Opinion ID: 159335
Heading Depth: 2
Heading Rank: 1

Heading: The IBLA Decision Was Supported by Substantial Evidence

Text: 46 The IBLA addressed the BLM's findings that: (1) inconsistencies between the Warnock and Hutchinson analyses showed Yates/Pogo's bad faith, (2) Mr. Hutchinson's declaration that the tenth zone was uneconomic rendered the Yates/Pogo bid an undue waste of potash resources, and (3) Yates/Pogo's development of oil and gas would create safety risks and cause an economic hardship on the potash industry. We are unpersuaded by IMC's argument that [b]y focusing on each factor separately, rather than viewing them as being interrelated, . . . the IBLA failed to fully consider the basis for BLM's decision to reject Appellants' bid. Appellee's Br. at 34. Whether we evaluate the factors separately or together, substantial evidence supports the IBLA's decision, as discussed below.
The IBLA stated: 47 In our view BLM's conclusion, based on the inconsistencies between the Warnock and Hutchinson submissions, that appellants submitted their bid in bad faith is unwarranted. We do not agree that the reports demonstrate appellants espouse contradictory positions on the economic viability of the potash deposit depending on whether they seek APD approval or potash lease acquisition. Even if the studies did conflict, neither the fact that a later, more comprehensive evaluation specifically designed to evaluate the economic potential of potash lease procurement reached a somewhat different result than an earlier study prepared for a different purpose nor appellants' continued reliance on the earlier Warnock study as support for the issues it was commissioned to address, demonstrates bad faith. Rather the two analyses conform to appellants' acknowledged goal of pursuing the profitable development of both oil and gas and potash. 48 Pogo, 138 I.B.L.A. at 156-57. The record contains substantial evidence to support the IBLA conclusion that the Hutchinson and Warnock reports do not evidence bad faith. The Warnock report calculated a threshold mining thickness necessary to economically mine potash in the lease area. It concluded that the current potash mining companies had more profitable ore reserves to mine for at least thirty years. The Warnock report did not make an evaluation or recommendation with respect to Yates/Pogo's ability to mine the potash. The Hutchinson report focused on the economic potential for Yates/Pogo to develop the potash lease and concluded that the fourth ore zone had economic potential for Yates/Pogo to develop a small mine. 49 The IBLA may draw reasonable inferences from the evidence. See Worley Mills, Inc. v. NLRB, 685 F.2d 362, 365 (10th Cir. 1982) (A federal agency's conclusions based upon such inferences are not to be overturned on review unless they lack a reasonable basis.); Adolph Coors Co. v. FTC, 497 F.2d 1178, 1184 (10th Cir. 1974) (If the inference is supported by substantial evidence, it cannot be set aside even though the court could draw a different inference.) (upholding FTC decision reversing administrative law judge). Thus, because it is supported by substantial evidence, we must accept the IBLA's determination that the Warnock and Hutchinson reports do not contradict nor evidence bad faith.
The IBLA continued: 50 We further reject the claim that awarding the potash lease to appellants would not be in the best interest of recovery of the potassium resources because it would result in the undue waste of potash and could pose an economic hardship on the potash industry. The fact that Hutchinson's analysis identifies as uneconomic some potash ore zones BLM considers commercial does not mean that those zones will be wasted should appellants be awarded the lease. 51 Pogo, 138 I.B.L.A. at 157. The record contains substantial evidence to support the IBLA's decision. The BLM conceded that: While the BLM maps designate a greater extent of mineable reserves than the Hutchinson study, BLM considers Mr. Hutchinson's study as reasonable. The BLM also realizes that economic analyses done before mining are subject to considerable change. Olsen Memo., Appellee's App. at 122. Regarding the fourth ore zone, the BLM stated: More core drilling would be necessary to justify a new mine or develop a detailed mining plan. Cranston Memo., Appellee's App. at 131. The evidence in the record supports the conclusion that Yates/Pogo were not seeking to deceive the BLM, but merely seeking to present the BLM with up-to-date data on the potash reserves of the area. Indeed, the additional data would provide the BLM with a better sense of the potash mining potential in the area. Thus, given all the evidence in the record, the IBLA did not err in deciding that a determination of undue waste of potash was premature at lease issuance.
52 The IBLA concluded that the BLM's remaining arguments regarding safety concerns (and economic effects of a safety lapse): 53 rely on speculation and assume that BLM will fail to fulfill its responsibilities to carefully scrutinize mining plans of operations submitted pursuant to 43 CFR 3592.1 before granting the approval necessary to allow mining to occur. We believe BLM's authority to approve or disapprove APD's and proposed potash mining plans will be adequate to regulate the parties' activities in the area. 54 Pogo, 138 I.B.L.A. at 157-58. After review of the BLM's decision, we agree with the IBLA that the BLM's conclusion that granting the lease to Yates/Pogo would pose an undue economic hardship on the potash industry relies on speculation about possible safety risks and conjecture about economic ramifications. The record supports IBLA's conclusion that BLM has substantial legal authority to regulate Yates/Pogo's actions under the oil and gas and potash leases to protect the safety of miners. 55 In sum, we hold that the IBLA's decision was supported by substantial evidence in the record. 56