In a recent opinion released by the United States Court of Appeals for the District of Columbia Circuit, the court declined to vacate a deficient environmental impact statement (“EIS”) prepared in connection with two offshore lease sales held in 2018, the records of decision announcing the sales, or the leases issued.

The court stated that although vacatur is the typical remedy, the decision “depends on the seriousness of the order’s deficiencies (and thus the extent of doubt whether the agency chose correctly) and the disruptive consequences of an interim change that may itself be changed.”[1] The court point out that vacatur would be highly disruptive to the lessees, who have paid millions of dollars in lease bonuses and lease development activities including drilling and have acted in reliance on those leases for four years. It also acknowledged that a redo of the lease sales would be tainted by the prior publication of the lessee’s valuation of the leases. The court found that even though deficient, the supplemental EIS seemed correctible, and even partial relief would be disruptive to the lessees.[2]

The appeal concerned the three EISs prepared by the Department of Interior’s Bureau of Ocean Energy Management (BOEM) prior to Lease Sales 250 and 251. These included a programmatic EIS, which addressed the environmental impacts of the five-year plan proposed by the Interior, a narrower EIS which addressed the impacts of leasing in the Gulf of Mexico, and a supplemental EIS which was specific to Lease Sales 250 and 251.[3]

After the sales, three environmental groups sued Interior and BOEM, asserting that the supplemental EIS did not comply with the National Environmental Policy Act (NEPA) which governs the preparation of EISs. They alleged that (1) BOEM failed to adequately consider a “no action” alternative, (2) BOEM unreasonably assumed two environmental rules designed to reduce the risk of oil and gas spills would remain in effect, and (3) that BOEM unreasonably assumed that all rules would be effectively enforced.[4] The district court granted summary judgment in favor of Interior, resulting in the environmental groups’ appeal.

The appellate court considered each of the environmental groups’ allegations separately. First, the court stated that BOEM’s conclusion that the cancellation of a single lease would only postpone development in the region and would not materially change overall environmental impacts was reasonable and not arbitrary.[5] In response to the appellees’ second argument, the court concluded that “BOEM permissibly declined to consider the potential rule changes, which were too inchoate to require discussion in the supplemental EIS.”[6] However, the court determined that BOEM’s failure to address a report about deficiencies in the Bureau of Safety and Environmental Enforcement’s (BSEE) enforcement of existing regulations was arbitrary.[7]

In all three EISs, BOEM factored BSEE’s work into its analysis, referring to BSEE’s “rigorous” inspection and enforcement programs, however BOEM never addressed a Government Accountability Office report which criticized BSEE, despite commenters asking BOEM to address the report. BOEM promised to address the report at the leasing stage, but later told commenters that the issues were outside the scope of the EISs. The court found BOEM’s failure to address the report arbitrary, stating that in order to “engage in reasoned decisionmaking, an agency must respond to ‘objections that on their face seem legitimate.’”[8] Further, the court stated that since BOEM promised to consider the report at a later stage, it should have explained its decision not to do so. Interior argued that the report does not raise significant concerns about BSEE’s enforcement, however, the court stated that BOEM should have explained this position in the EIS.[9]

The appellate court reversed the grant of summary judgment in part, and remanded for further agency consideration, but declined to vacate the supplemental EIS, the records of decision announcing the sales, or the leases issued through the sales.[10]

Click here to read the full opinion.

[1] Gulf Restoration Network v. Haaland, No. 20-5179, 2022 WL 3722429, at *7 (D.C. Cir. Aug. 30, 2022) (quoting Allied-Signal, Inc. v. U.S. NRC, 988 F.2d 146, 150–51 (D.C. Cir. 1993)).

[2] Id.

[3] Id. at *2.

[4] Id.

[5] Id. at *3.

[6] Id. at *4.

[7] Id. at *6.

[8] Id. (Quoting PPL Wallingford Energy LLC v. FERC, 419 F.3d 1194, 1198 (D.C. Cir. 2005).)

[9] Id.

[10] Id. at *7