Opinion ID: 187344
Heading Depth: 1
Heading Rank: 3

Heading: merits of the remaining justiciable claims

Text: This court utilizes a hybrid standard of review when reviewing a leasing program for compliance with OCSLA. See Watt I, 668 F.2d at 1300. Findings of ascertainable fact are guided by the substantial evidence test. Id. at 1302. Under this standard, evidence upon which a finding is made must be more than a scintilla, but may be less than a preponderance of the evidence. FPL Energy Maine Hydro LLC v. FERC, 287 F.3d 1151, 1160 (D.C.Cir.2002). An agency's policy judgments are reviewed to ensure that the decision is based on a consideration of the relevant factors and whether there has been a clear error of judgment. Watt I, 668 F.2d at 1302. This court gives substantial deference to the Secretary of Interior's interpretation of ambiguous provisions in OCSLA, so long as that interpretation is a permissible construction of the statute. See id. at 1302-03. However, a statutory interpretation that does not effectuate Congress' intent must fall. Id. at 1303.
Petitioners raise two distinct but related OCSLA-based climate change claims. First, Petitioners argue that the Secretary violated sections 18(a)(1) and (a)(3) of OCSLA by failing to account for the environmental costs resulting from consumption of the fossil fuels extracted from the OCS. Second, Petitioners contend that Interior violated section 18(a)(2) of OCSLA because Interior failed to adequately consider climate change caused by consumption of these fossil fuels and the present and future impact of climate change on OCS areas as section 18(a)(2)(H) requires. To the extent these claims concern Interior's alleged failure to consider the effects brought about by consumption of oil and gas extracted under the Program, we hold that OCSLA does not require Interior to consider the global environmental impact of oil and gas consumption before approving a Leasing Program. Therefore, OCSLA does not require Interior to consider the further derivative environmental impact that oil and gas consumption has on OCS areas. Accordingly, Petitioners' OCSLA climate change claims fail. Contrary to Petitioners' claims, the text of OCSLA does not require Interior to consider the impact of consuming oil and gas extracted under an offshore Leasing Program. Under Section 18(a) of OCSLA, Interior must prepare Leasing Programs so that the size, timing, and location of leasing activity ... will best meet national energy needs. 43 U.S.C. § 1344(a). Section 18(a)(1) states further that Interior must consider the values of resources contained in the outer Continental Shelf, as well as the potential impact of oil and gas exploration on other resource values of the [OCS] and the marine, coastal and human environments. 43 U.S.C. § 1344(a)(1) (emphasis added). Similarly, section 18(a)(3) states that [t]he Secretary shall select the timing and location of leasing ... so as to obtain a proper balance between the potential for environmental damage, the potential for the discovery of oil and gas, and the potential for adverse impact on the coastal zone. 43 U.S.C. § 1344(a)(3). We noted in Watt I that such a cost-benefit analysis of oil and gas extraction under section 18(a)(3) is satisfactory when an individual area's potential benefits are weighed against its potential costs. See Watt I, 668 F.2d at 1318. The Secretary therefore need only consider the potential for environmental damage on a localized area basis. And, under section 18(a)(2), Interior is required to determine the impacts of exploration, development, and production of oil and gas. As the statutory language and our precedent show, Interior's obligations under OCSLA extend to assessing the relative impacts of production and extraction of oil and gas on the localized areas in and around where the drilling and extraction occurred. Interior need not consider the impacts of the consumption of oil and gas after it has been extracted from the OCS. OCSLA therefore concerns the local environmental impact of leasing activities in the OCS and does not authorizemuch less requireInterior to consider the environmental impact of post-exploration activities such as consuming fossil fuels on either the world at large, or the derivative impact of global fossil fuel consumption on OCS areas. Moreover, Interior's continuing duty to promulgate five-year Leasing Programs under OCSLA renders Interior's consideration of the effects of oil and gas consumption unnecessary. Petitioners argue that Interior's consideration of the environmental impacts of greenhouse emissions associated with the Program might have altered Interior's ultimate decisions concerning the Program's leasing activities, such that the OCS areas at issue here might not have been included in the Program. But Petitioners' argument ignores the fact that Interior's decisions about the size and location of leasing areas or the timing of oil and gas extraction do not affect the impact that consuming oil and gas may have on climate change. That environmental impact is the same regardless of where and how the oil and gas are extracted. Therefore, even if, as Petitioners assert, Interior were not to adopt the Program at issue here, Interior's continuing duty to promulgate Leasing Programs would compel it to promulgate a different Leasing Program, potentially approving oil and gas extraction from other areas of the OCS. This extraction would presumably lead to the same overall consumption effects as those under the current Program. Petitioners' consumption-related claims appear to stem from the flawed premise that, before Interior approves an offshore oil and gas Leasing Program, it must first consider whether it should extract oil and gas from the OCS at all. But Congress has already decided that the OCS should be used to meet the nation's need for energy. Indeed, OCSLA instructs Interior to ensure that oil and gas are extracted from the OCS in an expeditious manner that minimizes the local environmental damage to the OCS. See 43 U.S.C. § 1344. Interior simply lacks the discretion to consider any global effects that oil and gas consumption may bring about. Interior was therefore correct to point out in its EIS that the more expansive effect of oil and gas consumption is a matter for the Congress to consider when decisions are made regarding the role of oil and gas generally, including domestic production and imports, in the Nation's overall energy policy. Consequently, it was unnecessary for Interior to consider the climate change effects brought about by the consumption of oil and gaseither as oil and gas consumption affects the global environment generally or the OCS areas specifically. Interior's decision to limit its inquiry to the effect of the Program's production activities on climate change is consistent with its obligations under OCSLA, and was not error. Here, there is no doubt that Interior considered the effects of the Program's production activities on climate change generally, and the present and future impact of climate change on the local OCS areas. In the EIS, which Interior incorporated by reference in its Program approval, Interior estimated the total amount of greenhouse gas emissions that would result from leasing, exploration, and development in the OCS, and examined the cumulative impact of these emissions on the global environment. Interior also noted that potential impacts are most pronounced in [the] Arctic Subregion, and could affect the areas of Alaska in which Petitioners assert an interest. Accordingly, Petitioners' OCSLA-based climate change claims fail.
In their OCSLA baseline data claim, Petitioners contend that Interior lacked sufficient baseline biological information for the Chukchi, Beaufort, and Bering Seas to rationally approve the Leasing Program. According to Petitioners, Section 20(b) of OCSLA requires Interior to establish, update, and monitor baseline information for OCS planning areas in a leasing program. See 43 U.S.C. § 1346(b). Petitioners argue that, despite this obligation, Interior has admitted that gaps exist in the data for the Beaufort, Bering, and Chukchi Seas. Notwithstanding the existence of these information gaps, Interior has indicated that it will defer the gathering of this data to fill these gaps until the Leasing Program reaches the later stages. Though Petitioners concede that Interior is not required to conduct all the comprehensive baseline research before approving the Leasing Program, Petitioners nevertheless argue that, in order for Interior to comply with OCSLA, Interior must either conduct comprehensive baseline research to fill these information gaps, or provide a research plan detailing how Interior intends to obtain this information before the next OCSLA stages. Petitioners argue that such a research plan is implicitly required by Section 18(b)(3) of OCSLA, which sets forth Interior's obligation to provide appropriations and staffing estimates for conducting environmental studies and preparing an EIS. See 43 U.S.C. § 1344(b)(3). Interior's failure to comply with either requirement before approving the Leasing Program has prevented Interior from fully considering Section 18(a)(2)'s factors, which, in turn, has skewed Interior's balancing of those factors under Section 18(a)(3) of OCSLA. See 43 U.S.C. §§ 1344(a)(2)-(3). As a result, Petitioners argue, the Leasing Program lacks any rational support. This argument is wholly without merit. Though Section 20(b) imposes a requirement to conduct additional studies to establish environmental information for a particular area, this obligation commences [s]ubsequent to the leasing and development of that area. 43 U.S.C. § 1346(b) (emphasis added). Where, as here, Interior has merely completed the approval stage of a leasing program, Section 20(b)'s additional research requirements are not yet implicated. Indeed, Petitioners' proper concession that Interior is not required to complete its comprehensive baseline research prior to approving the Leasing Program confirms this interpretation. In fact, this concession undermines Petitioners' argument that such research is required at the initial program approval stage. Having made such a concession, Petitioners cannot now credibly argue that Section 20(b) of OCSLA somehow required Petitioners to complete this research before the Leasing Program was approved. Even if Petitioners were able to rely on Section 20(b) to support their claim that the Leasing Program was irrational due to gaps in the baseline data, this argument would falter because, based on the record, Interior relied on substantial baseline evidence in approving the Leasing Program. As its final EIS demonstrates, Interior considered and chronicled the geological, biological, and environmental information of the Beaufort, Bering, and Chukchi Seas, and many of their inhabitants. To be sure, a review of areas as wide and diversely populated as these Arctic seas will likely miss some of the seas' myriad inhabitants. These gaps in information, however, must be considered in conjunction with the pyramidic structure of a five-year leasing program. Watt I, 668 F.2d at 1297. At this early stage of the Leasing Program, the existence of some gaps in the baseline data for these three seas is not fatal to the Leasing Program. This is also tempered by the fact that Interior has recognized that such gaps exist and has indicated its intention to conduct additional research to close them. North Slope, 642 F.2d at 613 (affirming the district court's denial of petitioners' OCSLA claim that research was insufficient because Interior acknowledged that [m]ore research is necessary; the research is being done). Petitioners are therefore left with their only remaining argument: to comply with OCSLA, Interior must provide a research plan detailing how it attempts to obtain the necessary baseline information before the next stage of the Leasing Program. However, OCSLA does not set forth a requirement that Interior must provide such a plan for obtaining this baseline data. Petitioners' claim that Section 18(b)(3) implicitly sets forth such a requirement is off the mark. Section 18(b)(3) states that a leasing program shall include estimates of the appropriations and staff required to ... conduct environmental studies and prepare any environmental impact statement. 43 U.S.C. § 1344(b)(3). In other words, Section 18(b)(3) simply requires that Interior estimate how many staff and how much money it needs to obtain environmental impact information. It does not require that Interior set forth a research plan detailing what exact environmental information Interior needs, or how or when Interior plans on obtaining that information. Petitioners' interpretation is therefore counter to the clear language of the statute. Accordingly, Petitioners' baseline data claim must fail.
Section 18(a)(2)(G) of OCSLA requires agencies to consider the relative environmental sensitivity of ... different areas of the outer Continental Shelf. 43 U.S.C. § 1344(a)(2)(G). In its efforts to comply with this requirement, Interior ranked the environmental sensitivity of various program areas in terms of only one factor: the physical characteristics of the shoreline of those areas. This ranking was based on Interior's use of the Environmental Sensitivity Index, developed by NOAA, which considered the sensitivity of different shoreline areas to oil spills, and ranked them on that basis. The study ranked each area on a scale of 1 to 10 (with 10 being a rating for an area most likely to be damaged long-term by oil spills). Petitioners contend that Interior's sole reliance on this study to measure the environmental sensitivity of the potential OCS leasing areas in the Leasing Program renders the Program improper. Interior counters that this court has stated that Section 18(a)(2)(G) provides no method by which environmental sensitivity ... [is] to be measured. Watt I, 668 F.2d at 1311. Accordingly, Interior argues that its adoption of the NOAA shoreline study to determine environmental sensitivity of OCS areas is a policy judgment that is entitled to substantial deference. Interior's argument is not consistent with controlling precedent. Our decisions in California v. Watt (Watt II), 712 F.2d 584 (D.C.Cir.1983), and Watt I set forth the standard for Interior's compliance with Section 18(a)(2)(G). In Watt II, we affirmed our holding in Watt I that all that is required for compliance with Section 18(a)(2)(G) is that the Secretary make a good faith determination of the relative environmental sensitivity ... of the various regions based upon the best `existing information' available to him. Watt II, 712 F.2d at 596 (quoting Watt I, 668 F.2d at 1313). Accordingly, the Secretary was free to choose any methodology `so long as it is not irrational.' Watt II, 712 F.2d at 596 (quoting Watt I, 668 F.2d at 1320). The Secretary's decision is not irrational so long as it is based on a consideration of the relevant factors. Watt I, 668 F.2d at 1317. Interior's interpretation of Section 18(a)(2)(G) is irrational. It was not based on a consideration of the relevant factors set forth therein. Section 18(a)(2)(G) states clearly that an agency must assess the environmental sensitivity of different areas of the outer Continental Shelf  in order to make its determination of when and where to explore and develop additional areas for oil. 43 U.S.C. § 1344(a)(2)(G) (emphasis added). Based on this language alone, Interior's use of the NOAA study runs afoul of this provision because it assesses only the effects of oil spills on shorelines. Interior provides no explanation for how the environmental sensitivity of coastal shoreline areas can serve as a substitute for the environmental sensitivity of OCS areas, when the coastline and proposed leasing areas are so distant from each other. This interpretation runs directly counter to the statutory language. Moreover, though Watt II and Watt I afforded Interior a great deal of leeway in determining how to comply with Section 18(a)(2)(G), they did not give Interior carte blanche to wholly disregard a statutory requirement out of convenience. The law plainly requires that Interior examine and compare the environmental sensitivity of different areas of the OCS. Though the law allows Interior to consider the environmental sensitivity of onshore areas to OCS development, it plainly does not allow Interior to consider only onshore areas. Interior's sole focus on the environmental sensitivity of shoreline areas to OCS development therefore falls short of what Section 18(a)(2)(G) requires. Accordingly, Interior's Section 18(a)(2)(G) analysis is inadequate. Our conclusion that Interior failed to properly conduct an environmental sensitivity analysis under Section 18(a)(2)(G) does not end our inquiry. We have consistently linked the adequacy of Interior's analysis under Section 18(a)(2) with its analysis under Section 18(a)(3). See Watt II, 712 F.2d at 599 & n. 75; Watt I, 668 F.2d at 1318. Section 18(a)(3) requires that, when preparing a leasing program, Interior select, to the maximum extent practicable, the timing and location of leasing ... so as to obtain a proper balance between the potential for environmental damage, potential for the discovery of oil and gas, and the potential for adverse impact on the coastal zone. 43 U.S.C. § 1344(a)(3). In essence, these three elements are a condensation of the factors specified in section 18(a)(2). Watt I, 668 F.2d at 1315. Though Section 18(a)(3) does not define specifically how Interior shall balance these three elements, Watt I, 668 F.2d at 1315, it stands to reason that a flawed consideration of Section 18(a)(2) factors hinders Interior's ability to obtain a proper balance of the factors under Section 18(a)(3). Interior's failure to properly consider the environmental sensitivity of different areas of the OCSareas beyond the Alaskan coastlinehas therefore also hindered Interior's ability to comply with Section 18(a)(3)'s balancing requirement. Consequently, on remand, the Secretary must first conduct a more complete comparative analysis of the environmental sensitivity of different areas of the outer Continental Shelf, 43 U.S.C. § 1344(a)(2)(G) (emphasis added), and must at least attempt to identify those areas whose environment and marine productivity are most and least sensitive to OCS activity. Watt I, 668 F.2d at 1313. Though Interior may ultimately conclude as a result of this additional analysis that the shorelines of the Beaufort, Bering, and Chukchi Seas are the areas that are most sensitive to OCS development, such a conclusion cannot be reached without considering the effects of development on areas of the OCS in addition to the shoreline. Once Interior has conducted its Section 18(a)(2)(G) analysis, Interior must then determine whether its reconsideration of the environmental sensitivity analysis warrants the exclusion of any proposed area in the Leasing Program. See Watt I, 668 F.2d at 1314. Finally, having reconsidered its Section 18(a)(2) analysis, Interior must reassess the timing and location of the Leasing Program so as to obtain a proper balance between the potential for environmental damage, the potential for the discovery of oil and gas, and the potential for adverse impact on the coastal zone, as required by Section 18(a)(3). 43 U.S.C. § 1344(a)(3).