GULF RESTORATION NETWORK, et al., Plaintiffs, v. DAVID BERNHARDT, in his official capacity as Secretary of the United States Department of the Interior, et al., Defendants, and AMERICAN PETROLEUM INSTITUTE, et al., Intervenor-Defendants.
Civil Action No. 18-1674 (RBW)
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
April 21, 2020
The plaintiffs, Gulf Restoration Network, Sierra Club, and the Center for Biological Diversity (collectively, the “plaintiffs“), filed this civil action for declaratory and injunctive relief against the United States Department of the Interior (the “Department“); David Bernhardt, in his official capacity as the Secretary of the Interior (the “Secretary“); Casey Hammond1, in his official capacity as the Acting Assistant Secretary of Land and Minerals Management; and the Bureau of Ocean Energy Management (“BOEM“) (collectively, the “federal defendants“), “challeng[ing] the [allegedly] unlawful decisions by [the federal defendants] to hold Offshore Lease Sale[] 250 [(‘Lease Sale 250‘)] and [Offshore Lease Sale] 251 [(‘Lease Sale 251‘)] in the Gulf of Mexico in reliance on arbitrary environmental analyses” pursuant to the
A. Statutory and Regulatory Background
1. The NEPA
Congress enacted the NEPA for the purpose of “promot[ing] efforts which will prevent or eliminate damage to the environment and biosphere[.]”
in every recommendation or report on . . . major [f]ederal actions significantly affecting the quality of the human environment, a detailed statement by the responsible official on—(i) the environmental impact of the proposed action, (ii) any adverse environmental effects which cannot be avoided should the proposal be implemented, [and] (iii) alternatives to the proposed action[.]
Where NEPA analysis is required, its role is primarily information-forcing . . . . It is now well-established that [the] NEPA imposes only procedural requirements on federal agencies with a particular focus on requiring agencies to undertake analyses of the environmental impact of their proposals and actions. It is equally clear that [the] NEPA does not impose a duty on agencies to include in every EIS a detailed explanation of specific measures which will be employed to mitigate the adverse impacts of a proposed action.
2. The Outer Continental Shelf Lands Act
“The Outer Continental Shelf is an area of submerged lands, subsoil, and seabed that lies between the outer seaward reaches of a state‘s jurisdiction and that of the United States.” Ctr. for Biological Diversity v. U.S. Dep‘t of the Interior, 563 F.3d 466, 472 (D.C. Cir. 2009). The Outer Continental Shelf Lands Act (“OCSLA“),
OCSLA‘s mandate that [the] [Department] manage mineral leases in the Outer Continental Shelf encompasses four distinct stages of regulatory responsibility: (1) formulation of a five year leasing plan by the Department . . . ; (2) lease sales; (3) exploration by lessees; [and] (4) development and production. Each stage involves separate regulatory review[,] and it is well established that [the] NEPA‘s requirements apply of their own force to each stage of the OCSLA regulatory process.
Ctr. for Biological Diversity v. Zinke, 260 F. Supp. 3d 11, 18 (D.D.C. 2017) (fourth and fifth alterations in original) (citation and internal quotation marks omitted). Relevant to this case,
B. Factual Background
1. The Parties
The plaintiffs are three environmental non-profits and networks, see Compl. ¶¶ 13-15; cf. Fed. Defs.’ Answer ¶¶ 13-15; API‘s Answer ¶¶ 13-15; Chevron‘s Answer ¶¶ 13-15, and the federal defendants are the agencies and officials charged with administering lease sales under the OCSLA, see Compl. ¶¶ 17-20; Fed. Defs.’ Answer ¶¶ 17-20; API‘s Answer ¶¶ 17-20; Chevron‘s Answer ¶¶ 17-20. Specifically, (1) the Department is “the federal department with authority, through the Secretary, under [the] OCSLA to hold lease sales for oil and gas rights on the Outer Continental Shelf and to issue leases[,]” Compl. ¶ 19; cf. Fed. Defs.’ Answer ¶ 19; API‘s Answer ¶ 19; Chevron‘s Answer ¶ 19; (2) the Secretary “is the chief officer of the Department ... charged with overseeing the proper administration and implementation of the . . . OCSLA[,]” Compl. ¶ 17; cf. Fed. Defs.’ Answer ¶ 17; API‘s Answer ¶ 17; Chevron‘s Answer ¶ 17; (3) the BOEM “is the federal agency within the Department . . . to which the Secretary has delegated authority under [the] OCSLA to hold lease sales for oil and gas rights on the Outer Continental Shelf[,]” id. ¶ 20; cf. Fed. Defs.’ Answer ¶ 20; API‘s Answer ¶ 20; Chevron‘s Answer ¶ 20; and (4) the Assistant Secretary of Land and Minerals Management “is the official to whom the Secretary delegated authority to sign records of decision to hold lease sales under [the] OCSLA[,]” id. ¶ 18; cf. Fed. Defs.’ Answer ¶ 18; API‘s Answer ¶ 18; Chevron‘s Answer ¶ 18. API is a “trade association of the oil and natural gas industry[,]” whose “members are deeply engaged in the exploration for and development of offshore oil and gas resources as
2. Lease Sales 250 and 251
In November 2016, the Department began developing the 2017-2022 Five Year Outer Continental Shelf Leasing Program (the “2017-2022 program“), which proposed “a schedule of [eleven] potential lease sales in four [Outer Continental Shelf] planning areas[,] [including] ten sales in the [Gulf of Mexico] Program Area.” AR 4269. Lease Sales 250 and 251, the subjects of the plaintiffs’ legal challenge, were included in the 2017-2022 program proposed lease sale schedule. See AR 4269. On January 19, 2017, the Department approved the 2017-2022 program. See Record of Decision for the 2017-2022 Outer Continental Shelf Oil and Gas Leasing Program Final Programmatic Environmental Impact Statement; MMAA104000, 82 Fed. Reg. 6643, 6643 (Jan. 19, 2017). The BOEM prepared three EISs in connection with Lease Sales 250 and 251: (1) the Outer Continental Shelf Oil and Gas Leasing Program: 2017-2022 Final Programmatic EIS (the “Programmatic EIS“), see AR 14,242-15,179, which was issued in November 2016, see AR 14,242; (2) the Gulf of Mexico OCS Oil and Gas Lease Sales: 2017-2022 Gulf of Mexico Lease Sales 249, 250, 251, 252, 253, 254, 256, 257, 259, and 261 Final Multistate EIS (the “Multistate EIS“), see AR 5417-7274, which was issued in March 2017, see AR 5419; and (3) the Gulf of Mexico OCS Lease Sale Final Supplemental Environmental Impact Statement 2018 (the “Supplemental EIS“), see AR 15,471-16,365, which was issued in December 2017, see AR 15,473. “The Supplemental EIS tier[ed] from and update[ed] the . . . Multistate EIS[] and incorporate[d] by reference all of the relevant material in
a. The No Action Alternative
The Supplemental EIS “contains analyses of the potential environmental impacts that could result from a proposed regionwide lease sale in the Gulf of Mexico as scheduled in the 2017-2022 ... program[,]” AR 15,551, to “inform decisions for . . . [L]ease [S]ales [250 and 251] scheduled in 2018[,]” AR 15,552. The Supplemental EIS contains an alternatives section “outlining the alternatives that [were] considered for th[e] environmental analysis.” AR 15,553. The alternatives section includes five alternatives: Alternatives A, B, C, D, and E. See AR 15,553-60 (discussing Alternatives A to E). Relevant to the plaintiffs’ challenge are Alternatives A and E. “Alternative A [ ] allow[s] for a proposed regionwide lease sale encompassing all three planning areas within the [United States] portion of the Gulf of Mexico [Outer Continental Shelf][,]” AR 15,553, while Alternative E (the “no action alternative“) is “the cancellation of a single proposed [Gulf of Mexico] lease sale within the 2017-2022 [ ] [p]rogram[,]” AR 15,559. The no action alternative states:
The opportunity for development of the estimated oil and gas that could have resulted from a proposed action (i.e., a single proposed lease sale) or alternative to the proposed action, as described above, would be precluded or postponed to a future lease sale. Any potential environmental impacts resulting from a proposed lease sale would not occur. Activities related to previously issued leases and permits (as well as those that may be issued in the future under a separate decision) related to the [Outer Continental Shelf] Oil and Gas Program would continue. If a lease sale were to be cancelled, the resulting development of oil and gas would most likely be postponed to a future lease sale; therefore, the cumulative level of [Outer Continental Shelf] oil- and gas related activity would only be reduced by a small percentage, if any. Therefore, the cancellation of a proposed lease sale would not significantly change the environmental impacts of overall [Outer Continental Shelf] oil- and gas-related activity.
AR 15,559-60.
b. The BSEE Safety Rules
In 2016, the BSEE3 implemented two offshore safety regulations: (1) the Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Blowout Preventer Systems and Well Control rule (the “Well Control Rule“), which “focuses on blowout preventer and well-control requirements,” Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Blowout Preventer Systems and Well Control, 81 Fed. Reg. 25,887, 25,888 (Apr. 29, 2016), and (2) the Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Oil and Gas Production Safety Systems rule (the “Production Safety Rule“), which “amend[ed] and update[ed] the regulations regarding oil and natural gas production safety on the Outer Continental Shelf[,]” Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Oil and Gas Production Safety Systems, 81 Fed. Reg. 61,833, 61,834 (Sept. 7, 2016) (collectively, the “safety rules“).
On December 29, 2017, the BSEE proposed to amend the Production Safety Rule “to amend, revise, or remove current regulatory provisions that create[d] unnecessary burden on stakeholders while maintaining or advancing the level of safety and environmental protection.”
Additionally, in February 2017, the United States Government Accountability Office (“GAO“) issued a report evaluating “[thirty-two] high-risk areas[,]” HIGH-RISK SERIES: Progress on Many High-Risk Areas, While Substantial Efforts Needed on Others, U.S. Gov‘t Accountability Office (Feb. 2017), https://www.gao.gov/assets/690/682765.pdf (the “GAO report“),4 including the “management of federal oil and gas resources[,]” AR 27,101 (capitalization removed). The GAO report stated that the BSEE “had undertaken various reform efforts since its creation in 2011, but had not fully addressed deficiencies in its investigative, environmental compliance, and enforcement capabilities identified by investigations after the Deepwater Horizon incident.”5 AR 27,102. Specifically, the GAO report found that the “BSEE‘s ongoing restructuring has made limited progress in enhancing its enforcement capabilities” because the “BSEE has not developed procedures with criteria to guide how it uses enforcement tools—such as warnings and fines—which are among the goals of [the] BSEE‘s restructuring[.]” AR 27,103. “To address risk of the effectiveness of [the] BSEE‘s investigations, . . [the GAO] recommended that [the] BSEE complete policies outlining the responsibilities of investigations, environmental compliance, and enforcement programs, and
c. The Royalty Rate
In March 2008, the BOEM set the royalty rate for “[Gulf of Mexico] leases in all water depths . . . [at] 18.75%.” AR 10. On June 27, 2017, the then-Acting Assistant Secretary of Land and Minerals Management “set the royalty rate for [Gulf of Mexico] leases situated in less than 200 meters of water at 12.5% [ ] for [ ] lease sale[s] and maintain[ed] the royalty rate for leases situated in 200 meters of water and deeper at 18.75[%] [ ].” AR 9. Although “the lower royalty rate in shallow water [was] expected to increase activity[,]” AR 10, the BOEM represented that “given that shallow water comprises a small percentage of aggregate [Gulf of Mexico] production, leasing activity, and revenues, the aggregate impacts of this change are expected to be minimal[,]” AR 7. Despite the change in the royalty rate for shallow waters, the EISs prepared by the BOEM, including the Supplemental EIS, which was issued in December 2017 after the royalty rate change, see AR 15,473, forecasted lease sale activity using the higher 18.75% royalty rate, cf. AR 4132. In response to a concern raised by one of the plaintiffs regarding “the reduction of the royalty rate from 18.75% to 12.5% for leases situated in water depths less than 200 meters[,]” AR 16,580, the BOEM thereafter “reanalyzed the forecasted oil and gas exploration, discovery, development, and production activity expected from a proposed sale lease following the reduction in royalty rates from 18.75% to 12.5% for leases in water 200
3. This Litigation
On July 16, 2018, shortly after the record of decision for Lease Sale 251 was issued, see AR 16,899 (indicating that the record of decision for Lease Sale 251 was issued on June 28, 2018), the plaintiffs initiated this civil action against the federal defendants, see Compl. at 1. The intervenor-defendants subsequently moved to intervene in support of the federal defendants, and the Court granted both of their motions to intervene. See Order at 13 (Dec. 7, 2018), ECF No. 35. The plaintiffs thereafter filed their motion for summary judgment, see generally Pls.’ Mot., and the federal defendants and the intervenor-defendants filed their cross-motions for summary judgment, see generally Fed. Defs.’ Mot.; API‘s Mot.; Chevron‘s Mot. These motions are the subjects of this Memorandum Opinion.
“A party is entitled to summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
The “NEPA lack[s] a specific statutory review provision and, consequently, challenges alleging violations of th[is] statute are brought pursuant to the APA.” Am. Wild Horse Campaign v. Bernhardt, --- F. Supp. 3d ---, Civ. Action No. 18-1529 (BAH), 2020 WL 736772, at *6 (D.D.C. Feb. 13, 2020); see Indian River Cty., 945 F.3d at 527 (explaining that “judicial review under . . . [the NEPA] is governed by the APA” because the NEPA does not “suppl[y] a private right of action“). In the APA context, summary judgment is the mechanism for deciding whether, as a matter of law, an agency action is supported by the administrative record and is otherwise consistent with the APA standard of review. See, e.g., Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415-16 (1971), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977). But, due to the limited role a district court plays in reviewing the administrative record, the typical summary judgment standards set forth in
The APA “sets forth the full extent of judicial authority to review executive agency action for procedural correctness.” Fed. Commc‘ns Comm‘n v. Fox Television Stations, Inc., 556 U.S. 502, 513 (2009). It requires district courts to “hold unlawful and set aside agency action, findings, and conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not accordance with law[.]”
III. ANALYSIS
The plaintiffs argue that summary judgment should be awarded to them because the BOEM (1) “irrationally and unlawfully assumed that the same environmental effects would occur even if it did not hold the lease sales[,]” Pls.’ Mem. at 23 (capitalization removed), and
The Court will first address whether the BOEM satisfied its obligations under the NEPA. Specifically, the Court will consider (1) whether the BOEM considered a true no action alternative and (2) whether the BOEM took a hard look at the effects of Lease Sales 250 and 251 on the environment. Then, if the Court concludes that the BOEM did not satisfy its NEPA obligations, the Court will address whether the plaintiffs have established that they are entitled to the relief that they seek.
A. Whether the BOEM Considered a True No Action Alternative
The plaintiffs argue that the federal defendants “irrationally and unlawfully assumed that the same environmental effects would occur even if it did not hold the lease sales[,]” Pls.’ Mem. at 23 (capitalization removed), because the “BOEM failed to evaluate a true no action alternative by assuming the same leases and resulting development would occur in the future[,]” id. at 25 (capitalization removed), and “irrationally assumed that future leasing would result in the same
An EIS “should present the environmental impacts of the proposal and the alternatives of comparative form [(the ‘alternatives section‘)], thus sharply defining the issues and providing a clear basis for choice among options by the decisionmaker and the public.”
The Council on Environmental Quality6 has provided some guidance as to what the [n]o [a]ction [a]lternative discussion should include: [I]n instances involving federal decisions on proposals for projects[,] [n]o action . . . would mean the proposed activity would not take place and the resulting environmental effects from taking no action would be compared with the effects of permitting the proposed activity or an alternative activity to go forward. Where a choice of no action by the agency would result in predicable actions by others, this consequence of the no action alternative should be included in the analysis. For example, if denial of permission to build a railroad to a facility would lead to construction of a road and increased truck traffic, the EIS should analyze this consequence of the no action alternative.
Hammond v. Norton, 370 F. Supp. 2d 226, 241 (D.D.C. 2005) (fifth, sixth, and eighth alterations in original) (internal quotation marks omitted).
As the federal defendants correctly note, another member of this Court, when “[p]resented with nearly identical language and explanations” in a supplemental EIS issued by
Here, like the Oceana court, this Court concludes that the “BOEM did consider a true no action alternative as mandated by [the] NEPA, and that its analysis was reasonable.” Id. at 172. As a preliminary matter, the Court agrees with the federal defendants’ position that the no action alternatives at issue in Oceana and in this case are “nearly identical.” Fed. Defs.’ Mem. at 10. Compare Oceana, 37 F. Supp. 3d at 171-72 (“Alternative D is the cancellation of the proposed [Central Planning Area] lease sale. The opportunity for development of . . . gas that could have resulted from the proposed lease sale would be precluded or postponed. Any potential environmental impacts resulting from the proposed lease sale would not occur or would be postponed . . . . [T]he resulting development of oil and gas would most likely be postponed to a future sale; therefore, the overall level of [Outer Continental Shelf] activity in the [Central Planning Area] would only be reduced to a small percentage, if any. Therefore, the cancellation of the proposed lease sale would not significantly change the environmental impacts of overall [Outer Continental Shelf] activity.” (internal quotation marks omitted)), with AR 15,559-60 (“Alternative E is the cancellation of a single proposed [Gulf of Mexico] lease sale within the 2017-2022 [ ] [p]rogram. The opportunity for development of the estimated oil and gas that could have resulted from a proposed action (i.e., a single proposed lease) or alternative to the proposed action[] . . . would be precluded or postponed to a future lease sale . . . . If a lease sale were to be cancelled, the resulting development of oil and gas would most likely be postponed to a future lease sale; therefore, the cumulative level of [Outer Continental Shelf] oil- and gas related activity would only be reduced by a small percentage, if any. Therefore, the cancellation of a proposed lease sale would not significantly change the environmental impacts of overall [Outer Continental Shelf] oil- and gas-related activity.“).
This Court, like the Oceana court, finds that the BOEM‘s conclusion that “[i]f a lease sale were to be cancelled, the resulting development of oil and gas would most likely be postponed to a future lease sale” and “the cumulative level of [Outer Continental Shelf] oil- and gas-related activity would only be reduced by a small percentage, if any[,]” AR 15,559-60, is reasonable, considering that that (1) “the Gulf of Mexico is a hotbed for oil and gas leases generally[,]” Oceana, 37 F. Supp. 3d at 172; (2) the “BOEM is statutorily tasked with developing the [Outer Continental Shelf][,]” id.; and (3) “[i]t is [ ] very likely that even if th[e] particular lease[s] [at issue] w[ere] cancelled, []other lease[s] in the same area would likely present the same environmental risks, albeit further into the future[,]” id. at 172 n.24, because “multiple future lease sales [in the Gulf of Mexico] are scheduled under the existing [ ] [2017-2022] [p]rogram developed pursuant to
The plaintiffs’ counterarguments are unavailing. The plaintiffs first argue that the holding in Oceana “was based on an incorrect interpretation of [the] OCSLA that it ‘mandates’ [the] BOEM to ‘implement lease sales[,]” and that the “OCSLA mandates no such thing.” Pls.’ Mem. at 27 (quoting Oceana, 37 F. Supp. 3d at 174). The OCSLA “requires the Secretary . . . to maintain a comprehensive oil and gas leasing program to implement the policies of the [OCSLA].” Energy Action Educ. Found. v. Andrus, 516 F. Supp. 90, 93 (D.D.C. 1980). While the plaintiffs are correct that the OCSLA does not mandate the approval of every proposed lease sale, see Kerr-McGee Corp. v. Watt, 517 F. Supp. 1209, 1210 (D.D.C. 1981) (“The implementing regulations for the [OCSLA] provide that ‘[t]he United States reserves the right to reject any and all bids received for any tract, regardless of the amount offered.” (quoting 43
The plaintiffs next argue that the “BOEM did not evaluate how holding the proposed lease sales would compare with delaying the effects until later in time[] when the lease sale offerings, demand and supply, and lease bidding patterns will [be] different[,]” Pls.’ Mem. at 29, and that other “[c]ourts have rejected similar environmental analyses when the agency relied on faulty assumptions about its no action alternative in the face of differing future conditions[,]” id. at 30 (citing N.C. Wildlife Fed‘n v. N.C. Dep‘t of Transp., 677 F.3d 596 (4th Cir. 2012); Ctr. for Biological Diversity v. U.S. Dep‘t of the Interior, 623 F.3d 633 (9th Cir. 2010)). In North Carolina Wildlife Federation, the Fourth Circuit concluded that the agencies “failed to take the required hard look at environmental consequences[,]” as required under the NEPA, because they relied on certain data that included underlying assumptions “without disclosing the data‘s
The Court finds that the plaintiffs’ reliance on the North Carolina Wildlife Federation and Center for Biological Diversity cases is misplaced and that those cases are distinguishable from this case. Unlike the underlying assumptions relied upon by the agencies in North Carolina Wildlife Federation, which were not disclosed in the EIS, see 677 F.3d at 605, here, the underlying assumption that the effects of holding the lease sales now, as opposed to sometime in the future, are virtually the same was disclosed in the Supplemental EIS, cf. AR 15,584 (stating that the projected effects of holding a lease sale are calculated “over the [fifty]-year analysis period of 2017–2066“). Moreover, unlike the underlying assumptions in Center for Biological
Accordingly, the Court concludes that the BOEM considered a true no action alternative.
B. Whether the Federal Defendants Took a Hard Look at the Effects of the Lease Sales on the Environment
The plaintiffs next argue that the BOEM “failed to rationally assess the effects of the lease sales on the environment[.]” Pls.’ Mem. at 32 (capitalization removed). Specifically, they argue that the BOEM‘s reliance on safety rules promulgated by the BSEE was arbitrary and capricious because the “BOEM knew at the time that [the Department] was repealing substantial portions of these reforms, largely erasing the safety gains[,]” Pls.’ Mem. at 32, and the “BSEE‘s enforcement and inspection programs are anything but rigorous[,]” id. at 40. They further argue that the BOEM‘s use of the 18.75% royalty rate was arbitrary and capricious because the “use of the inaccurately higher royalty rate arbitrarily and capriciously skewed [the BOEM‘s] estimated levels of development and production lower, impeding a full and fair discussion of the potential
1. Whether the BOEM‘s Reliance on the BSEE‘s Safety Rules was Arbitrary and Capricious
The plaintiffs argue that the BOEM‘s reliance in the Supplemental EIS on the BSEE‘s safety rules was arbitrary and capricious because the BOEM “knew at the time [it was preparing the Supplemental EIS] that [the Department] was repealing large portions of these reforms, largely erasing the safety gains[,]” Pls.’ Mem. at 32, and because the GAO report purportedly found that the “BSEE‘s enforcement and inspection programs [were] anything but rigorous[,]” id. at 40, and “[w]hen commenters confronted [the] BOEM with the incongruity between its analyses and the [GAO] report, [the] BOEM expressly declined to even consider the report[,]” id. at 40–41. The federal defendants respond that the “BOEM was not required to consider proposed amendments to rules[,]” Fed. Defs.’ Mem. at 14, and that, “[r]egardless, the proposed amendments d[id] not propose to eliminate safety and environmental regulations[,]” id. at 16.
established point of law that proposed regulations . . . have no legal effect. By design, rulemaking—proposed rules, followed by notice and comment, leading to final rules—is a process of graduated decision-making resulting in final regulations. It would make little sense for [ ] [a] court to short-circuit the process by giving effect to what were merely meant to be proposed regulations.
Sweet v. Sheahan, 235 F.3d 80, 87 (2d Cir. 2000) (citations omitted); see United States v. Springer, 354 F.3d 772, 776 (8th Cir. 2004) (“A major purpose of formal rulemaking is to ensure that agencies gather as much relevant information before promulgating final rules that will have the force and effect of law. For this reason, an agency that exercises its discretion to propose a rule has no duty to promulgate its proposal as a final rule. Thus, it is well-settled ‘that proposed regulations . . . have no legal effect.‘” (quoting Sweet, 235 F.3d at 87)).
The omission of speculative information from an environmental impact statement prepared at the lease sale stage is permissible; however, an environmental impact statement which is incomplete due to the omission of ascertainable facts, or the inclusion of erroneous information, violates the disclosure requirement of
42 U.S.C. § 4332(2)(C) . The rule of reason requires that consideration be given topractical limitations on the agency‘s analysis, such as the information available at the time.
Wilderness Soc‘y v. Salazar, 603 F. Supp. 2d 52, 60–61 (D.D.C. 2009) (citation and internal quotation marks omitted).
Here, as the federal defendants correctly note, see Fed. Defs.’ Mem. at 15 n.5, the BSEE‘s rules that the BOEM relied on in its Supplemental EIS were still in effect when the Supplemental EIS was issued, compare AR 15,473 (indicating that the Supplemental EIS was issued in December 2017), with
The Court next addresses whether the BOEM‘s reliance on the BSEE‘s rules was arbitrary and capricious in light of the GAO report purportedly finding that the “BSEE‘s enforcement and inspection programs [were] anything but rigorous.” Pls.’ Mem. at 40. As a preliminary matter, “an agency may properly base its evaluation of environmental impacts on the
Accordingly, the Court concludes that the BOEM‘s reliance on the BSEE‘s safety regulations was not arbitrary and capricious.
2. Whether the BOEM‘s Use of the 18.75% Royalty Rate was Arbitrary and Capricious
The plaintiffs next allege that the “BOEM stated that it presumed an 18.75% shallow-water royalty rate when it estimated activity levels, despite the fact that [the Department] had reduced that rate to 12.5% explicitly to increase bidding and lease activity.” Pls.’ Mem. at 42. They argue that the BOEM‘s use of the 18.75% royalty rate was arbitrary and capricious because the “use of the inaccurately higher royalty rate arbitrarily and capriciously skewed [the BOEM‘s] estimated levels of development and production lower, impeding a full and fair discussion of the potential effects of the lease sales[,]” id. (internal quotation marks omitted), and the BOEM “attempted to paper over [its] erroneous effects analysis at the last minute before Lease Sale 251 in the Record of Decision[,]” id. The federal defendants respond that the BOEM‘s use of the 18.75% royalty rate, rather than a 12.5% royalty rate, and failure to include a discussion of the 12.5% royalty rate in the Supplemental EIS was not arbitrary and capricious because “the reduction was not a ‘substantial change in the proposed action’ or a ‘significant new circumstance’ that would require supplementation of an EIS under the Council on Environmental Quality Regulations[,]” Fed. Defs.’ Mem. at 25 (quoting
The Supreme Court has explained that under the rule of reason, “an agency need not supplement an EIS every time new information comes to light after the EIS is finalized.” Rather, “a supplemental EIS must be prepared” only when a new action will affect the quality of the environment “in a significant manner or to a significant extent not already considered.” Courts must also defer to the agency‘s “informed discretion about whether to prepare a supplemental EIS because it requires ‘substantial agency expertise.‘” That said, “courts should not automatically defer
Stand Up for Cal.! v. U.S. Dep‘t of Interior, 410 F. Supp. 3d 39, 57 (D.D.C. 2019) (citations omitted) (quoting Marsh v. Or. Nat. Res. Council, 490 U.S. 360, 373, 374, 376–77, 378 (1989)). “The overarching question is whether an EIS‘s deficiencies are significant enough to undermine informed public comment and informed decisionmaking.” Sierra Club v. Fed. Energy Reg. Comm‘n, 867 F.3d 1357, 1368 (D.C. Cir. 2017).
In evaluating an agency‘s decision not to prepare a supplemental EIS, courts employ a two-step inquiry. First, the court must evaluate whether the agency took a hard look at the proffered new information. Next, if the agency did take a hard look, the court must then determine whether the agency‘s decision not to prepare a supplemental EIS was arbitrary or capricious.
Chem. Weapons Working Grp. v. U.S. Dep‘t of Def., 655 F. Supp. 2d 18, 34–35 (D.D.C. 2009) (citations and internal quotation marks omitted).
As to the first step of this inquiry, “whether the [BOEM] took a hard look at the proffered new information[,]”
[w]hen applying the hard look test, courts may consider whether the agency obtains opinions from its own experts, obtains opinions from experts outside the agency, gives careful scientific scrutiny, and responds to all legitimate concerns that are raised. If the agency does take a hard look at new information and concludes the information is insignificant, the agency should provide a reasoned explanation for this conclusion.
Id. at 35 (citation and internal quotation marks omitted). “The determination as to whether information is either new or significant ‘requires a high level of technical expertise‘; thus, [the Court] ‘defer[s] to the informed discretion of the [agency].‘” Blue Ridge Envtl. Def. League v. Nuclear Reg. Comm‘n, 716 F.3d 183, 197 (D.C. Cir. 2013) (quoting Marsh, 490 U.S. at 377).
Here, in response to a concern raised by one of the plaintiffs regarding “the reduction of the royalty rate from 18.75% to 12.5% for leases situated in water depths less than 200 meters[,]” AR 16,580, the BOEM considered the issue and concluded that
any increase in activity would be minimal and that the range of anticipated production volumes and activity-level estimates that appear in the 2017–2022 [p]rogram, []EIS[][,] and supplemental EIS specific to . . . Lease Sale[s] 250 and 251 for leases to be awarded and anticipated to be awarded in water depths less than 200 meters remain current[,]
AR 16,580–81. This conclusion was based on an evaluation by the BOEM‘s Office of Resource Evaluation, “us[ing] a series of spreadsheet-based models to estimate the range of anticipated oil and natural gas production volumes and associated levels of exploration, development[,] and decommissioning activity on a per lease sale basis.” AR 16,581. The spreadsheet-based models utilized “information regarding ‘[h]istorical lease sale specific leasing activity and trends, number of discoveries, discovery volumes and production volumes, drilling activity and trends, platform installations and decommissioning activity, oil and gas prices[,] and activity costs[,]’ and ‘[t]he resulting forecast [was] analyzed and compared to actual historical data to [e]nsure that historical precedent and recent trends [we]re reflected in each activity forecast.” AR 16,581.
Here, the BOEM “obtain[ed] [an] opinion[] from its own expert[],” Chem. Weapons Working Grp., 655 F. Supp. 2d at 35, the Office of Resource Evaluation, see AR 16,581, which is qualified to offer the opinion it provided, see Resource Evaluation Program, U.S. Dep‘t of the Interior Bureau of Ocean & Energy Mgmt., https://www.boem.gov/oil-gas-energy/resource-evaluation (last visited Apr. 21, 2020) (explaining that the “Resource Evaluation Program [ ] support[s] all BOEM program areas, both energy and non-energy, through critical technical and economic analysis” and is responsible for, inter alia, “[a]nalyzing Geological and Geophysical data in order to determine the volume and the nature of potential hydrocarbon accumulations, the
As to the second step of the inquiry, “whether the [BOEM‘s] decision not to prepare a
Because the Court has concluded that the BOEM has satisfied its obligations under the NEPA and the plaintiffs are not entitled to the relief that they seek, the Court will deny the plaintiffs’ motion for summary judgment and grant the federal defendants’ and the intervenor-defendants’ cross-motions for summary judgment.9
IV. CONCLUSION
For the foregoing reasons, the Court concludes that the BOEM did not act arbitrarily and capriciously in preparing the no action alternative, by relying on the BSEE‘s safety rules, or by choosing not to supplement the Supplemental EIS with the 12.5% royalty rate. Therefore, the Court will deny the plaintiffs’ motion for summary judgment and grant the federal defendants’ and the intervenor-defendants’ cross-motions for summary judgment.
SO ORDERED this 21st day of April, 2020.10
REGGIE B. WALTON
United States District Judge