See 5 U.S.C. § 706. We thus turn to Aera and Noble’s first two arguments, which challenge the adequacy of the alternative basis for the Board’s decision.
The Secretary urges us to bar Aera and Noble from pursuing either argument because “[djuring the administrative appeal proceeding, [the companies] expressly and repeatedly requested an evidentiary hearing before an [administrative law judge] and a de novo decision by the IBLA.” Resp’t’s Br. 57. We agree with the Secretary that because Aera and Noble successfully convinced the IBLA, over MMS’s objections, to order an evidentiary hearing and make a de novo decision and failed to offer an alternative argument about the scope of the Board’s authority, it would be unfair to allow Aera and Noble now to advance the clearly inconsistent theory that the IBLA lacked de novo decision making authority.
See New Hampshire v. Maine,
That said, the Secretary gives us no basis for barring the companies from pursuing their first theory — that to remove political taint from Reed’s decision, the IBLA should have reinstated the four leases, rather than evaluating whether to exclude them from their units. From the very beginning of the administrative appeal process, Aera and Noble identified improper political influence as an
“independent
reason” to set aside Reed’s exclusion decision. Aera’s Statement of Reasons 1 (included at J.A. 273) (emphasis added).
With these threshold matters behind us, this case boils down to one issue: when politics has impermissibly infected an agency decision, what steps must the agency take to cure the taint? On this subject, we have several key cases, from which three related principles emerge.
First, political pressure invalidates agency action only when it shapes, in whole or in part, the judgment of the ultimate agency decisionmaker. Thus, in our first political influence case,
D.C. Federation of Civic Ass’ns v. Volpe,
we asked whether “extraneous pressure intruded into the [agency decisionmaker’s] calculus of consideration.”
Second, even where political considerations have tainted agency action, we have consistently given the agency an opportunity to issue a new, untainted decision. For example, in
Volpe
we expressly rejected the notion that “remand would be futile ... since the agency can only repeat the process it purports already to have undertaken: namely, considering the project solely on its merits,”
id.
at 1247 n. 84, and instead sent the case back to the agency for a new decision. Likewise, in
Koniag, Inc., Village of Uyak v. Andrus, we
concluded that a letter from Congressman Dingell to the Secretary of the Interior had compromised the appearance of impartiality in the Secretary’s determination that several Native Alaskan villages were ineligible to take land and revenues under the Alaska Native Claims Settlement Act.
We have applied these two principles in cases where politics threatened to or did, as here, intrude on
intermediate
agency decisions. In such situations, so long as the agency successfully insulated its final decisionmaker from the effects of political pressure, we have allowed the agency’s final decision to stand — as though we had reviewed, reversed, and remanded the intermediate decision and then received a new petition for review from the agency’s
Third, our political influence cases emphasize the value of “establish[ing] ‘a full scale administrative record which might dispel any doubts about the true nature of [the agency’s] action.’ ”
ATX,
Applied to this case, these principles require that we reject Aera and Noble’s challenge. Notwithstanding that political considerations eoneededly drove Reed’s decision, Aera and Noble have offered no evidence that political pressure affected the Department’s ultimate decisionmaker — the IBLA — or the administrative law judge who issued the proposed fact findings on which the IBLA based its decision.
See Orion Reserves Ltd.,
Aera and Noble argue that this case differs from the decisions discussed above in two critical respects. First, the companies point out that none of those cases contains explicit evidence of political taint whereas here Reed himself admits he would have reached the companies’ preferred decision absent political considerations. But because the same legal principles apply regardless of whether the political taint is admitted or inferred, it is irrelevant that the evidence of political influence is more direct here than in our previous decisions. And in any event, in several cases the evidence was adequate to convince us that political pressure warranted, or could have warranted, invalidating agency decisions.
See Press Broad.,
Second, Aera and Noble insist that this case is unique because without political influence the IBLA never would have had the opportunity even to consider “contracting” the companies’ units. Given that only “adversely affected” parties can appeal a Regional Director’s decision, there would, they emphasize, have been no party to appeal had Reed left the leases in their units and granted the companies’ suspension requests. 30 C.F.R. § 290.2. In contrast, our other cases have all had “parties on both sides,” making it “inevitable that ... the lower level official’s decision would ... be appealed” to higher level decision-makers within the agency. Reply Br. 19 (contrasting this case with Koniag I). Moreover, the companies explain that unlike the suspension decisions, which came in response to requests from Aera and Noble, the “contraction” decision was discretionary — that is, Reed had no obligation even to consider it and likely would never have done so but for politics. This too distinguishes our other cases in which “an application for Government approval had been submitted; a decision had to be rendered; and the question was whether political influence tainted the decision.” Reply Br. 16 (contrasting this case with Press Broadcasting and ATX). The companies thus contend that unlike aggrieved parties in our previous cases, they cannot be placed in a politically untainted position unless the agency gives effect to the decision Reed would have made.
Aera and Noble are correct that the circumstances presented here are in certain respects unlike those in our previous cases. But we are unconvinced that these differences warrant adopting a wholly new approach to curing political interference in agency decision making. We have never even hinted that to cure a decision of political taint, an agency must determine, and give effect to, the decision that would have been made had politics not intruded. Indeed, even though
Koniag I
lacks the unique features of this case, the district court there took an approach very much like that advocated by Aera and Noble— namely, reinstatement of a subordinate official’s untainted decision — out of concern over the lingering effects of past political interference.
See Koniag, Inc. v. Kleppe,
This approach makes sense. Were we to adopt the companies’ position, anyone believing that politics had influenced an agency decision would presumably demand an evidentiary hearing to determine not only whether politics actually did influence the decision, but also what the decision would have been absent political interference. Such hearings would be both com
Moreover, accepting the companies’ argument would mean forcing the IBLA to adopt a “special” procedure exclusively for political influence cases. After all, the IBLA ordinarily has de novo review authority (or, at least, Aera and Noble are estopped from arguing otherwise, see
supra
218-19), and “de novo” review ordinarily means that an appellate body provides its
own
answers to questions presented on appeal rather than ones based on what the original decisionmaker would have done. Requiring the IBLA to mechanically impose Reed’s hypothetical decision would thus deviate from the Board’s ordinary practice. But we have never required a special procedure and instead have encouraged agencies to adapt established internal procedures to render fresh untainted decisions.
See, e.g., Press Broad.,
Finally, applying Aera and Noble’s framework would in some cases mean an agency would have to adopt a decision the agency itself considers unlawful. This very case illustrates the problem. The IBLA determined not only that exclusion was appropriate under the correct legal standard, but also that two of the criteria Reed would have relied on to maintain the leases — “potential loss of rental revenue” and “the minimal likelihood of tract releasing” — were impermissible considerations.
IBLA Op.,
173 IBLA at 37;
ALJ Op.
at 19 (included at J.A. 720). Accordingly, were the IBLA to impose Reed’s decision, it would effectively be embracing the very factors it believed were impermissible, a decision we would normally find arbitrary and capricious.
Cf. Allentown Mack Sales & Serv., Inc. v. NLRB,
Resisting the significance of the IBLA’s determinations, Aera and Noble point out that the Board made no “explicit finding” that Reed’s hypothetical decision would
Of course, this might well have been a different case had the companies also advanced traditional Administrative Procedure Act claims alleging, for example, that the Department violated its own procedural or substantive requirements for “contracting,” or even considering whether to contract, a unit. Certainly, courts reviewing agency decisions involving political interference must be attuned to the heightened possibility that political influence will have caused agencies to cut corners. In this case, Aera and Noble made several such arguments to the IBLA, including that there was sufficient evidence that each lease contained mineral deposits to warrant their continued inclusion and that the companies had received inadequate notice that the Regional office would be considering whether to “contract” the units. The Board rejected these arguments. Significantly, it also implicitly rejected any argument that evaluating whether to contract the units at that time would have been improper, explaining that once exploration is essentially complete, as in the case of these four leases, it is appropriate under agency regulations to assess the available scientific evidence to determine whether leases should continue to be included in their units. But because Aera and Noble failed to challenge these conclusions on appeal, we must assume the procedural and substantive soundness of the Department’s decision. Given that assumption, Aera and Noble were entitled to nothing more than what they received — an agency decision on the merits uninfluenced by political considerations.
III.
We are keenly aware that administrative agencies making important and sometimes controversial decisions are often buffeted by political pressure. Indeed, public advocacy plays a healthy role in our system. Accordingly, “we have never questioned the authority of congressional representatives to
exert
pressure, and we have held that congressional actions not targeted directly at [agency] decision makers — such as contemporaneous hearings — do not invalidate an agency decision.”
ATX,
41 F.8d at 1528 (citing
Volpe,
So ordered.