Opinion ID: 1191743
Heading Depth: 4
Heading Rank: 3

Heading: The habitats standard

Text: NTC also contends that the CCD is invalid because it did not satisfy the habitats standard of the ACMP. The habitats standard provides that coastal area habitats must be managed so as to maintain or enhance the biological, physical, and chemical characteristics of the habitat which contribute to its capacity to support living resources. 6 AAC 80.130(b); see also 6 AAC 80.130(c) (1995). DNR may permit uses or activities which do not maintain and enhance the coastal habitat only if it finds (1) there is a significant public need for the proposed use or activity; (2) there is no feasible prudent alternative to meet the public need for the proposed use or activity which [would maintain and enhance the coastal habitat]; (3) all feasible and prudent steps to maximize conformance with [this section's standards] will be taken. 6 AAC 80.130(d) (1995). DNR found in its consistency analysis that if oil and gas deposits are discovered in the proposed sale area, there may be uses or activities in the sale area which will not `maintain or enhance the biological, physical, and chemical characteristics' of the coastal habitat in which they are located. Accordingly, DNR was required to perform the three-part analysis under 6 AAC 80.130(d). DNR found that each element necessary to satisfy the analysis was present. NTC charges that each of these findings was inappropriate and, therefore, that DNR violated the habitats standard. This court's review is limited to ensuring that DNR's decision was not arbitrary, capricious, or unreasonable. Camden Bay II, 851 P.2d at 1347.
DNR found that the first part of the test was satisfied, as there is a significant public need for the proposed oil and gas lease sale. DNR found that there was a public need for the revenue from the Sale, which would help offset projected revenue declines. DNR also found that proceeds from the Sale would provide much-needed local revenue, and that there was a significant public need for jobs that would be created by exploration and, if it occurs, development. In Trustees for Alaska v. State, Department of Natural Resources, 795 P.2d 805 (Alaska 1990) ( Camden Bay I ), we discussed the benefits to the State of oil and gas lease development in the context of a BIF for an oil and gas lease sale. In that BIF, DNR discussed the State's dependence on petroleum-related income, and the long-range goal of the State of utilizing the oil and gas lease program to provide the basis for a stable and prosperous economy. Id. at 810. It found that the State would benefit from the bonus payments received from oil companies for the privilege of leasing whether or not actual deposits are discovered, and that if actual development does occur, it will make it more economically feasible for other companies in the area to develop existing oil deposits. Id. Consequently, we held that DNR's decision that the sale was in the best interests of the State was not arbitrary or capricious. Id. at 809-10. In accordance with the holding in Camden Bay I, we conclude that DNR properly determined that there is a significant public need for oil and gas lease Sale 78. The first element of the 6 AAC 80.130(d) analysis is therefore satisfied.
DNR also found that the second element of the 6 AAC 80.130(d) analysis was satisfied, because there is no feasible and prudent alternative available to meet the public need for the proposed oil and gas lease sale. [12] The State maintains that while it might be feasible to offer less promising areas for lease, it would not be prudent because potential lessees have expressed an interest in the Sale 78 area. NTC argues that DNR failed to demonstrate that there is no feasible and prudent alternative to Sale 78. In Camden Bay I, DNR based its finding that the sale was in the State's best interest in part on the fact that if development occurred it would make development of existing oil deposits near the sale area economically feasible. 795 P.2d at 810. In Camden Bay II, DNR found that industry interest in the area was significant, and concluded that it would not be prudent to lease areas of lesser potential. Accordingly, we found that DNR had articulated sufficient support for its finding that no feasible and prudent alternative existed for the proposed sale. 851 P.2d at 1348. In this case, DNR also considered economic factors in determining the existence of a feasible and prudent alternative, including the prudence of offering the area selected for development as opposed to another area. DNR found that [t]he only feasible alternative to offering lands in the coastal zone is to offer lands outside of the coastal zone. Given the public need for oil and gas revenues, however, this is not a prudent alternative in Alaska because most of the prospective acreage and facilities infrastructure lies in coastal areas. Because DNR had a reasonable basis for finding that there was no feasible and prudent alternative available, we hold that DNR satisfied the second part of the tripartite test.
Finally, DNR found that the third element of the tripartite analysis was met as it had taken all feasible and prudent steps to maximize conformance of the sale with 6 AAC 80.103(b) and (c) at the lease sale stage. DNR based this finding on its determination that the mitigation measures prescribed in the lease provide adequate support for the habitats standard. NTC charges that DNR improperly found that all feasible and prudent steps to maximize conformance with the habitats standard had been required. In Camden Bay II DNR identified twenty lease stipulations expressly designed to achieve maximum compliance with the goals of maintaining and enhancing the coastal habitat. Camden Bay II, 851 P.2d at 1347. DNR found that the lease terms and stipulations complied with ACMP standards and minimized the sale's impact on the environment. Id. at 1348. The court held that this analysis was sufficient to support DNR's finding of compliance with the habitats standard. Id. In this case, DNR found that [t]he proposed permitting terms and lease stipulations represent all feasible and prudent steps necessary to maximize conformance of the sale with 6 AAC 80.130(b) and (c) at the lease sale stage. Additional measures may be identified and imposed when specific development activities are reviewed for consistency with the ACMP through the permitting process. In accordance with this finding DNR proposed more than twenty terms and stipulations to minimize the Sale's impact on the environment. [13] For example, Term 2 requires the use of vehicles which do not damage the vegetation or ground surface [during exploration]. The term restricts road construction during exploration by requiring the use of existing road systems, port facilities, or air services whenever feasible. Also, Term 9 regulates the siting and construction of pipelines to prevent obstruction to marine navigation and fishing operations, and to provide protection from climatic conditions, tides, currents, and geophysical hazards. It is clear from the detailed and particular nature of these stipulations that DNR took a hard look at the feasible and prudent steps necessary to minimize the impact of the Sale on the habitat. Therefore, we hold that DNR's analysis demonstrates a reasonable basis for its finding that all feasible and prudent steps to maximize conformance with the habitats standard have been taken.