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Environmental Defense Center v. Bureau of Ocean Energy Mgmt.

United States Court of Appeals for the Ninth Circuit
36 F.4th 850 (9th Cir. 2022) (2022)
ELI5:

Rule of Law:

A federal agency's programmatic environmental review that authorizes a category of future activities is a final, reviewable agency action that requires a 'hard look' analysis under NEPA. If substantial questions about the action's environmental significance exist, the agency must prepare a full Environmental Impact Statement (EIS).


Facts:

  • Oil companies operate 23 platforms in the Pacific Outer Continental Shelf off the coast of California, using development plans approved between 1967 and 1989.
  • To prolong production from aging wells, these companies utilize well stimulation treatments, such as hydraulic fracturing (fracking) and acidizing.
  • These treatments involve injecting chemicals, including known carcinogens and toxins, at high pressure into undersea rock formations, posing risks to marine wildlife and potentially increasing the risk of oil spills.
  • The Santa Barbara Channel, where most of the platforms are located, is a unique ecological area known as the 'Galapagos of North America,' and is home to numerous endangered species and cultural resources.
  • Through Freedom of Information Act (FOIA) requests, the Environmental Defense Center discovered that federal agencies had previously granted 51 permits for these treatments without conducting any environmental review.

Procedural Posture:

  • The Environmental Defense Center (EDC) and Center for Biological Diversity (CBD) filed separate lawsuits against federal agencies for violating NEPA by approving well stimulation permits without environmental review.
  • The parties entered into settlement agreements, which required the agencies to prepare a programmatic Environmental Assessment (EA) and impose a temporary moratorium on new permits.
  • The Bureau of Ocean Energy Management (BOEM) and Bureau of Safety and Environmental Enforcement (BSEE) issued a final programmatic EA and a Finding of No Significant Impact (FONSI).
  • Environmental groups and the State of California filed new lawsuits in the U.S. District Court, alleging the EA/FONSI violated NEPA, the ESA, and the CZMA.
  • The cases were consolidated, and American Petroleum Institute, Exxon, and DCOR intervened as defendants.
  • The district court denied the defendants' motion to dismiss for lack of jurisdiction and ripeness.
  • On cross-motions for summary judgment, the district court ruled for the defendants on the NEPA claims but for the plaintiffs on the ESA and CZMA claims, issuing an injunction.
  • All parties appealed the district court's judgment to the U.S. Court of Appeals for the Ninth Circuit.

Locked

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Issue:

Does a federal agency's programmatic Environmental Assessment and Finding of No Significant Impact, which allows for future permitting of offshore well stimulation treatments, constitute a final agency action that violates the procedural requirements of the National Environmental Policy Act (NEPA), the Endangered Species Act (ESA), and the Coastal Zone Management Act (CZMA)?


Opinions:

Majority - Gould, J.

Yes, the programmatic Environmental Assessment and Finding of No Significant Impact constitute a reviewable final agency action that violates the procedural requirements of NEPA, the ESA, and the CZMA. First, the EA/FONSI is a final agency action because it marks the consummation of the agency's programmatic decision-making process and creates legal consequences by lifting a moratorium and allowing the permitting process for well stimulation treatments to proceed. Second, the agencies violated NEPA by failing to take a 'hard look' at the environmental consequences; they relied on two flawed and arbitrary assumptions: that treatments would be infrequent (based on incomplete data) and that an unrelated EPA permit would mitigate all water quality impacts. The agencies also failed to consider a reasonable range of alternatives. Furthermore, an EIS was required because there were 'substantial questions' about the action's significance, given the unique and ecologically critical location, the highly uncertain and unknown risks of the chemicals involved, and the potential adverse effects on endangered species. Third, the EA/FONSI constituted 'agency action' under the ESA, triggering a mandatory consultation duty with expert wildlife agencies, which the agencies failed to complete before issuing their finding. Finally, the decision to allow these treatments was a 'Federal agency activity' under the CZMA, requiring a consistency review with California's coastal management program, which was not performed.



Analysis:

This decision reinforces that federal agencies cannot avoid comprehensive environmental review for broad programs by segmenting their analysis and deferring it to the site-specific permit stage. It solidifies that programmatic decisions are themselves 'final agency actions' subject to immediate judicial review for procedural compliance. The ruling strengthens the 'hard look' doctrine by invalidating agency findings based on unsubstantiated assumptions and reliance on other agencies' inadequate permits. By requiring an EIS in the face of scientific uncertainty and unknown risks, the court lowers the bar for plaintiffs challenging an agency's decision to forgo the more rigorous EIS process, especially for novel or controversial activities.

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