WildEarth Guardians v. Zinke, 1:16-cv-01724 (RC) D.D.C. (19 March 2019)

Climate Change Greenhouse gases Litigation
Oil & Gas

WildEarth Guardians v. Zinke, Civ. No. 16-1724(RC) (D. Wyo., Mar. 19, 2019)

In 2015 and 2016, the U.S. Bureau of Land Management (BLM) awarded several hundred oil and gas leases in the states of Wyoming, Utah, and Colorado.  These leases opened more than 460,000 acres of land in the three states to potential oil and gas development.  Prior to auctioning the leases, BLM prepared environmental assessments (EAs) evaluating the potential environmental effects of particular groups of leases, including impacts to the climate.  EAs are less-detailed analyses that are used to determine whether a full environmental impact statement (EIS) is necessary under the National Environmental Policy Act (NEPA) and its implementing regulations.  In each instance, BLM decided that the leases would not cause significant impacts to the environment and declined to prepare an EIS.

Two organizations, WildEarth Guardians and Physicians for Social Responsibility, challenged BLM’s leasing decisions, alleging that the agency failed to adequately quantify the climate change impacts of the oil and gas leases, and acted arbitrarily when it declined to prepare EISs for the various groups of leases.  Although the plaintiff organizations challenged BLM’s approval and issuance of the leases across all three states, the U.S. District Court for the District of Wyoming focused exclusively on the 282 leases issued in the state of Wyoming.  For these leases, BLM prepared nine EAs.

NEPA requires U.S. government agencies to take a “hard look” at the environmental consequences of a proposed action, including its direct, indirect, and cumulative environmental effects. 40 C.F.R. §§ 1501.3, 1501.4, 1508.13.  The plaintiff organizations argued that the BLM’s climate impact analysis in the EAs at each of these levels (direct, indirect, cumulative) was insufficient.

The District Court first addressed whether BLM could defer the climate impact analysis to a later stage of the permitting process. Oil and gas leasing on U.S. government-owned land typically follows a three-stage process: 1) land-use planning; 2) leasing; and 3) drilling.  After a lease is issued and before drilling begins, the lessee must apply for a permit to drill, known as an “APD.”  At this last step, BLM may conduct additional environmental analysis and impose conditions on drilling activities.  See Slip Op., pp. 6-7 (describing U.S. oil and gas permitting framework).  The BLM urged the Court to allow it to wait until the drilling stage to evaluate climate impacts.

The Court did not accept this argument. It agreed with the plaintiff organizations that once a lease is issued, BLM cannot prevent oil and gas drilling from occurring; therefore, the lease marks a point where the agency has made an irretrievable commitment of resources.  The Court explained: “[A]n agency cannot defer analyzing the reasonably foreseeable environmental impacts of an activity past the point when that activity can be precluded.”  Slip op., p. 26.  The Court continued:  “While it may be true that after the leasing stage the BLM can impose conditions to limit and mitigate GHG emissions and other environmental impacts . . . the leasing stage is the point of no return with respect to emissions.”  Id., p. 27 (emphasis in original).

The District Court clarified, however, that BLM would not be required to look at the site-specific climate impacts of individual leases because, at the leasing stage, the agency does not know what type of wells might be drilled or the drilling technology that a lessee will use.  Id., p. 28.  Instead, the Court concluded that it would be appropriate to expect the BLM to forecast the GHG emissions of oil and gas drilling across the leased parcels as a whole (e.g., aggregated).  Id., p. 29.

Direct Effects

None of the EAs for the proposed oil and gas lease sales in the state of Wyoming included estimates of drilling-related GHG emissions. BLM argued it could not quantify projected GHG emissions at the lease stage because the analysis would be too speculative.  The District Court rejected this argument, noting:

BLM had at its disposal estimates of (1) the number of wells to be developed; (2) the GHG emissions produced by each well; (3) the GHG emissions produced by all wells overseen by certain field offices; and (4) the GHG produced by all wells in the state.  With this data, BLM could have reasonably forecasted, by multiple methods, the GHG emissions to be produced by wells on the leased parcels.  

Id., p. 32.

The District Court was not sympathetic to BLM’s arguments that GHG emissions would be difficult to forecast due to potential changes in future demand for oil and gas and uncertainty about the specific drilling methodologies for each well.  The Court responded: “BLM could have expressed the forecasts as ranges, and it could have explained the uncertainties underlying the forecasts, but it was not entitled to simply throw up its hands and ascribe any effort at quantification to a crystal ball inquiry.”  Id., p. 33 (internal quotation omitted).

Because BLM could have reasonably estimated potential GHG emissions from oil and gas drilling in the aggregate, it could not rely solely on generalized, qualitative discussions of the potential environmental impacts of those emissions.  According to the Court: “[W]hile BLM’s qualitative discussions of GHG emissions and climate change on doubt contributed to informed decisionmaking, they alone were not enough.”  Id., p. 35.

Ÿ  Indirect (Downstream) Effects

The plaintiff organizations argued that BLM failed to acknowledge the GHG emissions and associated climate impacts generated by downstream use of oil and gas extracted from the leased parcels.  BLM countered that it was not required to address this issue in the EAs because emissions from future use of oil and gas products are too attenuated at the leasing stage and are therefore not an indirect effect of leasing decisions.  BLM also pointed to vague and generalized statements in the EAs that oil and gas combustion increases GHG emissions and contributes to climate change, arguing that these statements sufficiently addressed the downstream impacts.

The Court disagreed with BLM. Because the purpose of the lease program is to produce oil and gas for consumption, the lease sales are a “legally relevant cause” of downstream GHG emissions. Id., p. 39.  For that reason, according to the Court, it is important for BLM to understand the scope of downstream GHG emissions because BLM is authorized by law to decline to sell the oil and gas leases “if the environmental impacts of those leases – including use of the oil and gas produced – would not be in the public’s long-term interest.”  Id.

The Court then discussed the requisite level of detail for the analysis of indirect climate impacts.  The plaintiff organizations advocated for a rigorous quantitative analysis while BLM argued that it could not be expected to provide anything more than a general narrative.  Id., p. 41-42.  The Court took a position in the middle.  It directed BLM to strengthen its discussion of the environmental effects of downstream oil and gas use and to consider whether quantifying downstream GHG emissions is reasonably possible or helpful.  Id., p. 42-43. If BLM foregoes emissions quantification, “it must thoroughly explain that decision,” as well as any decision to ignore or discount estimates provided by a third party.  Id.

Ÿ  Cumulative Effects

The plaintiff organizations criticized the lack of specificity in the oil and gas leasing EAs concerning the cumulative effects of GHG emissions.  The regulations implementing NEPA define cumulative impact as “the incremental impact of the action when added to other past, present, and reasonable foreseeable actions regardless of what agency (Federal or non-Federal) or person undertakes such other actions.” 40 C.F.R. § 1508.7.  The plaintiff organizations claimed that BLM failed to adequately quantify the projected GHG emissions from the leased parcels added to other reasonably foreseeable oil and gas emissions on a regional, national, and global scale.  Id., p. 44.  They also argued that BLM should have applied two specific protocols – the social cost of carbon and the global carbon budget – to quantify the emissions’ cumulative impact on climate change. Id.

The District Court agreed that BLM’s cumulative impacts analysis was insufficient.  The EAs generally acknowledged the lease sales would contribute to global climate change and listed other active oil and gas wells in the vicinity, but none of the EAs quantified or forecasted GHG emissions arising from the leased parcels.  “Without access to a data-driven comparison of GHG emissions from the leased parcels to regional and national GHG emissions, the public and agency decisionmakers had no context [to conclude] that GHG emissions from the leased parcels would represent only an ‘incremental’ contribution to climate change.”  Id., p. 45.  The Court continued: “Although BLM may determine that each lease sale individually has a de minimus impact on climate change, the agency must also consider the cumulative impact of GHG emissions generated by past, present, or reasonably foreseeable BLM lease sales in the region and nation.”  Id., p. 46.

While the Court agreed with the plaintiff organizations that BLM’s cumulative impacts analysis was not robust enough, it stopped short of requiring BLM to use particular protocols or methodologies, such as the social cost of carbon or global carbon budget, to determine the impact of the lease sales on climate change.  The choice of methodology is left to the discretion of the agency.

Ÿ   Was an EIS Required?

The plaintiff organizations argued that BLM should have prepared full EISs for the lease sales instead of EAs.  Under NEPA, an EIS is required for any action that may significantly affect the environment.  42 U.S.C. § 4332(C).  The regulations implementing NEPA include a set of “significance factors” to guide the decision whether to prepare an EIS.  See 40 C.F.R. § 1508.27(b).  The Court determined that none of the significance factors were triggered by the oil and gas lease sales.

Ÿ   Conclusion

The District Court concluded that each EA for the leases failed to adequately evaluate the climate change impacts of oil and gas drilling.  The Court criticized BLM’s assertions that such analyses would be “overly speculative” at the leasing stage.  It explained: “Given the national, cumulative nature of climate change, considering each individual drilling project in a vacuum deprives the agency and the public of the context necessary to evaluate oil and gas drilling on federal land before irretrievably committing to that drilling.”  Id., p. 56.

Ÿ   Relief

The District Court declined to vacate the leases that had already been awarded.  Instead, it enjoined BLM from issuing any permits to drill (APDs) until it revised the EAs and reconsidered whether the leasing decisions would have a significant impact on the environment.  Id., pp. 58-60.