Kane, Senior U.S. District Court Judge.
Despite hundreds of pages of briefing and a voluminous administrative record, this case presents a relatively straightforward question: must the Office of Surface Mining Reclamation and Enforcement ("OSM") consider the environmental impacts related to the combustion, at the Four Corners Power Plant, of coal that will be mined as a result of OSM's approval of the Navajo Transitional Energy Company's ("NTEC") Permit Revision Application? Because I answer this question in the affirmative, and because I find that OSM failed to adequately consider those same impacts in its Environmental Assessment ("EA") for NTEC's Permit Revision Application, the Petition for Review of Agency Action (Doc. 1) is GRANTED. The balance of this opinion discusses the factual and legal basis for this conclusion.
The Navajo Mine, which extracts coal from the Fruitland Formation, exists for the sole purpose of supplying coal to the nearby Four Corners Power Plant.
Operations at the mine are governed by a life-of-mine permit issued by OSM. AR 2-1-1922. Although the initial permit was limited to a term of five years, 30 U.S.C. § 1256(b), NTEC can apply for successive five-year renewals, with respect to areas within the boundaries of its existing permit, as a matter of right. Id. § 1256(d)(1). Such "matter of right" renewals are not, however, allowed when NTEC seeks to extend its mining operations "beyond the boundaries authorized in the existing permit." Id. § 1256(d)(2). When NTEC seeks to expand its mining operations, it must submit a permit revision application, which is "subject to the full standards applicable to new applications under [the Surface Mining Control and Reclamation Act]." Id.; see also AR 1-2-11-22. OSM's compliance, vel non, with NEPA in regard to its approval of NTEC's recent Permit Revision Application, which presents the latest chapter in the ongoing attempt to expand operations at the Navajo Mine, forms the basis of the instant controversy.
BHP first sought to expand mining operations into a 3,800 acre area of the Navajo Mine known as "Area IV North" in 2005. OSM completed an EA for the Permit Revision Application, determined that the expansion of operations proposed therein would have no significant impact on the quality of the human environment, and approved the Permit Revision Application on October 7, 2005.
Soon after, two of the Petitioners in the instant action, Diné Citizens Against Ruining our Environment ("DCARE") and San Juan Citizens Alliance, filed suit challenging OSM's approval of BHP's proposed expansion of operations into Area IV North. In October 2010, I reviewed and rejected OSM's approval of the Permit Revision Application, remanding the application to OSM for further proceedings. See Diné Citizens Against Ruining Our Environment v. Klein, 747 F.Supp.2d 1234 (D.Colo.2010).
Following my 2010 remand, BHP submitted a revised Permit Revision Application to OSM, seeking permission for a more modest expansion of its operations into Area IV North. AR 1-01-01-01. OSM developed a draft EA reviewing the potential environmental impacts of the expansion of operations proposed in the Permit Revision Application; it solicited extensive public input on that draft EA; and it issued a final EA determining that the revised proposed expansion would have no significant impact on the human environment. AR 1-02-10-01 to 06. Based in part on that determination, OSM approved the 2011 Permit Revision Application with conditions. AR 1-02-10-01.
Shortly thereafter, DCARE, San Juan Citizens Alliance, Sierra Club, Center for Biological Diversity, and Amigos Bravos (collectively "Petitioners") filed the instant suit alleging that OSM's EA failed to comply with the National Environmental Policy Act ("NEPA") and its implementing regulations. Specifically, Petitioners argue that OSM should have considered the environmental impacts related to the combustion of coal that will be mined as a
On January 10, 2014, the parties completed their briefing on Petitioners' claims, and on February 18, 2015, they presented oral arguments. This matter is now ready for disposition.
Because Petitioners' claims are based on NEPA, I have jurisdiction pursuant to 28 U.S.C. § 1331. Venue in this court is proper, because a substantial part of the events giving rise to Petitioners' claims occurred in OSM's Western Region offices located in Denver, Colorado. 28 U.S.C. § 1391(e).
Respondents do not contest Petitioners' standing to challenge their approval of NTEC's Permit Revision Application;
Petitioners assert that OSM has failed to comply with its obligation to fully consider the potential environmental impacts that would result from OSM's approval of NTEC's Permit Revision Application. A violation of NEPA's procedural requirements constitutes harm for purposes of Article III standing. See, e.g., Davis v. Mineta, 302 F.3d 1104, 1115 (10th Cir.2002). Furthermore, DCARE, San
Petitioners must also "show [their] injuries are fairly traceable to the conduct complained of." Comm. to Save the Rio Hondo, 102 F.3d at 451. Where a party asserts a NEPA claim, "the injury is the increased risk of environmental harm to concrete interests, and the conduct complained of is the agency's failure to follow the National Environmental Policy Act's procedures." Id. Therefore, in order to establish causation, "a [party] need only show its increased risk is fairly traceable to the agency's failure to comply with the National Environmental Policy Act." Id.
The harm forming the basis of Petitioners' "injury" for purposes of the standing analysis is the inadequate foresight and deliberation inherent in OSM's alleged NEPA violations. It follows that this injury was directly caused by OSM's alleged failure to comply with NEPA's procedural requirements.
An injury is redressable when "it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Friends of the Earth v. Laidlaw Envtl. Servs., 528 U.S. 167, 181, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000). Petitioners must demonstrate a substantial
Petitioners' complained-of injury is directly related to OSM's alleged failure to comply with NEPA's procedural requirements. They seek declaratory judgment that OSM has violated NEPA and the APA, an injunction setting aside OSM's approval of the Permit Revision Application and remanding the matter to OSM with instructions to prepare an Environmental Impact Statement, and a mandatory permanent injunction prohibiting OSM from permitting any ground-disturbing activity in Area IV North of the Navajo Mine until OSM remedies the complained-of NEPA violations. If I were to grant the requested relief, the alleged NEPA violations would be corrected and Petitioners' harms would be redressed.
Although Petitioners have established their standing to bring these claims, I may not address these issues if this case is constitutionally or prudentially moot. Neither Respondents nor Intervenor-Respondent suggest that this case is constitutionally moot; instead, they urge me to exercise my discretion to find Petitioners' challenge prudentially moot. They argue that because a pending EIS analyzes the combustion-related effects Petitioners claim OSM failed to analyze in the 2012 EA, Petitioners challenge to the 2012 EA is prudentially moot. Supplemental Brief of the Navajo Transitional Energy Co. (Doc. 76) at 8.
"In deciding whether a case is moot, the crucial question is whether granting a present determination of the issues offered will have some effect in the real world." Abdulhaseeb v. Calbone, 600 F.3d 1301, 1311 (10th Cir.2010) (quoting Kan. Judicial Review v. Stout, 562 F.3d 1240, 1246 (10th Cir.2009)). In other words, "When it becomes impossible for a court to grant effective relief, a live controversy ceases to exist, and the case becomes moot." Id. Respondent and Intervenor-Respondent urge that, given the imminent completion of the pending EIS, I cannot grant Petitioners meaningful relief. I find this contention meritless.
Even if, as Respondents and Intervenor-Respondent argue, a remand to OSM with instructions to prepare an EIS would not afford Petitioners any meaningful relief at this juncture,
NEPA does not define or specify the standard of review to be used in examining OSM's actions. Accordingly, the Administrative Procedure Act, 5 U.S.C. § 500, et seq., provides the framework for this appeal, and I must apply the standards articulated in the APA in considering the merits of Petitioners' arguments.
Under the APA, I review OSM's actions to determine if they are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). An agency's action is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" if "the agency entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise." Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 41, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983); see also Morris v. U.S. Nuclear Reg. Comm'n, 598 F.3d 677, 690-91 (10th Cir.2010). In the context of Petitioners' NEPA claim, I review the administrative record to "ensure that the agency has adequately considered and disclosed the environmental impact of its actions and that its decision is not arbitrary and capricious." Krueger, 513 F.3d at 1178 (citing Utah Shared Access Alliance v. U.S. Forest Serv., 288 F.3d 1205, 1208 (10th Cir.2002)).
Although my review of OSM's approval of NTEC's Permit Revision Application is "highly deferential," my "inquiry must be "searching and careful." Ecology Center, Inc. v. U.S. Forest Serv., 451 F.3d 1183, 1188 (10th Cir.2006). I will uphold OSM's approval "if at all, on the basis articulated by the agency itself," Biodiversity Conserv. All. v. Jiron, 762 F.3d 1036, 1060 (10th Cir.2014); counsel's posthoc rationalizations cannot substitute for the "fair and considered judgment of the agency" as set forth in the administrative record. S. Utah Wilderness All., 620 F.3d at 1236.
Having resolved these preliminary matters, I now turn to a substantive discussion of the basis for my decision.
As a major federal action,
In an effort to fulfill this obligation, OSM prepared an EA containing information relating to the need for the proposed expansion, other alternatives, the environmental impact of the proposed expansion
To determine the proper scope of its EA for NTEC's proposed mine expansion, OSM was required to consider "3 types of actions, 3 types of alternatives, and 3 types of impacts." 40 C.F.R. § 1508.25. Most relevant to the instant challenge, OSM was required to consider "connected actions" and "indirect effects
Petitioners argue that OSM improperly limited the scope of its EA by failing to consider the combustion-related impacts of the proposed expansion of operations. Specifically, they argue that the combustion-related impacts of the proposed expansion require analysis as either "connected actions" or "indirect effects" of the proposed expansion. Because I conclude that the combustion-related impacts are "indirect effects of the proposed action," I find it unnecessary to reach the parties' arguments relating to whether or not the continued operation of the Four Corners Power Plant is a "connected action." See Valley Forge Ins. Co. v. Health Care Mgmt. Partners, Ltd., 616 F.3d 1086, 1094 (10th Cir.2010) ("Judicial restraint . . . means answering only the question we must, not those we can").
Petitioners argue that the combustion-related impacts must be analyzed as an "indirect effect" of NTEC's proposed mine expansion. An "indirect effect" is an effect "which [is] caused by the action and [is] later in time or farther removed in distance, but [is] still reasonably foreseeable." 40 C.F.R. § 1508.8(a). Accordingly, Petitioners must demonstrate both that (1) "but for" the proposed expansion, the coal combustion-related impacts would not occur and (2) the coal combustion-related impacts are reasonably foreseeable. Id.; see also Utahns for Better Transp. v. U.S. Dep't of Transp., 305 F.3d 1152, 1176 (10th Cir.2002).
The Navajo Mine and the Four Corners Power Plant are unusually interconnected; indeed, as Petitioners argue, they are interdependent. The Four Corners Power Plant is a mine mouth plant, which was "designed and constructed specifically to burn coal from the Navajo Mine." AR 1-2-11-20. The coal mined at the Navajo Mine is hauled from the mining areas to stockpiles adjacent to the railroad; it is transferred from the stockpiles to train cars; and it is transported to the
Under the existing Mine Plan, NTEC will be unable to meet its contractual obligations as the exclusive fuel source for the Four Corners Power Plant. AR 1-2-11-285. Accordingly, the proposed expansion is necessary if NTEC is "to continue to provide a coal supply in accordance with [its] contractual obligations with the [Four Corners Power Plant] through July 6, 2016." AR 1-2-11-28. See also AR 1-2-11-22, AR 1-2-11-24, AR 1-2-11-29, AR 1-2-11-270, and AR 1-2-11-276. Significantly, if NTEC expands its operations as proposed, an additional 12.7 million tons of coal will be burned over the term of the coal supply contract. AR 1-2-11-285. In other words, as Respondents themselves concede, "but for [OSM's] approval of the permit revision application, coal would not be mined from Area IV North and the environmental impacts associated with the combustion of the mined coal would not occur." Respondents' Brief (Doc. 53) at 36.
Furthermore, given the extreme interdependence of the Navajo Mine and the Four Corners Power Plant, Respondents concede that the combustion-related effects are reasonably foreseeable. Transcript of Oral Argument (Feb. 18, 2015) at 36. Unlike a scenario in which a coal mine markets its coal freely to multiple buyers, each of whom uses that coal in different applications under different constraints, there is virtually no uncertainty regarding when, where, and how the coal mined as a result of NTEC's proposed mine expansion will be combusted.
In its EA for NTEC's Proposed Mine Expansion, OSM purported to analyze the impacts associated with NTEC's delivery of coal to the Four Corners Power Plant. AR 1-2-11-22. As Petitioners correctly note, however, OSM's analysis of the combustion-related impacts is extremely limited. OSM's analysis primarily focuses on the impacts associated with mining and transporting coal to the Four Corners Power Plant. OSM did, however, analyze and discuss emissions from the Four Corners Power Plant in the context of its cumulative effects analysis. As part of that analysis, OSM concluded that the proposed expansion, in conjunction with the continued combustion of coal at the Four Corners Power Plant and other major sources of ambient air pollution in the area, would have no "discernible impact to ambient air quality or to contribute to any cumulative effects on air quality in the [area of the proposed mine expansion]." AR 1-2-11-230.
Although this cursory, conclusory analysis leaves much to be desired, OSM was
Petitioners also note, however, that OSM's EA for the proposed expansion completely fails to address the deleterious impacts of combustion-related mercury deposition in the area of the Four Corners Power Plant. Nonetheless, Respondents argue OSM's minimal discussion of the combustion-related impacts, including its analysis of mercury pollution, was sufficient. Specifically, Respondents argue that OSM was not required to further discuss the combustion-related impacts of NTEC's proposed expansion because: (1) the proposed action did not change the status quo with regard to coal combustion at the Four Corners Power Plant; (2) further consideration of the combustion-related impacts would have merely duplicated ongoing efforts of other governmental agencies; (3) OSM has little, if any, authority to address the combustion-related impacts; and (4) OSM is already in the process of analyzing the combustion-related impacts in a forthcoming EIS. None of these arguments, either viewed separately or in combination with each other, justify OSM's failure to discuss the mercury-related indirect effects of NTEC's proposed expansion.
An EIS need not be prepared, nor "indirect effects" be considered, when "the proposed action does not significantly alter the status quo." Tri-Valley CARES v. DOE, 671 F.3d 1113, 1125 (9th Cir.2012). Respondents argue that, even if OSM were to consider the combustion-related effects resulting from NTEC's proposed mine expansion, it would not be required to prepare an EIS, because the proposed expansion would not change the status quo with respect to the rate of coal combustion, at the Four Corners Power Plant.
This argument ignores the relevant inquiry. Even if the proposed expansion will not result in an increase to the rate of coal combustion at the Four Corners Power Plant, it will result in the combustion of an additional 12.7 million tons of coal over the term of the coal supply contract. AR 1-2-11-285 (noting that without the proposed expansion into Area IV North, NTEC would fall short of its contractual obligations to the Four Corners Power Plant). Absent OSM's approval of the proposed expansion, the environmental effects resulting from this additional combustion would not occur.
A recent Ninth Circuit case illustrates the significance of this distinction. In South Fork Band Council of Western Shoshone of Nevada v. U.S. Department of Interior, the court rejected BLM's argument that the "status quo rule" obviated the need to consider the indirect effects of a proposed mining expansion project.
This distinction is particularly relevant with regards to the deleterious impacts of combustion-related mercury deposition in the area of the Four Corners Power Plant. Even though, as Respondents argue, the effects related to ambient air quality concentrations of pollutants are most closely related to the rate of emissions, Transcript of Oral Argument (Feb. 18, 2015) at 38-39, the primary impacts of mercury are not associated with its ambient concentration in the air but with its deposition from the atmosphere. Id. at 42. Although Respondents attempt to downplay the significance of mercury emissions from the Four Corners Power Plant, id. (noting that the Four Corners Power Plant accounts for 1% of mercury deposition in the San Juan River basin), the record reveals that even microscopic changes in the amount of mercury deposition can have significant impacts on threatened and endangered species in the area impacted by the Four Corners Power Plant. See AR 1-2-14-1990 (concluding that a .1% increase in mercury deposition in the basin is likely to jeopardize the continued existence of the Colorado pikeminnow). Given the potentially significant impacts of mercury pollution, OSM's failure to discuss or analyze the deleterious impacts of combustion-related mercury deposition in the area of the Four Corners Power Plant is troubling. At a minimum, it renders OSM's analysis of the indirect effects of the proposed mine expansion insufficient.
OSM's approval of the Permit Revision Application, even if it does not alter the rate of combustion at Four Corners Power Plant, will result in the combustion of an additional 12.7 million tons of coal. The "status quo rule" does not excuse OSM's failure to consider the cumulative impact of this additional coal combustion, which would not occur but for OSM's approval of the proposed expansion.
Respondents argue that NEPA does not require analysis of the air quality and emission impacts of coal combustion at the Four Corners Power Plant, because such analysis "would have merely duplicated recent and ongoing efforts of EPA and the State of New Mexico." Respondent's Brief (Doc. 53) at 42. In support of this argument, Respondents cite EPA's development of Source-Specific Federal Implementation Plans for the Four Corners Power Plant and EPA's approval of the state of New Mexico's Air Quality Implementation Plan. These documents contain extensive analysis and discussion of the air quality impacts of coal combustion at the Four Corners Power Plant specifically, and in the Four Corners region generally. Respondents also cite EPA's development of National Emission Standards for Regional Haze and for Mercury.
As a threshold matter, Petitioners argue that there is no evidence that OSM actually relied on these documents in the process of preparing its EA for the proposed mine expansion. As Petitioners note, OSM failed to specifically refer to these documents in its EA or in its response to comments. Moreover, OSM failed to follow any accepted procedures for either including as cooperating agencies the agencies responsible for these documents or for tiering to these documents. I find Petitioners' argument on this point persuasive.
NEPA expressly allows for inter-agency cooperation, see 40 C.F.R. §§ 1506.2, 1506.3, and for reference and reliance upon other NEPA documents, see 40 C.F.R. §§ 1502.20, 1502.21. There is, however, no evidence in the administrative record indicating that OSM availed itself of these procedures. OSM did not engage the EPA or the New Mexico Department of Environmental Quality as cooperating agencies, see AR 1-2-11-18 (listing cooperating agencies), and it did not list these documents in its list of other environmental studies it considered as part of its NEPA analysis. See AR 1-2-11-25 (listing related environmental studies). As Respondents themselves acknowledge, the EPA's regional haze rule was not finalized at the time of OSM's decision; OSM could not have incorporated that document into its EA. Transcript of Oral Argument (Feb. 18, 2015) at 37. Furthermore, OSM did not cite the EPA's mercury regulations in its EA or in its response to comments. Id. at 52, 103 S.Ct. 2856. OSM's passing reference to these documents in the context of its cumulative impact analysis and its legal briefing cannot cure its failure to meaningfully analyze and discuss the environmental impacts of NTEC's proposed expansion. See Pennaco Energy, Inc. v. U.S. Dep't of Interior, 377 F.3d 1147, 1159 (noting that an agency's post hoc analysis does not satisfy NEPA).
Furthermore, even if OSM did rely on these documents in the process of preparing its EA for the proposed mine expansion, OSM's failure to disclose in the EA its reliance on these documents or to identify in the EA the EPA or the New Mexico Department of Environmental Quality as cooperating agencies denied Petitioners, and the public at large, the opportunity to review and comment on the adequacy of OSM's analysis of the impacts of the proposed mine expansion. OSM's failure to provide such notice and opportunity to comment runs afoul of NEPA, which requires OSM to make information available to the public so that it "may also play a role in both the decisionmaking process and the implementation of that decision." Robertson, 490 U.S. at 349, 109 S.Ct. 1835.
Finally, even if OSM had properly incorporated these documents into its EA, none of the cited documents analyzes the impacts of mercury pollution from Four Corners Power Plant on aquatic life in the San Juan River watershed. Petitioners' Reply (Doc. 55) at 42. As noted supra, even miniscule changes in the rate and amount of mercury deposition can have significant impacts on the environment surrounding the Four Corners Power Plant. Nonetheless, OSM failed to cite in its EA or in its response to comments any document analyzing the particular impacts of mercury deposition resulting from the combustion of coal mined as a result of the Area IV North expansion.
Respondents argue that OSM was not required to consider the combustion-related impacts of the proposed mine expansion because OSM has "little, if any, authority to address the effects of emissions from the [Four Corners Power Plant]." Respondents' Brief (Doc. 53) at 46. Specifically, Respondents note that BHP was not required to submit any information relating to the combustion-related impacts of its proposed mine expansion, and they note that OSM cannot impose any conditions on the operation of the Four Corners Power Plant. Id. at 47-48.
These arguments, though legally correct, do not excuse OSM's obligation to consider the combustion-related impacts of the proposed mine expansion. OSM is not required to consider the effects of an action that it "has no ability to prevent," Dep't of Transp. v. Public Citizen, 541 U.S. 752, 770, 124 S.Ct. 2204, 159 L.Ed.2d 60 (2004); however, its regulations allow it to deny NTEC's proposed expansion if it determines that the expansion would "affect the continued existence of endangered or threatened species or result in destruction or adverse modification of their critical habitats, as determined under the Endangered Species Act of 1973." 30 C.F.R. § 773.15. If OSM were to consider the combustion-related impacts and determine that they would affect the continued existence of endangered or threatened species, it would be required to deny NTEC's Permit Revision Application.
Finally, Respondents argue that OSM's ongoing preparation of an EIS for the Navajo Mine and the Four Corners Power Plant obviates the need to analyze the combustion-related impacts of the proposed expansion. This forthcoming EIS, which will "inform upcoming decisions on applications submitted by [NTEC] and other entities seeking, among other things, renewal of the life-of-mine permit, issuance of a new permit to authorize mining in additional areas covered by [NTEC's] existing lease, and authorization of continued operation of the FCPP," does not fulfill OSM's obligation to pause and consider the likely environmental impacts of NTEC's proposed expansion before approving the Permit Revision Application. See Hillsdale Envtl. Loss Prevention, Inc. v. U.S. Army Corps of Eng'rs, 702 F.3d 1156, 1166 (10th Cir.2012).
Petitioners also argue that OSM should be required to complete an EIS for NTEC's Permit Revision Application. Because OSM did not sufficiently consider the combustion-related effects of the proposed expansion in concluding that the proposed expansion will have no significant environmental impact, I think it proper to withhold my judgment, so that OSM can have an opportunity in the first instance to consider whether, in combination with the other impacts analyzed in its EA, these indirect effects will have a significant impact on the environment such that an EIS will be required.
NEPA does not forbid an agency from engaging in environmentally destructive activities, it merely requires that the agency adequately consider the environmental impacts of its activities before committing resources to its chosen course of action. Because OSM failed to adequately consider the reasonably foreseeable combustion-related effects of NTEC's proposed expansion of operations at the Navajo Mine, the Petition for Review of Agency Action is GRANTED.
In light of this decision and pursuant to the Joint Case Management Plan, the parties shall confer in an effort to reach an agreement with respect to the appropriate remedy. If no agreement as to the appropriate remedy is reached, the parties shall submit no more than ten pages of briefing addressing the appropriate remedy no later than March 23, 2015.
