On August 19, 2024, the U.S. District Court for the District of Maryland issued its merits decision in Sierra Club et al. v. NMFS, API, et al., No. 8:20-cv-03060-DLB, which vacated the U.S. Department of Commerce, National Marine Fisheries Service’s (“NMFS”) 2020 programmatic Biological Opinion on the Federally Regulated Oil and Gas Program Activities in the Gulf of Mexico (the “2020 BiOp”), and corresponding Incidental Take Statement (“ITS”), for violations of the Endangered Species Act (“ESA”), 16 U.S.C. §§ 1531 et seq., and Administrative Procedure Act (“APA”), 5 U.S.C. §§ 551 et seq. The court made the vacatur of the 2020 BiOp effective as of December 20, 2024. In doing so, the court noted that “‘[w]ithout an operative BiOp and ITS for all activities that could incidentally “take” ESA-protected species, [the U.S. Department of Interior, Bureau of Safety and Environmental Enforcement (“BSEE”) and Bureau of Ocean Energy Management (“BOEM”)] would likely request a site-specific consultation with NMFS on each plan and permit submitted for approval’” and advised federal agencies and the regulated community to begin “planning for any period between the vacatur of the 2020 BiOp and the promulgation of a new one . . . ‘[to avoid] a rushed, under-resourced, and ad hoc’ alternative.”  Per an NMFS motion to alter or amend the district court judgement filed on September 16, 2024, NMFS does not anticipate completing a new BiOp until May 2025.

Unless there is a change in either the effective date of the vacatur or the completion of the new BiOp, there will be a gap of BiOp and ITS coverage. Practically, this could mean that during the interim period, new authorizations by BSEE or BOEM may need individual ESA consultations. These individual ESA consultations would, at a minimum, introduce additional delays in these approvals and distract agency resources from timely completing the new BiOp. In addition, operators’ activities pursuant to existing approvals may not have protection for incidental takes. As such, prudent operators will need to carefully consider that risk when determining whether to continue certain activities until such protections from incidental takes is restored.

The BiOp and Endangered Species Act Compliance

ESA § 7,  16 U.S.C. § 1536, requires federal agencies ensure an agency action “is not likely to jeopardize the continued existence of any endangered [] or threatened species[.]” Id. § 1536(a)(2). Any agency whose action “may affect” ESA protected species, i.e., the “action agency,” must consult the “expert agency” before taking that action. 50 C.F.R. § 402.14(a). Those ESA § 7 consultations are formalized in a BiOp, and if the expert agency concludes that the action is likely to jeopardize a species or result in harm to its habitat, i.e., a jeopardy determination, then the expert agency must also propose a reasonable prudent alternative (“RPA”) to avoid those adverse effects. 16 U.S.C. § 1536(b)(3)(A); 50 C.F.R. § 402.14(h). Additionally, even if there is no jeopardy determination, if the action is reasonably certain to lead to an unintentional “take” of a protected species, i.e., to harass, harm, pursue, hunt, shoot, wound, kill, trap capture, or attempt to engage in any such conduct per 16 U.S.C. § 1532(19), then an ITS that sets the amount or extent of permissible takes is required under ESA § 9, 16 U.S.C. §1538. 50 C.F.R. § 402.14(i).

The Challenge to the 2020 BiOp

On March 13, 2020, the 2020 BiOp replaced the NMFS’s prior 2007 BiOp. Seven months later, Plaintiff nonprofit environmental organizations Sierra Club, Turtle Island Restoration Network, Center for Biological Diversity, and Friends of the Earth (the “Plaintiffs”) filed their challenge of the 2020 BiOp, its environmental analyses, jeopardy analyses, RPA, and ITS. The American Petroleum Institute, EnerGeo Alliance, National Ocean Industries Association (collectively, the “Industry Group Intervenors”), and Chevron U.S.A. Inc. (“Chevron”) successfully moved to intervene in support of Defendant NMFS’s position that the 2020 BiOp was valid. But after four years of litigation, the District of Maryland ruled in favor of Plaintiffs and invalidated the 2020 BiOp as contrary to law, effective December 20, 2024, for the following reasons:

1. The 2020 BiOp underestimates the risk and harms of oil spills to protected species because: (a) NMFS unlawfully defers to BOEM’s conclusion that an oil spill larger than one million barrels was unlikely to occur and thus should not be considered as an effect of the proposed action, despite serious countervailing evidence, thereby failing to make an “independent determination” as required by ESA § 7; and (b) multiple inconsistencies in the record render the 2020 BiOp arbitrary and capricious in violation of the APA, including offering explanations which run contrary to the record like the conclusion that an oil spill of more than one million barrels would not be an effect of the action despite NMFS’s own findings otherwise, failing to consider the acute effects of the two very large oil spills which NMFS did anticipate from the proposed action, and only conducting a jeopardy analysis for the Rice’s whale and Gulf sturgeon instead of all listed species.
2. NMFS’s jeopardy analyses for the Rice’s whale and Gulf sturgeon are arbitrary and capricious because the 2020 BiOp first conceded that the Deepwater Horizon oil spill (“DWH”) caused reductions to the Rice’s whale and Gulf sturgeon populations and impacted their reproductive ability, yet the agency utilized their pre-DWH populations and failed to incorporate those findings into the jeopardy analyses.
3. In its 2020 BiOp, the NMFS found that Gulf of Mexico (“GOM”) oil and gas operations would only jeopardize the survival and recovery of one species: the endangered Rice’s whale. NMFS’s RPA for the Rice’s whale (which requires implementation of a nighttime closure and 10 knot or less speed restriction during the day year-round in the Rice’s whale area) is arbitrary and capricious because the agency only analyzed two of the five stressors it identified as likely to jeopardize the Rice’s whale, without explaining why addressing just those two problems (vessel impacts and noise) was sufficient and with no discussion of how the measures it proposed would prevent the jeopardy those stressors cause. Notably, the RPA claim did require standing, and the court concluded that two Plaintiff organizations, Turtle Island Restoration Network and Sierra Club, had standing to challenge on behalf of their members.
4. Finally, NMFS’s ITS violated ESA § 9 because the 2020 BiOp first anticipated incidental takes from oil spills but then the ITS failed to recognize oil spill takes as incidental takes or address anticipated takes from oil spills. The ITS also adopted the irrational incidental take surrogate of total vessel distance traveled in the GOM for determining how many listed species would be taken by vessel strikes (which lacks a causal link to the relevant take) and failed to consider where and when those vessels would be traveling (factors which were causally connected). “By ignoring vessel location, . . . the surrogate predictably will fail to trigger the reinitiation of consultation even when the number of vessel strikes would demand it.”

On remand, the agency must also resolve any additional matters the Plaintiffs raise, likely including their arguments which the court did not reach, including the challenge to the primary study relied on in the 2020 BiOp, the JI Study, and the claim that “NMFS failed to account properly for climate change.”

The Agencies and Industry Are Attempting to Bridge the BiOp Coverage Gap

On September 11, 2024, the Industry Group Intervenors and Chevron noticed appeals to the Fourth Circuit Court of Appeals of the district court’s decision, which have been consolidated. On September 16, 2024, NMFS filed a motion to alter or amend judgment, which includes declarations by NMFS, BSEE, and BOEM, and requests that vacatur of the 2020 BiOp be delayed until May 2025. That same day, the Industry Group Intervenors and Chevron also filed a similar motion in the district court, which includes 32 industry declarations and, alternatively, requests that the court stay its decision, including the December 20th vacatur of the 2020 BiOp, pending resolution of the appeal. The agency and individual company declarations address impacts of a gap between vacatur of the 2020 BiOp and issuance of a new BiOp, which NMFS states it can complete by May 21, 2025.  These include concerns whether existing plans, permits, and other approvals issued by BSEE, BOEM, and the Environmental Protection Agency in reliance on the 2020 BiOp will remain valid, whether, without the ITS or a replacement, GOM offshore oil and gas operations could lead to an “unauthorized take” in violation of  ESA § 9, which could lead to imposition of civil and potentially criminal penalties under the ESA, and whether, in the absence of a valid BiOp, agencies will need to curtail further permitting unless an individual ESA § 7 consultation is performed for each and every permit, plan, or other approval sought, which agency and industry declarants agree is not feasible. As a result, once the 2020 BiOp is no longer valid, GOM oil and gas operations and production may be expected to be slowed down or even be shut in until a new BiOp is in place or some other resolution is achieved. The BSEE declaration describes any gap between BiOps as having “highly disruptive consequences, including compromising the safety of ongoing operations and increasing the risk of harm to the very species that the ESA is intended to protect.”  NMFS has requested that the trial court rule by October 21st on its motion to delay the 2020 BiOp vacatur date until the new BiOp is complete in May 2025, and the NMFS declaration indicates that NMFS may issue an “interim BiOp” by December 20th in the event the court declines to grant its motion.  The Industry Group Intervenors and Chevron request a district court ruling by the same date in order to allow time in advance of December 20th for them to seek emergency relief from the Fourth Circuit and, potentially, the United States Supreme Court.

Contact Liskow attorneys Jana Grauberger, Greg Johnson, and Kyrie Buffa for more information on this topic and visit the Federal Offshore Regulatory and Environmental Compliance and Enforcement Defense practice pages on our website.

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