WILLIAM H. STEELE, Chief Judge.
This matter comes before the Court on Plaintiff's Motion for Summary Judgment (doc. 113), the Federal Defendants' Cross-Motion for Summary Judgment (doc. 118) and the Joint Motion for Summary Judgment of the American Petroleum Institute, Independent Petroleum Association of America, U.S. Oil and Gas Association, International Association of Drilling Contractors and Chevron USA, Inc. (doc. 117). These Motions have been the subject of extensive briefing, and are now ripe for disposition.
In all pertinent respects, the underlying facts of this matter are undisputed. Before examining those facts, however, it may be beneficial to summarize key statutory provisions governing the offshore oil leasing program at issue herein.
The purpose of the Outer Continental Shelf Lands Act, 43 U.S.C. §§ 1331 et seq. ("OCSLA") is "to establish federal ownership and control over the mineral wealth of the OCS and to provide for the development of those natural resources.... The OCSLA thus ... establishes a regulatory scheme governing leasing and operations there." EP Operating Ltd. Partnership v. Placid Oil Co., 26 F.3d 563, 566 (5th Cir. 1994); see also Center for Biological Diversity v. U.S. Dep't of Interior, 563 F.3d 466, 472 (D.C.Cir.2009) ("OCSLA establishes a procedural framework under which [the Secretary of the] Interior may lease areas of the OCS for purposes of exploring and developing the oil and gas deposits of the OCS's submerged lands."). When Congress amended OCSLA in 1978, it declared the policy of the United States to be that "the outer Continental Shelf is a vital national resource reserve held by the Federal Government for the public, which should be made available for expeditious and orderly development, subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other national needs." 43 U.S.C. § 1332(3).
Under OCSLA, as amended, Congress prescribed a sequence of "four distinct statutory stages to developing an offshore oil well: (1) formulation of a five year leasing plan by the Department of the Interior; (2) lease sales; (3) exploration by the lessees; (4) development and production." Secretary of the Interior v. California, 464 U.S. 312, 337, 104 S.Ct. 656, 78 L.Ed.2d 496 (1984); see also Center for Biological Diversity, 563 F.3d at 473 ("OCSLA provides that Interior undertake a four-stage process in order to develop an offshore oil well."). "The stated reason for this four part division was to forestall premature litigation regarding adverse environmental effects that all agree will flow, if
In April 2007, the Secretary of the Interior issued a proposed five-year program for oil and gas leasing on the Outer Continental Shelf from 2007-2012 (the "Five-Year Plan"). (AR, 50-194.)
In administering the Five-Year Plan, on March 12, 2009, the Department of the Interior's Bureau of Ocean Energy Management ("BOEM") issued a press release announcing that Lease Sale 213 would be conducted in New Orleans, Louisiana, on March 17, 2010, at which time BOEM would sell oil and gas leases encompassing 6,958 blocks located in federal waters at distances from three to more than 230 miles offshore, in water depths ranging from 10 to 11,200 feet. (AR, 200.) BOEM estimated that Lease Sale 213 would culminate in production of as many as 1.3 billion barrels of oil and 5.4 trillion cubic feet of natural gas from the Central Gulf of Mexico. (Id.) On February 12, 2010, BOEM published a "Final Notice of Sale 213" in the Federal Register, confirming that Lease Sale 213 would take place in New Orleans on March 17, 2010. (AR, 217-18, 247-55.)
Lease Sale 213 proceeded as scheduled. Indeed, on March 17, 2010, BOEM unsealed and publically announced some 642 bids on 468 tracts located in the central Gulf of Mexico offshore of Louisiana, Mississippi and Alabama, in varying depths of water and at various distances from the coast. (AR, 258, 575-78.)
That said, high bids are not automatically accepted for OCSLA leases; rather, they are subject to BOEM review and approval for adequacy, irregular bidding patterns, and so on. The agency carried out the regulatory process of review/approval/acceptance of bids on a rolling basis during the weeks and months following the March 17 sale in New Orleans. Thus, on March 31, 2010, BOEM accepted 85 bids as satisfactory in Phase 1 of the evaluation process for Lease Sale 213. (AR, 579-81.)
While BOEM performed the day-to-day task of administering Phase 2 of the bid approval process for Lease Sale 213 in April 2010, environmental disaster struck in the central Gulf of Mexico. On April 20, 2010, the Mobile Offshore Drilling Unit Deepwater Horizon exploded and sank in the Gulf, where it had been drilling a well some 52 miles from shore in nearly 5,000 feet of water. (AR, 9179.) Eleven workers at the site died. (Id.) Compounding the tragedy, crews were unable to secure the wellhead and staunch the flow of crude oil from that location for some time, as safety equipment designed to prevent major oil spills did not function as anticipated. (Id.) As a result, staggering quantities of crude oil (reaching into the millions of barrels, or the hundreds of millions of gallons) gushed into the Gulf from the Deepwater Horizon site for nearly three months before the wellhead was finally capped on July 15, 2010.
In the wake of the Deepwater Horizon incident, BOEM commenced a joint investigation with the U.S. Coast Guard and issued new safety recommendations to operators and drilling contractors. (AR, 9179.) In May 2010, the Department of the Interior issued a comprehensive set of recommendations, including "a series of steps immediately to improve the safety of offshore oil and gas drilling operations in Federal waters and a moratorium on certain permitting and drilling activities until the safety measures can be implemented and further analyses completed." (AR, 9181.) On May 28, 2010, the Secretary of the Interior made a specific finding "that offshore drilling of new deepwater wells poses an unacceptable threat of serious and irreparable harm to wildlife and the marine, coastal, and human environment," and also "determined that the installation of additional safety or environmental protection equipment is necessary to prevent injury or loss of life and damage to property and the environment." (AR, 9224.) In reliance on these findings, the Secretary directed a six-month suspension of all offshore drilling operations for new deepwater wells in the Gulf of Mexico and instructed BOEM not to "process any new applications for permits to drill consistent with this directive." (Id.) BOEM implemented these decisions on May 30, 2010 by issuing written notice of the moratorium to all lessees and operators of federal oil and gas leases in the OCS regions of the Gulf of Mexico. (AR, 9225-28.) In particular, BOEM notified lessees that they were "to cease drilling all new deepwater wells" (with "deepwater" defined as depths greater than 500 feet) and indicated that BOEM would not consider drilling permit applications for deepwater wells for the next six months. (Id.)
On July 12, 2010, the Secretary directed BOEM to impose new temporary suspensions of OCS deepwater drilling, based on "evidence that grows every day of the industry's inability in the deepwater to contain a catastrophic blowout, respond to an oil spill, and to operate safely." (AR, 9254.) These suspensions were imposed for the stated purposes of allowing time for implementation of safety reforms and
Of critical importance to this lawsuit is the fate of Lease Sale 213 activities after the Deepwater Horizon spill. Even as the public's hue and cry over the oil spill reached a fevered pitch in the early summer of 2010, the issuance of leases in Lease Sale 213 was not terminated, suspended, canceled, or impaired in any way. Instead, federal regulators moved forward with Phase 2 of the Lease Sale 213 bid approval process as if nothing had happened, remaining on the same path they had commenced before April 20, 2010. It was business as usual. In particular, BOEM approved 21 bids on April 22, 2010; 32 bids on April 29, 2010; 41 bids on May 6, 2010; 53 bids on May 13, 2010; 38 bids on May 21, 2010; 39 bids on May 27, 2010; 43 bids on June 2, 2010; 12 bids on June 3, 2010; 34 bids on June 8, 2010; and 18 bids on June 10, 2010. (AR, 616-27.) All told, then, BOEM accepted bids on at least 331 blocks in Lease Sale 213 between the onset of the Deepwater Horizon spill on April 20, 2010 and the conclusion of Phase 2 on June 10, 2010. Again, the Deepwater Horizon spill continued until the wellhead was capped on July 15, 2010, some 35 days after Phase 2 of Lease Sale 213 concluded. Another way of looking at it is that BOEM completed Phase 2 of the bid approval process fully 50 days before reinitiating consultation with the FWS and NMFS to analyze the effects of the Five-Year Plan on threatened and endangered species in light of the oil spill, and roughly five months before announcing its intent to prepare a Supplemental EIS to consider new information gleaned from the Deepwater Horizon experience.
The administrative record offers few insights into BOEM's decision to proceed with approving bids on Lease Sale 213 post-Deepwater Horizon. Most notably, e-mail traffic shows that in May 2010, BOEM fielded inquiries from current and prospective lessees as to whether it would continue with Phase 2 of the Lease Sale 213 bid approval process in light of the Deepwater Horizon incident and the accompanying restrictions on new drilling permits. BOEM responded to those inquiries with assurances that the leasing process for Lease Sale 213 was proceeding as scheduled and that bids would continue to be approved in the ordinary course. On May 11, 2010, a BOEM official indicated via e-mail that "we are continuing to issue leases awarded by RE until notified otherwise." (AR, 9155.) That same day, a BOEM official wrote that "[t]he Adjudication Unit is still issuing leases for CPA Sale 213." (AR, 9164.) Another BOEM e-mail from May 11 likewise confirms that "Sale 213 leases will continue to be issued as usual." (AR, 9169, 9172.) Yet another message dated May 11, 2010 and authored by a BOEM official states, "We are issuing leases. No one has informed us otherwise." (AR, 9166.) So the agency's course of action after April 20, 2010 was unwavering, at least with respect to the review and approval of Lease Sale 213 bids.
At its core, this litigation hinges on the contention of plaintiff, Defenders of Wildlife,
Initially, DOW sued only a collection of federal defendants, including BOEM, the U.S. Department of the Interior, and Ken Salazar, Secretary of the Interior (collectively, the "Federal Defendants"). However, a host of interested entities in the oil and gas industries — including successful bidders in Lease Sale 213 paying large sums of money for leases that DOW now seeks to nullify — requested and received leave to intervene in this action as parties defendant (collectively, the "Intervenor Defendants").
Following adjudication of various Rule 12(b) Motions advanced by the Federal Defendants and certain Intervenor Defendants, the following claims brought by DOW in the Third Amended Complaint remain active and pending: (i) a cause of action alleging that BOEM violated NEPA and the Administrative Procedure Act ("APA") by accepting bids for Lease Sale 213 after the Deepwater Horizon oil spill began without waiting for a supplemental EIS to be completed (Claim One); (ii) a cause of action alleging that BOEM violated the APA by continuing to accept bids on Lease Sale 213 after the spill in reliance on invalid conclusions in the Multisale EIS and Environmental Assessment, without first supplementing same (Claim Two); and (iii) a cause of action alleging that BOEM violated the APA and the ESA by proceeding with Lease Sale 213 after April 20, 2010, in contravention of its statutory duty to ensure that its actions are not likely to jeopardize the continued existence of any listed species or their critical habitat (Claim Four). (See doc. 81.)
The parties agree that DOW's challenges brought under ESA and NEPA are subject to review under standards promulgated by the Administrative Procedure Act, 5 U.S.C. §§ 701 et seq. (See doc. 113-1, at 17; doc. 119, at 13.) The APA provides that reviewing courts shall hold unlawful and set aside agency action, findings and conclusions that are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A); see also Miccosukee Tribe of Indians of Florida v. United States, 566 F.3d 1257, 1271 (11th Cir.2009) (evaluating ESA claims under "arbitrary and capricious" standard of APA); Ouachita Watch League v. Jacobs, 463 F.3d 1163, 1169 (11th Cir.2006) ("We review an agency's decisions pursuant to NEPA under the arbitrary and capricious standard of the Administrative Procedure Act (APA)."); Fund for Animals, Inc. v. Rice, 85 F.3d 535, 542 (11th Cir.1996) (under APA, courts "can set aside the federal agencies' actions here only if we find that the agencies abused their discretion, or acted arbitrarily, capriciously, or contrary to law"); Tribal Village of Akutan v. Hodel, 869 F.2d 1185, 1191, 1193 (9th Cir.1988) (review of NEPA environmental impact statement or ESA compliance is governed by APA). "The arbitrary and capricious standard is exceedingly deferential," and courts may not substitute their "judgment for the agency's as long as its conclusions are rational." Miccosukee, 566 F.3d at 1264 (citations and internal quotation marks omitted); see also Preserve Endangered Areas of Cobb's History, Inc. v. U.S. Army Corps of Engineers, 87 F.3d 1242, 1246 (11th Cir.1996) ("even in the context of summary judgment, an agency action is entitled to great deference"). "The court's role is to ensure that the agency came to a rational conclusion, not to conduct its own investigation and substitute its own judgment for the administrative agency's decision." Sierra Club v. Van Antwerp, 526 F.3d 1353, 1360 (11th Cir.2008) (citation and internal quotation marks omitted); see also Fund for Animals, 85 F.3d at 542 ("The reviewing court is not authorized to substitute its judgment for that of the agency concerning the wisdom or prudence of the proposed action.") (citations omitted).
Filtered through the APA lens, then, DOW's claims in this action are that BOEM acted arbitrarily and capriciously in implementing the Lease Sale 213 bid approval process after the Deepwater Horizon spill, without first reinitiating consultation under ESA or preparing a new SEIS under NEPA. In considering these claims, this Court's inquiry is not whether it agrees with BOEM's actions, or whether it would have proceeded differently had it been standing in BOEM's shoes on April 20, 2010. Instead, the proper analysis is whether the record on summary judgment establishes that DOW has met its burden of showing that BOEM's decision to move forward with Lease Sale 213 under those
As noted, Claim Four alleges that in relying on "faulty opinions in proceeding with lease sales in the Gulf after the Deepwater Horizon incident," BOEM has "failed to ensure that there will be no jeopardy to endangered or threatened species resulting from actions it implements," in violation of ESA and APA. (Doc. 61, ¶¶ 73-74.) This claim stems from § 7(a)(2) of ESA, which obliges federal agencies to insure that their actions are not "likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of [critical] habitat of such species." 16 U.S.C. § 1536(a)(2). Section 7(a)(2)'s requirements unquestionably apply to conduct such as BOEM's approval of leases for oil and gas drilling on the OCS. See 50 C.F.R. § 402.02 (stating that "actions" covered by the ESA include "the granting of licenses, contracts, leases, easements, rights-of-way, permits, or grants-in-aid," as well as "actions directly or indirectly causing modifications to the land, water, or air"). Importantly, "section 7(a)(2) imposes two obligations upon federal agencies. The first is procedural and requires that agencies consult with the FWS [and/or NMFS] to determine the effects of their actions on endangered or threatened species and their critical habitat." Florida Key Deer v. Paulison, 522 F.3d 1133, 1138 (11th Cir.2008). Consultation is "designed as an integral check on federal agency action, ensuring that such action does not go forward without full consideration of its effects on listed species." Defenders of Wildlife v. Jackson, 791 F.Supp.2d 96, 100 (D.D.C.2011) (citation omitted). "The second is substantive and requires that agencies insure that their actions not jeopardize endangered or threatened species or their critical habitat." Florida Key Deer, 522 F.3d at 1138.
To comply with § 7(a)(2), BOEM is required to consult with the NMFS and/or FWS if the contemplated action "may affect" an endangered or threatened species. See, e.g., Karuk Tribe of California v. U.S. Forest Service, 640 F.3d 979, 983 (9th Cir. 2011) ("the standard for ESA consultation is only whether the conduct `may affect' a listed species"); Rio Grande Silvery Minnow v. Bureau of Reclamation, 601 F.3d 1096, 1105 (10th Cir.2010) (if agency determines that its "proposed discretionary action may affect a listed species or a critical habitat ... the agency must consult with the FWS" or NMFS); Florida Key Deer, 522 F.3d at 1138 (similar). It is undisputed that BOEM properly consulted with both the NMFS and the FWS at the outset of the Five-Year Plan of which Lease Sale 213 is a part. The NMFS's conclusion in its Biological Opinion was that "the five-year leasing program and its associated actions are not likely to jeopardize the continued existence of threatened or endangered species under the jurisdiction of NMFS or destroy or adversely modify designated critical habitat." (AR, 1493.) Similarly, the FWS determined in its Biological Assessment that the brown pelican, bald eagle, piping plover, whooping crane, loggerhead sea turtle, Kemp's ridley, Alabama beach mouse, and Perdido Key beach mouse were not likely to be adversely affected by the Five-Year Plan. (AR, 1695.) Simply put, nothing in either the NMFS Opinion or the FWS Assessment at the outset of the Five-Year Plan suggested that BOEM's administration of that Plan was likely to jeopardize endangered or threatened species or their critical habitat. So § 7(a)(2) did not require anything further of BOEM at the outset of the program.
Of course, initial consultation may not insulate an agency from the duty to perform further consultation if circumstances change at a later date. See Wild Fish Conservancy v. Salazar, 628 F.3d 513, 525 (9th Cir.2010) (recognizing agency's continuing duty to reinitiate consultation if new information reveals effects of the action that may affect listed species in a manner to an extent not previously considered); 50 C.F.R. § 402.16(b) ("Reinitiation of formal consultation is required ... where discretionary Federal involvement or control over the action has been retained or is authorized by law and ... [i]f new information reveals effects of the action that may affect listed species or critical habitat in a manner or to an extent not previously considered"). Where a plaintiff alleges that an agency violated the reinitiation requirement, that plaintiff bears the exacting burden of establishing that the agency acted arbitrarily and capriciously in failing to reinitiate consultation. See Miccosukee Tribe of Indians of FL v. United States, 420 F.Supp.2d 1324, 1337 (S.D.Fla.2006); Hawksbill Sea Turtle v. Federal Emergency Management Agency, 11 F.Supp.2d 529, 550 (D.Vi.1998) ("the standard for demonstrating that an agency was arbitrary and capricious in failing to reinitiate consultation is an exacting one").
During the initial ESA consultation in 2007, both the NMFS and the FWS made certain assumptions and judgments about the risk of an oil spill in evaluating the likely effects of the Five-Year Plan on listed species and their critical habitat. For example, the NMFS Opinion indicated that "the coastal waters inhabited by the Gulf sturgeon are not expected to be at any significant risk from oil spills.... No coastal spills are projected to occur in Mississippi, Alabama, or Florida coastal waters as a result of a proposed action in the [Central Planning Area, where Lease Sale 213 was to occur].... It is estimated that there is a 1 percent risk for Louisiana waters east of the Mississippi River to be affected by an oil slick within 10 days. Probabilities decrease below 1 percent to areas further to the east.... [T]he likelihood of spill occurrence and subsequent contact with Gulf sturgeon designated critical habitat is extremely low." (AR, 1527.)
Also during the 2007 consultation process, the FWS issued a Biological Assessment for the Five-Year Plan. The FWS Assessment of environmental risks to coastal birds and sea turtles was predicated on estimates that between 5,500 and 26,500 barrels ("bbl") of oil would be spilled in offshore waters, with approximately two 3,000 bbl spills in coastal waters, over a 40-year period as a result of Five-Year Plan activities in the CPA. (AR, 1660.) The FWS also cited computer modeling estimates showing only a 2-4% risk of impact on sea turtle nesting habitat in Louisiana, and less than 0.5-1% risk of impact on such habitat east of Louisiana, as a result of offshore spills caused by the proposed actions in the CPA. (AR, 1668-69.) Estimates for large offshore oil spills from the Five-Year Plan affecting whooping crane habitat were calculated at less than 0.5-1%. (AR, 1659.) With respect to Alabama and Perdido Key beach mice, the FWS Assessment stated that "[t]here is a < 0.5 percent chance that an offshore spill ≥ 1,000 bbl would occur and contact the shoreline inhabited by the Alabama or Perdido Key beach mouse during the life of a proposed action." (AR, 1672.) That same document indicated that "[l]arge oil spills associated with OCS activities are low-probability events." (AR, 1676.) In the FWS's view, most counties and parishes had a risk of less than 0.5% of an offshore oil spill exceeding 1,000 bbl occurring and contacting their shorelines as a result of Five-Year Plan activities, with the likelihood of exposure reaching as high as 10-15% for Plaquemines Parish in Louisiana. (AR, 1677.) That report concluded that oil spills arising from Five-Year Plan activities posed only "a minimal threat to nesting adults or hatchling loggerhead, green, leatherback, and Kemp's ridley sea turtles," and that regulatory safeguards "and the weathering of oil in the environment are expected to significantly minimize potential impacts on sea turtles and their nesting habitat." (AR, 1692.) The FWS reached similar findings as to impacts on the Alabama and Perdido Key beach mice, and the piping plover, bald eagle, brown pelican and whooping crane. (AR, 1692-95.) For these and other reasons, the FWS Assessment found that these species were "Not Likely to Be Adversely Affected" by the proposed actions under the Five-Year Plan. (AR, 1695.)
The point of the foregoing is to emphasize that, back in 2007, both the NMFS and the FWS rested their "no jeopardy" determinations on specific, detailed assumptions and modeling about oil spill risks, magnitudes and effects arising from the Five-Year Plan. The Deepwater Horizon experience from April — July 2010 reasonably called into question certain of those assumptions and models, and constituted "new information" warranting reinitiation of consultation with those expert agencies. That is precisely what happened. On July 30, 2010, BOEM reinitiated consultation under Section 7 of the Endangered Species Act with both the
No party herein quarrels with BOEM's decision to reinitiate consultation in July 2010.
Nothing in BOEM's mere approval of bids for Lease Sale 213 (which is the only activity at issue in this action) could reasonably be viewed as constituting an "irreversible or irretrievable commitment of resources" under § 7(d). See North Slope Borough v. Andrus, 642 F.2d 589, 611 (D.C.Cir.1980) ("Plainly, the preliminary activities permitted by this lease sale entail no irreversible or irretrievable commitment of resources....") (footnote, citation and internal quotation marks omitted); Village of False Pass v. Clark, 733 F.2d 605, 610 (9th Cir.1984) (similar). After all, "the lease sale itself is only a preliminary and relatively self-contained stage within an overall oil and gas development program which requires substantive approval and review prior to implementation of each of the major stages: leasing, exploring, producing." North Slope, 642 F.2d at 593; see also Sec'y of Interior, 464 U.S. at 342, 104 S.Ct. 656 ("Since 1978 the sale of a lease grants the lessee the right to conduct only very limited, `preliminary activities'
As the Federal Defendants properly recognize, avoiding "irreversible or irretrievable commitment of resources" under § 7(d) does not necessarily discharge their obligations as to the "no jeopardy" requirement of § 7(a). And DOW has brought a § 7(a) cause of action, not a § 7(d) cause of action. The point is that BOEM's actions with respect to Lease Sale 213 could still violate § 7(a), notwithstanding their compliance with § 7(d). See, e.g., Conner v. Burford, 848 F.2d 1441, 1455 n. 34 (9th Cir.1988) ("Section 7(d) does not amend section 7(a).... Rather, section 7(d) clarifies the requirements of section 7(a), ensuring that the status quo will be maintained during the consultation process."); Florida Key Deer v. Brown, 386 F.Supp.2d 1281, 1293-94 (S.D.Fla. 2005) ("Section 7(d) does not excuse federal agencies from meeting the requirements of Section 7(a)(2)."). For that reason, a § 7(a) analysis remains necessary.
Recall that the ESA imposes a duty on BOEM to "insure" that its lease sale decision "is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of [critical] habitat." § 1536(a)(2). Plaintiff's point is that, until the reinitiated consultation is finished and the NMFS and FWS have analyzed the Five-Year Plan in light of the "new information" relating to the Deepwater Horizon spill, BOEM cannot be insuring that its actions of approving bids and issuing leases for Lease Sale 213 are not likely to jeopardize listed species or their critical habitats.
The Federal Defendants offer a host of counterarguments, with varying degrees of persuasiveness and plausibility. However, their critical insight — and the one that ultimately is fatal to DOW's ESA claim — concerns the strict, staged structure of the OCSLA and its interplay with § 7(a). As discussed supra, under the OCSLA framework, there are "four distinct statutory stages to developing an offshore oil well: (1) formulation of a five year leasing plan
Undoubtedly, the ESA (and particularly § 7(a)) applies to each stage of the OCSLA process, including the lease sale stage at issue in this litigation. See Sec'y of Interior, 464 U.S. at 338, 104 S.Ct. 656 (for OCS stage involving solicitation of bids and issuance of offshore leases, "[r]equirements of the ... Endangered Species Act must be met first"); Center for Biological Diversity, 563 F.3d at 483 ("The welfare of animals is, by design, only implicated at later stages of the program, each of which requires ESA consultation and additional environmental review by Interior."); Village of False Pass, 733 F.2d at 609 ("ESA appears to apply equally to each stage [of OCSLA stages for offshore oil and gas activities] of its own force and effect."). As such, BOEM plainly must comply with Section 7(a)(2) with regard to the bid approval process in Lease Sale 213.
On summary judgment, defendants' position is that BOEM has indeed satisfied the "no jeopardy" requirement as to Lease Sale 213, in that the approval of the leases is not likely to jeopardize the continued existence of any listed species or to adversely modify critical habitat. The key insight emerging from the case law is that a § 7(a)(2) analysis must be performed separately with respect to each stage of the OCSLA framework. As the Supreme Court has observed, "Congress has ... taken pains to separate the various federal decisions involved in formulating a leasing program, conducting lease sales, authorizing exploration, and allowing development and production." Sec'y of Interior, 464 U.S. at 340, 104 S.Ct. 656. And one appeals court has opined that, under OCSLA, "we must consider any environmental effects of a leasing program on a stage-by-stage basis, and correspondingly evaluate ESA's obligations with respect to each particular stage of the program." Center for Biological Diversity, 563 F.3d at 483 ("courts must consider the ESA's requirements in light of each particular leasing program stage at issue because those stages are there by design"); see also North Slope, 642 F.2d at 593 ("At this point the court must look at the contentions
The inescapable fact of the matter is that BOEM's approval of a bid, and the issuance of a lease to an oil drilling/development/exploration company, is a narrowly circumscribed event, in terms of its repercussions for listed species and their habitat. Indeed, "the sale of a lease grants the lessee the right to conduct only very limited, `preliminary activities' on the OCS. It does not authorize full scale exploration, development, or production. Those activities may not begin until separate federal approval has been obtained, and approval may be denied on several grounds." Sec'y of Interior, 464 U.S. at 342, 104 S.Ct. 656. "[T]he purchase of an OCS lease, standing alone, entails no right to explore, develop, or produce oil and gas resources on the OCS." Id. at 340, 104 S.Ct. 656; see also Mobil Oil Exploration and Producing Southeast, Inc. v. United States, 530 U.S. 604, 620, 120 S.Ct. 2423, 147 L.Ed.2d 528 (2000) (opining that while lease contracts give "companies rights to explore for, and to develop, oil, ... the need to obtain Government approvals so qualified the likely future enjoyment of the exploration and development rights that the contract, in practice, amounted primarily to an opportunity to try to obtain exploration and development rights ... under the standards specified in the cross-referenced statutes and regulations"); Abbott v. BP Exploration and Production Inc., 781 F.Supp.2d 453, 463 n. 14 (S.D.Tex.2011) ("BP's rights under its leases to drill for and develop oil were expressly conditioned on it obtaining critical permits designed to ensure the safety and efficacy of any drilling and production activities. The government's authority to require these permits is granted by statute and incorporated into the leases.").
Courts have recognized that OCSLA lease sale decisions, in and of themselves, generally do not cause jeopardy to listed species or critical habitat. See Tribal Village of Akutan v. Hodel, 869 F.2d 1185, 1194 (9th Cir.1988) ("We once again note that the risks to endangered species during the lease sale stage are virtually nonexistent. Only limited preliminary activities are permitted during this stage...."); Village of False Pass, 733 F.2d at 611 ("The lease sale decision itself could not
Recall that it is plaintiff's burden to show not only that BOEM's actions in approving leases post-Deepwater Horizon were violative of the ESA, but that they were "arbitrary, capricious, and an abuse of discretion" within the meaning of the APA. Despite offering several counterarguments to the Federal Defendants' Rule 56 stance, plaintiff has not met this burden. As an initial matter, DOW insists that the Federal Defendants' position would "nullify any role that consultation plays at the lease sale stage." (Doc. 127, at 2.) The Court disagrees. It is certainly foreseeable that even the "preliminary activities" authorized by a lease sale might, in certain circumstances, jeopardize a listed species or its critical habitat.
Next, DOW offers outspoken criticism of the stage-by-stage analysis championed by BOEM, reasoning that "ESA consultation occurs only at the lease sale stage, not later" and that "[i]f BOEM is not required to insure against jeopardy at this stage, the agency will never be required to satisfy this duty." (Doc. 127, at
For all of these reasons, the Court is of the opinion that BOEM's decision to continue approving bids associated with Lease Sale 213 after the Deepwater Horizon spill without awaiting the results of reinitiated consultation with expert agencies did not violate § 7(a)(2) of ESA. More precisely, plaintiff has not met its burden of showing that BOEM's determination, without the benefit of reinitiated consultation, that approving bids for Lease Sale 213 was not likely to jeopardize the existence of any listed species or their critical habitat, was arbitrary, capricious, or an abuse of its discretion. As to the narrow lease-sale stage at issue herein, the likely effects on listed species and critical habitat appear no
Plaintiff's remaining claims allege violations of the National Environmental Policy Act, 42 U.S.C. §§ 4321 et seq. ("NEPA"), arising from BOEM's acceptance of bids for Lease Sale 213 without preparing a Supplemental Environmental Impact Statement ("SEIS"), and instead relying on stale, demonstrably invalid conclusions in the existing Environmental Impact Statement ("EIS") and Environmental Assessment ("EA").
NEPA "is not a substantive environmental statute which dictates a particular outcome if certain consequences exist." Sierra Club v. U.S. Army Corps of Engineers, 295 F.3d 1209, 1214 (11th Cir. 2002). Rather, "[t]he object of NEPA is to require federal agencies to consider environmental values when making decisions and the initial responsibility of the federal agency is to determine the extent of the environmental impact." Hill v. Boy, 144 F.3d 1446, 1449 (11th Cir.1998) (citations and internal quotation marks omitted). In assessing an agency's compliance with NEPA, a reviewing court's "only role ... is to insure that the agency has considered the environmental consequences; it cannot interject itself within the area of discretion of the executive." Fund for Animals, Inc. v. Rice, 85 F.3d 535, 547 (11th Cir.1996) (citation omitted). And, as previously noted, "[a] court can only find a federal agency's attempted NEPA compliance inadequate where it is arbitrary, capricious, or an abuse of discretion in violation of the APA." Sierra Club v. Van Antwerp, 526 F.3d 1353, 1361 (11th Cir.2008).
NEPA requires federal agencies to prepare an EIS for any "major Federal actions significantly affecting the quality of the human environment." 42 U.S.C. § 4332(2)(C); see also U.S. Army, 295 F.3d at 1215 (if the agency concludes "that the action will have a significant effect, then the project is `major,' and the agency must prepare an environmental impact statement") (citations and internal quotation marks omitted). "The primary purpose of an environmental impact statement is to serve as an action-forcing device to insure that the policies and goals defined in the Act are infused into the ongoing programs and actions of the Federal Government." 40 C.F.R. § 1502.1; see also U.S. Army, 295 F.3d at 1215 (EIS must "provide full and fair discussion of significant environmental impacts") (citation omitted).
In April 2007, BOEM completed the Multisale EIS, which numbered more than 1,000 pages and addressed the entirety of the Five-Year Plan. (AR, 1807-2883.) Among other conclusions, that Multisale EIS indicated that expected impacts to coastal and marine water quality were minimal, that any offshore oil spills were not expected to cause significant damage to wetlands on the Gulf Coast, that no permanent loss of seagrass was projected to result from oil contact, and that oil spills from the Five-Year Plan had the potential to impact marine mammals, sea turtles, and other animals, even as probability of a major spill was deemed low. (AR, 2702-06.) BOEM also prepared a SEIS in September 2008 for the stated purpose of analyzing "the potential environmental effects of oil and natural gas leasing, exploration,
Preparation of an EIS is not necessarily a failsafe, guaranteed means of compliance with NEPA. In certain cases, after an EIS is published, the agency may receive additional information that reveals "significant effects on the quality of the human environment not previously considered," necessitating the preparation of an SEIS. Van Antwerp, 526 F.3d at 1360. "The standard for determining when an SEIS is required is essentially the same as the standard for determining when an EIS is required." U.S. Army, 295 F.3d at 1215-16 (citation and internal quotation marks omitted). Specifically, "[a] supplemental EIS is required only when the post[original EIS] changes in the [project] will have a `significant' impact on the environment that has not previously been covered by the [original] EIS." Id. at 1221 (citation and internal quotation marks omitted); see also 40 C.F.R. § 1502.9(c)(1)(ii) (agencies must prepare a SEIS if "[t]here are significant new circumstances or information relevant to environmental concerns and bearing on the proposed action or its impacts").
NEPA and its SEIS requirement undoubtedly apply to the bid approval stage of an OCSLA drilling project. See Sec'y of Interior, 464 U.S. at 338, 104 S.Ct. 656 (for OCS stage involving solicitation of bids and issuance of offshore leases, "[r]equirements of the National Environmental Protection Act ... must be met first"). Plaintiff maintains that BOEM violated NEPA by continuing to approve bids for Lease Sale 213 in the days and weeks following the Deepwater Horizon accident without preparing a SEIS to consider the spill's impacts on Gulf resources or the overall risks of deepwater drilling in the Gulf. To be clear, everyone agrees that BOEM did indeed prepare a SEIS after the Deepwater Horizon spill. See Defenders of Wildlife v. Bureau of Ocean Energy Management, Regulation, and Enforcement, 791 F.Supp.2d 1158, 1166 (S.D.Ala. 2011) ("the Federal Defendants make a strong showing (which DOW does not counter or rebut) that, other than Lease 213, BOEM[] has not conducted and will not conduct any post-Deepwater Horizon lease sales under the Multi-sale EIS until the supplemental EIS is completed"); 75 Fed.Reg. 69122-01 (Nov. 10, 2010) ("BOEM[] is announcing its intent to prepare a [SEIS].... The SEIS will update the environmental and socioeconomic analyses in [the Multisale EIS]" and the September 2008 SEIS); doc. 113-1, at 16-17.
The Federal Defendants maintain that DOW's NEPA argument flows from a fundamental misunderstanding of the circumstances under which a SEIS is required. In particular, the Federal Defendants point to Supreme Court authority explaining that the duty to prepare a SEIS is triggered when both of the following conditions are satisfied: (i) there remains major federal action to occur, and (ii) the new information is sufficient to show that the "remaining action" will affect the human environment in a significant manner or to a significant extent not already considered. Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 374, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989). This Court has already concluded that "[a]cceptance of bids is a major federal activity because BOEM[] retained discretion to reject them and to consider noneconomic factors in deciding whether or not to approve them, and because the mere submission of a high bid (without more) did not confer upon the bidders any right to lease a particular tract without agency approval." Defenders of Wildlife, 791 F.Supp.2d at 1177-78.
This inquiry, in turn, depends on how broadly the "remaining action" concept is construed. The Federal Defendants persuasively argue that the remaining action for purposes of DOW's NEPA claim in this case is simply the approval of bids for Lease Sale 213. As in the ESA context, federal courts applying NEPA requirements to the OCSLA framework have adopted a compartmentalized, stage-specific analysis. See Center for Biological Diversity, 563 F.3d at 474 ("When faced with a multi-stage, pyramidic program such as the Leasing Program at issue here, NEPA's regulations allow an agency to conduct a tiered approach to preparing an EIS."); Tribal Village of Akutan, 869 F.2d at 1192 ("the amount and specificity of information necessary to meet NEPA requirements varies at each of OCSLA's stages"); Village of False Pass, 733 F.2d at 609 ("Under OCSLA's general environmental provision, NEPA ... applies to each stage of its own force and effect. OCSLA's specific references to NEPA at the leasing and development and production stages ... provide additional impetus for its application."); North Slope, 642 F.2d at 606 (because "[t]he 1978 amendments to the OCSLA sanction the administrative practice of dividing OCS projects into leasing, exploration, and production stages," at the lease-sale stage, NEPA review is "chiefly (though not exclusively) concerned about those hazards associated with the limited preliminary activities permitted to the lessees during the lease sale phase") (footnotes omitted);
As one federal appeals court explained, "[w]e are the least troubled by what may seem to be incomplete or speculative data at the lease sale stage.... [A]ny technical deficiencies at the lease sale stage are unlikely to result in environmental damage, as a lease sale does not directly mandate further activity that would raise an oil spill problem." Tribal Village of Akutan, 869 F.2d at 1192 (citations and internal quotation marks omitted). Likewise, another appellate court opined that shortcomings in an EIS prepared at the lease sale stage of an OCSLA project were not violative of NEPA where "[t]he numerous and continuing constraints on the oil companies ensure that any future development in the Beaufort Sea will be highly studied and conscientious," "[t]he Secretary retains full power under the OCSLA to modify or disapprove any of the lessees' plans" that might harm the marine or coastal environment, and the "lease sale is part of an OCS project which will necessarily occasion reevaluations before the anticipated — but by no means assured — production of oil on a commercial scale." North Slope, 642 F.2d at 606. These authorities weigh heavily against mandating an SEIS at the lease sale stage here based on DOW's concerns about environmental effects of subsequent stages.
DOW's initial response to this line of reasoning is that "[l]easing and drilling are intertwined for NEPA purposes and cannot
Nor does the Court find persuasive DOW's contentions that "BOEM is committed to a program of exploration and development after the sale of leases" and that BOEM is engaging in misdirection and sleight-of-hand by asserting "that Plaintiffs get NEPA review at whatever stage of the process is not at issue." (Doc. 127, at 17-18.) As to the former, it is simply not accurate that upon issuing leases, BOEM is bound to allow lessees to conduct unfettered full-scale drilling operations at those locations. See, e.g., Sec'y of Interior, 464 U.S. at 340-42, 104 S.Ct. 656 ("Congress has thus taken pains to separate the various federal decisions involved in formulating a leasing program, conducting lease sales, authorizing exploration, and allowing development and production. Since 1978, the purchase of an OCS lease, standing alone, entails no right to explore, develop, or produce oil and gas resources on the OCS.... Those activities may not begin until separate federal approval has been obtained, and approval may be denied on several grounds."); 30 C.F.R. § 250.172(b), (d) (Regional Supervisor may suspend oil/gas operations in the OCS "[w]hen activities pose a threat of serious, irreparable, or immediate harm or damage" to the environment, or "[w]hen necessary to carry out the requirements of NEPA or to conduct an environmental analysis"); Village of False Pass, 733 F.2d at 615 (observing that "the Secretary has full discretion to order modification of the plan for consistency with environmental, safety, and health requirements, e.g., his discretion under NEPA.... The Secretary may cancel a lease for failure to comply with these plans over which he retains so large a discretion.") (citations and internal quotation marks omitted). The staged environmental review process that Congress carefully implemented via OCSLA (as federal appeals courts have recognized and enforced) would mean nothing if, as plaintiff suggests, BOEM is irrevocably committed to allow oil/gas exploration to proceed once it issues a lease. Applicable case law, statutes and regulations all undermine plaintiff's position that exploration, development and production are a fait accompli once a lessee receives an OCLSA lease.
As previously stated, it is DOW's burden in this case to establish that BOEM violated its obligations under NEPA by issuing leases for Lease Sale 213 after April 20, 2010, without first preparing a SEIS. See, e.g., Sierra Club v. U.S. Army Corps of
For all of the foregoing reasons, it is
DONE and ORDERED.