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A recent decision by a district court judge in New Mexico rejecting a Bureau of Land Management finding of no significant impact (FONSI) for oil and gas leases has raised concerns from leading environmental law experts in the West.
Senior U.S. District Court Judge M. Christina Armijo’s ruling cancelled leases on approximately 20,000 acres in the Four Corners area of New Mexico, remanding the decision to the BLM “for further analysis and action.”
BLM had found “no significant impact” for the environment for the oil and gas leases approved in October 2015.
Five environmental groups, including WildEarth Guardians and Amigos Bravos, sued the BLM because it did not find sufficient cause under FONSI to require an environmental assessment (EA) or an environmental impact statement (EIS), a far more prolonged and detailed analysis, they alleged.
Delays and Fundraise
Bret Sumner, an oil and gas attorney for Beatty & Wozniak, told Western Wire in an extensive interview that the approach of challenging lease sales is not really new, but the scope has expanded dramatically as administrations have shifted politically.
“This trend started challenging lease sales even under the Obama administration in 2015 and 2016, and that started with discrete challenges on certain federal oil and gas lease sales, particularly in Wyoming, but now under the current administration is expanded to essentially every single BLM oil and gas lease sale being challenged in one form or another throughout the West,” Sumner said.
According to Sumner, the tactic is used to stall development in favor of applying pressure politically and, more specifically, as a fundraising campaign by the groups initiating the NEPA challenges.
Despite the pervasive attempt to halt oil and gas lease sales, Sumner said, the effort has mostly been a failure—for now.
“It has not been a very effective tactic in terms of stopping oil and gas leasing or stopping development of those leases. Traditionally, absent a court injunction, these leases remain in full force in effect pending this legal challenge,” Sumner said.
The court ordered a substantive remedy for violation of a procedural statute in cancelling the leases and forcing BLM to go back for more analysis, something Sumner said broadly shouldn’t happen.
“These leases are essentially property rights and the plaintiffs are bringing a challenge to a procedural statute and the legal precedent is, when you have a challenge of procedural statute, the remedy should simply be a procedural remedy… the only remedy should be that the BLM suspend the leases and engage in additional analysis” Sumner said.
Sumner said the establishing law’s intent is critical to understanding how a case should be adjudicated.
“It’s not called the National Environmental Protection Act, it’s called the National Environmental Policy Act, there is no requirement that they reach a substantive result. They are only required to perform the analysis to inform agency decision making,” Sumner said.
Weaponizing NEPA
James Coleman, assistant professor of Law at Southern Methodist University’s Dedman School of Law, and an expert in energy and regulatory law, told Western Wire that the lower courts’ NEPA rulings have not found any support at the U.S. Supreme Court.
“The courts have always enforced it pretty aggressively and really insisted that agencies do more and more in terms of how they analyze in terms of how they analyze when they’re approving a project,” Coleman said.
“Meanwhile, every time it gets to the Supreme Court, the Supreme Court basically says look this is just a procedural thing, it’s just basically so the agencies are supposed to consider this to a reasonable extent and basically has multiple times told the lower courts you’re asking too much of these agencies,” Coleman added.
The goal of the groups challenging BLM is to have the initial analysis struck down in order to delay or halt the projects.
“Environmental groups have realized that if you can get that analysis struck down you can maybe be able to stop a project,” Coleman said. “So I think the statute has always been used for things that it wasn’t really intended for.”
BLM agency officials have adapted to the extensive challenges by attempting to preempt the lawsuits with longer and longer environmental reviews, Coleman said.
“When this statue was passed, people thought that this would be a 100-page environmental review. Now they’re generally over thousands of pages. And there are still regulations on the books that say they shouldn’t be longer than 150 pages,” Coleman said.
In April, Coleman told the House Natural Resources Committee that the NEPA process was “broken” and posed a threat to “America’s new energy renaissance.” He told the committee that, compared to countries like Canada, the U.S. environmental review process was “simply unreasonable.”
By his estimate, the average review period for projects initiated under the Obama administration stood at five years for completion by 2016, and that current reviews could last at least 6 years, and even longer.
Those additional years of review process are entirely attributable to agency concerns its reviews will be struck down by the court, according to Coleman.
“The result of that has been that these environmental review processes have been getting longer and longer,” Coleman said.
The frustrating delays are beginning to gain traction outside the court room, as legislators realize projects in their districts now take years to get off the ground and provide economic benefits.
“I think there’s a bipartisan recognition that they’re just too long now,” Coleman said.
It’s simply a question of “diminishing returns,” he added.
“[P]robably within 60 days you know the majority of the environmental issues that would be there on a project and by a year really you should have done enough study,” Coleman said.
According to Sumner, the review delays are neither helpful to the agency in reaching a more informed analysis, or in protecting the environment.
“They’re using NEPA just as a tool to try to create more analysis, try to create more delays but it really doesn’t do anything to inform BLM’s decision making and whether or not to offer these lands and minerals for lease,” Sumner said. “That really underscores how these challenges have nothing to do with NEPA compliance as much as it is they fundamentally disagree with the policy of leasing federal oil and gas resources.”
The challenges themselves show no signs of abating in the future.
“This is the most critical issue right now that’s in front of the courts. And that is, for an upstream oil and gas lease sale, what level of analysis do you need to conduct?” Sumner said.
Case law says an agency is only required to analyze impacts that are within the scope of its jurisdiction and regulatory authority, he said.
BLM lacks jurisdictional and regulatory authority to regulate under the Clean Air Act, a power that falls to the Environmental Protection Agency exclusively.
“BLM does not have the jurisdictional authority or the regulatory authority to regulate greenhouse gases. That is something that falls under the Clean Air Act, that is something that falls under the purview of the Environmental Protection Agency and is not something that falls under the jurisdiction of BLM,” Sumner said.
“While [BLM] can do some form of qualitative analysis and forecasting, they shouldn’t be required to do this incredibly detailed quantitative analysis on downstream consumption and resulting greenhouse gas emissions because they have no legal ability to regulate those downstream uses or that downstream consumption,” he added.
Coleman agreed.
“It doesn’t make any sense to consider these downstream emissions for two reasons. One is, the BLM isn’t responsible for burning of that oil and gas and the ultimate cars and power plants and houses where it’s going to be burned. So I think under the Supreme Court’s test, there’s no question that that’s within a different agency’s control,” Coleman said.
Secondly, “does it make policy sense to make them consider it? I would say no,” Coleman said. “I don’t think you can really say anything useful about how an individual project is going to affect global markets, which is what you have to consider what the climate impact of it is.”
“The argument is about whether you have to consider all these environmental impacts that are far downstream that happen in different states, different countries, different land entirely. To what extent should those be considered?” Coleman asked.
Sumner concluded that BLM is the last agency that should be tasked with such a massive undertaking, given agency limitations.
“What they’re being asked to do by these plaintiffs is just not technically or economically or scientifically even possible at this point,” he said.
The pressure brought by groups challenging BLM’s findings is virtually unlimited, Sumner said. A regulatory death by a thousand cuts.
“They’re [environmental groups] only limited by the creativity in terms of the types of claims they can bring or allegations they can make that BLM failed to analyze whatever particular resource,” he said.
So far the results have been a mixed bag, according to Coleman. District courts have struck down permits, as in the recent New Mexico case. Many times, environmental petitioners lose their cases.
Even though most challenges are unsuccessful, Coleman said, they’ve won enough times to make the environmental review process daunting and excessive.
“Environmental groups, they win some they lose some, but the issues over the last 40 years they’ve won enough times that these reviews keep getting longer,” Coleman said.
A New Mexico judge threw out an activists’ lawsuit against BLM in April. The plaintiffs—Diné Citizens Against Ruining Our Environment, San Juan Citizens Alliance, WildEarth Guardians, and Natural Resources Defense Council—sued the agency in 2015 for approving and issuing drilling permits in the San Juan Basin in Northwest New Mexico, near the Chaco Culture National Historic Park.
The plaintiffs alleged violations under NEPA for “failing to adequately consider the environmental impacts of hydraulic fracturing and horizontal drilling in developing the Mancos Shale in the San Juan Basin,” and the National Historic Preservation Act (NHPA) for “failing to consider the indirect effects that well pads would have on Chaco Culture National Historic Park.”
Judge James Browning dismissed all of the claims brought by the activists with prejudice, concluding that “BLM complied with NEPA’s requirements” and “considered the effects on historical sites with the wells’ areas of potential effects.”
The decision has been appealed to the 10th U.S. Circuit Court of Appeals by the plaintiffs.
Mountain States Legal Foundation President William Perry Pendley told Western Wire that the weaponization of NEPA has created a heckler’s veto of any project that falls afoul of aggressive environmental groups.
“That is my experience. NEPA is a terrible statute that allows almost anyone to say ‘no’ and no one to give a definitive ‘yes,’” Pendley said.
“It should be repealed because it allows any judge who doesn’t like a plan, project, or proposals to shut it down, often for decades,” Pendley continued. We had a timber project that would save lives stopped by the 9th Circuit because of a concern over elk habitat. Now of course the issue du jour is climate change and alleged failure to study it adequately.”
“It just becomes a question of, does the judge like the project or not? Because there’s just such elasticity in NEPA that there’s plenty of room for a judge to say, ‘no, it’s not a hard enough look,’” Pendley added.
Ultimately, its the local communities that suffer economic hardship as a result of the delays.
“When the environmental groups make it impossible for the company to operate in a given area, the company maybe suffers for short term, but they’ll go somewhere else or develop some other project. But the local people who are dependent on those jobs for revenue to pay for their schools and keep their hospitals open, they’re the ones who are going to suffer,” Pendley concluded.
