Opinion ID: 890131
Heading Depth: 2
Heading Rank: 2

Heading: MBOGC’s compliance with MEPA’s requirements.

Text: ¶43 The purpose underscoring MEPA is to “declare a state policy that will encourage productive and enjoyable harmony between humans and their environment.” Section 75- 1-102(2), MCA. MEPA requires that an agency take a “hard look” at the environmental impacts of a given project or proposal. Ravalli County Fish & Game Assn., 273 Mont. at 377, 903 P.2d at 1367 (agencies have the obligation “to make an adequate compilation of relevant information, to analyze it reasonably,” and to consider all “pertinent data.”). However, “court review of an agency decision . . . is limited . . . [and the Court] does not take a hard look itself but requires that the agency does so. The Court focuses on the validity and appropriateness of the administrative decision making process without 25 intense scrutiny of the decision itself.” Clark Fork Coalition v. Mont. Dept. of Envtl. Quality, 2008 MT 407, ¶ 47, 347 Mont. 197, 197 P.3d 482. “The agency must examine the relevant data and articulate a satisfactory explanation for its action, including a rational connection between the facts found and the choice made.” Clark Fork Coalition, ¶ 47. Courts have held that “general statements about ‘possible’ effects and the existence of ‘some risk’ do not constitute a ‘hard look’ absent a justification regarding why more definitive information could not be provided.” Neighbors of Cuddy Mt. v. USFS, 137 F.3d 1372, 1380 (9th Cir. 1998) (quoting Inland Empire Pub. Lands Council v. U.S. Forest Serv., 88 F.3d 754, 764 (9th Cir. 1996). ¶44 The general requirements of the environmental review process under MEPA and the means in which an agency determines the necessary level of environmental review are contained in Admin. R. M. 36.2.523. A detailed environmental impact statement is required for a “major action of state government significantly affecting the quality of the human environment.” Admin. R. M. 36.2.523(1)(b). An environmental assessment operates, in part, as an initial evaluation to determine whether an agency must prepare an environmental impact statement. Admin. R. M. 36.2.522(9). An EA may be in checklist form when the agency determines a routine action with limited environmental impact is at stake. Admin. R. M. 36.2.525(2). ¶45 In determining the significance of the impacts associated with state action, and what type of assessment is necessary, the state agency must evaluate the individual and cumulative impacts. Admin. R. M. 36.2.524(1). An EA must include an evaluation of 26 cumulative and secondary impacts. Admin. R. M. 36.2.525(3)(d). We review whether the agency performed an evaluation of cumulative impacts in determining whether its compliance with MEPA was lawful. N. Fork Preservation Assn., 238 Mont. at 460, 778 P.2d at 868. An analysis of “cumulative impacts” means reviewing: the collective impacts on the human environment of the proposed action when considered in conjunction with other past and present actions related to the proposed action by location or generic type. Related future actions must also be considered when these actions are under concurrent consideration by any state agency through pre-impact statement studies, separate impact statement evaluation, or permit processing procedures. Admin. R. M. 36.2.522 (emphases added). ¶46 Federations argue that the twenty-three EAs at issue are virtually identical and contain no evaluation of the potential impacts to wildlife, in particular, sage grouse. They further argue the 1989 PEIS and 2003 FEIS both contemplate the need for further site specific analysis, which did not occur here. Federations point to the two EAs prepared by the DNRC as an example of an EA appropriately acknowledging the presence of and risk to sage grouse on the well sites at issue. They argue “the fact that MBOGC’s parent agency identified sage grouse leks within a mile of wells 2253 and 2256, and MBOGC failed to identify these same leks when it evaluated the same wells under the same MEPA standard demonstrates the patent inadequacy of MBOGC’s environmental review.” Federations argue the checklist utilized by MBOGC did not address cumulative effects because it ignored the other twenty-three wells being concurrently permitted in the same area, and that its overall assessment did not amount to a “hard look” at the impacts of the wells. 27 ¶47 In response, MBOGC emphasizes Sasaki’s affidavit, which observes that the EA checklist form requires consideration of the circumstances of each well and its cumulative effect, if any. Sasaki noted in the cumulative effects section of the EAs that the wells are being drilled in “an existing gas field.” He testified by affidavit that each EA was completed individually, and pointed out that the forms contain distinct responses where differences exist. Sasaki determined that because of the hundreds of existing wells in the immediate area and their associated infrastructure, the addition of these twenty-three wells would not create new human access to wildlife habitat. He pointed out that, in contrast to State-owned land, the MBOGC has no authority to impose surface restrictions upon wells drilled on private land. Sasaki also determined that the twenty-three wells would not lead to further cumulative impacts from oil and gas drilling in the CCA. ¶48 In both the EISs, the agency addressed cumulative impacts. The draft 1989 PEIS includes a six-paragraph discussion under the sub-heading “cumulative impacts.” The section identified the cumulative impacts of oil and gas drilling when coupled with other resource extraction, such as logging, mining, hydroelectric development, and livestock grazing. The final 1989 PEIS includes a summary of potential impacts to wildlife and fisheries, noting specifically that “[t]he likelihood of an adverse impact occurring in any particular location depends on the intensity of oil and gas activity, including length of time that operations occur, sensitivity of the environment, cumulative disturbance that a wildlife species has been subjected to previously, and implementation of mitigation 28 measures.” Moreover, the final 1989 PEIS concludes that the situation where “major adverse environmental effects are most likely is when a wildcat drilling operation leads to discovery of a commercially producible oil or gas reservoir and full-field production commences in a previously undeveloped area.” In the 2003 FEIS, the “Reasonably Foreseeable Development Scenario” analyzed the combined exploration and development of coal bed methane and of conventional oil and gas development in various counties. Additionally, cumulative impacts (including the impact of conventional oil and gas development) are also analyzed in Chapter 4’s discussion on wildlife. ¶49 We agree with Federations that the simple fact that these twenty-three wells are infill wells in an existing field does not automatically insulate them from a cumulative impacts analysis. We conclude, however, that the Board did not ignore cumulative impacts in its assessment of the wells authorized in this case. The agency completed the EAs here on the basis of an extensive administrative record and an institutional body of knowledge upon which MBOGC staff determined the additional wells at issue would have no significant impact, individually or cumulatively. As we noted earlier, the wells at issue are a minor fraction of the over a thousand wells in the Cedar Creek Gas Field. Infill development may prompt the need for further analysis if the characteristics of the location suggest the addition of new wells will increase “the collective impacts to the human environment.” However, on the record of this case—given the few number of well permits still in play, their minimal addition to an already significantly developed field, and the absence of indicators that sensitive habitat was involved, we hold that the 29 EAs’ silence regarding other specific well applications under consideration did not render them unlawful under Admin. R. M. 36.2.525 for failure to sufficiently assess cumulative impacts. ¶50 The Dissent makes an important point which, under a different set of facts, would be compelling. Even a checklist EA should provide sufficient environmental information for informed public scrutiny before decisions are made. Federations’ argument in this case, however, is that the MBOGC’s “decisions approving each of the 23 wells should be set aside” as arbitrary and capricious because its determination of no cumulative impacts was “made without making any analysis at all.” As Federations point out, we have recognized that the omission of a cumulative impacts analysis is relevant to determining whether an agency’s MEPA decision is “unlawful.” Friends of the Wild Swan v. DNRC, 301 Mont. 1, ¶ 29, 6 P.3d 972 (2000). In that case, however, as Federations acknowledge, the district court had enjoined the agency from moving forward pending completion of the cumulative impacts analysis, and we upheld that injunction on appeal. Here, since no stay was sought or obtained, we did not have an opportunity to rule before the agency’s decision took effect; thus, the question now is limited to a much smaller number of wells. Further, as discussed above, and not disputed by the Dissent, our examination of the sufficiency of the MBOGC’s “hard look” under the applicable statute is to be made on the entire record before the District Court. Section 82-11-144, MCA. On that record, and in light of the present posture of the case, we conclude that the agency’s evaluation of cumulative effects was adequate. Federations have not 30 demonstrated that adding the three to six remaining wells under consideration to the existing Cedar Creek Gas Field, particularly in light of DNRC restrictions on the two wells on State-owned land, would raise the potential for cumulative impacts sufficient to trigger additional environmental analysis. 1 Fidelity’s counsel acknowledged during oral argument that, had sage grouse been listed as a threatened or endangered species, significant additional analysis would have been required. We trust that MBOGC will consider the recent pronouncements by the U.S. Fish and Wildlife Service in its future permitting decisions. ¶51 We affirm the District Court’s conclusion that the MBOGC took a sufficient “hard look” under MEPA. Sasaki relied on the information in the 1989 PEIS and 2003 FEIS, his communications with FWP, his review of the Heritage Tracker database, and his analysis of topographic maps of the area. In his affidavit to the District Court, Sasaki rationally explained these steps, and the facts upon which he relied, to come to the conclusion that the additional wells would not lead to further cumulative impacts. He also relied on his own knowledge of the area, having previously prepared 325 EAs for the Cedar Creek Gas Field and conducted multiple site visits. The administrative record contains hundreds of pages of documentation of the Board’s analysis of gas well drilling in the area in question over many years. The compilation of data from the two major environmental studies in 1989 and 2003, along with other Board documentation and 1 Even under the Ninth Circuit’s relatively low standard of proof, a plaintiff alleging that an agency should have analyzed the cumulative impacts of a proposed project along with other projects must show “the potential for cumulative impact.” Te-Moak Tribe of Western Shoshone of Nev. v. U.S. DOI, 608 F.3d 592, 605 (9th Cir. 2010). 31 scientific literature, coupled with the institutionalized knowledge of MBOGC staff, provides an extensive information base upon which the Board could draw in concluding that the addition of twenty-three wells in a heavily-developed field would have limited impact. Our role is not to say whether the Court would have granted the permits in this instance. N. Fork Preservation Assn., 238 Mont. at 465, 778 P.2d at 871. Rather, we must determine if the MBOGC was sufficiently thorough and discerning in its decision-making process to meet applicable MEPA requirements. We conclude it was. ¶52 3. Whether the District Court erred in ruling that MBOGC did not have to prepare a programmatic environmental impact statement for oil and gas development in the Cedar Creek Anticline area. ¶53 A “programmatic review” is “an analysis (EIS or EA) of the impacts on the quality of the human environment of related actions, programs, or policies.” Admin. R. M. 36.2.522(15). As noted above, an EIS is required for “major actions of state government significantly affecting the quality of the human environment.” Section 75-1- 201(1)(b)(iv), MCA. An “action” is defined in part as “a project or activity involving the issuance of a lease, permit, license, certificate or other entitlement.” Admin. R. M. 36.2.522(1). An EIS is not required if an agency, after evaluating the factors in Admin. R. M. 36.2.524(1), determines that the adverse effects are not significant. Those factors are: (a) the severity, duration, geographic extent, and frequency of occurrence of the impact; (b) the probability that the impact will occur if the proposed action occurs; or conversely, reasonable assurance in keeping with the potential severity of an impact that the impact will not occur; 32 (c) growth-inducing or growth-inhibiting aspects of the impact, including the relationship or contribution of the impact to cumulative impacts; (d) the quantity and quality of each environmental resource or value that would be affected, including the uniqueness and fragility of those resources or values; (e) the importance to the state and to society of each environmental resource or value that would be affected; (f) any precedent that would be set as a result of an impact of the proposed action that would commit the department to future actions with significant impacts or a decision in principle about such future actions; and (g) potential conflict with local, state, or federal laws, requirements, or formal plans. Admin. R. M. 36.2.524. An EA is highly specific to the project and locale, “thus creating no binding precedent.” Barnes v. U.S. Dept. of Trans., 655 F.3d 1124, 1140 (9th Cir. 2011). ¶54 Environmental review under NEPA (and therefore MEPA) is not retroactive. Activity existing prior to enactment of the law and not potentially undergoing “further major [] action” does not require an EIS. Westside Property Owners v. Schlesinger, 597 F.2d 1214, 1223-24 (9th Cir. 1979). “If an ongoing project undergoes changes which themselves amount to ‘major [state] actions,’ the operating agency must prepare an EIS.” Ravalli County Fish & Game Assn., 273 Mont. at 378-79, 903 P.2d at 1367 (quoting Upper Snake R. Chapter of Trout Unlimited v. Hodel, 921 F.2d 232, 234 (9th Cir. 1990)). Where a proposed action would not change the status quo, the MEPA review process is not triggered. Ravalli County Fish & Game Assn., 273 Mont. at 378-79, 903 P.2d at 1367; Upper Snake R. Chapter of Trout Unlimited, 921 F.2d at 235. “An EIS need not discuss the environmental effects of continuing to use land in the manner in which it is presently being used.” Sabine R. Authority v. U.S. Dept. of Interior, 951 F.2d 669, 679 33 (5th Cir. 1992) (citing Upper Snake R. Chapter of Trout Unlimited, 921 F.2d at 235) (holding that an agency’s acquisition of an easement did not effectuate any change to the environment that would trigger an EIS). ¶55 If the changes are “substantial enough to constitute a ‘major federal [or state] action’” or have the potential to significantly affect the quality of the human environment, then MEPA—like NEPA—requires the agency to evaluate those changes for significant impacts. Compare Westside Property Owners, 597 F.2d at 1223 (post-NEPA agreement for military training exercises not a “major federal action” in light of longstanding approval of design for training program) with Ravalli County Fish & Game Assn., 273 Mont. at 379-80, 903 P.2d at 1368 (change in grazing permit from grazing cattle to grazing sheep adjacent to bighorn range did not constitute maintaining the status quo and further MEPA analysis was triggered). ¶56 In 2003, the MBOGC issued an order granting Fidelity’s application to increase well density in the CCA. Though it might have been an opportune time to do so, Federations did not seek a programmatic EIS when that order was issued. ¶57 Richmond explained in a letter to NWF in 2008, submitted by Federations as an exhibit to their motion for summary judgment, that the order authorizing increased well density was issued as a means to address inequities between adjoining landowners. He explained that its effect was both to serve as a determination that the well spacing did not constitute waste by promoting unnecessary wells and to promote conservation by maximizing the recovery of existing gas resources. Richmond advised that it was 34 unlikely the number of wells authorized by the Board Order “will be drilled immediately.” He noted that the average five-year net increase in producing gas wells for the Montana portion of the Williston Basin is seventy-one new wells per year. Through the affidavit of Bruce Bowman, Fidelity confirmed in the District Court that it anticipated drilling approximately 40-100 wells per year in 2009 and 2010. ¶58 At the time the permits were issued in this case, much of the infrastructure already was in place with only minor improvements needed. Fidelity employee Dennis Zander described in his affidavit to the court Fidelity’s attempt to minimize the impact of the gas wells at issue. Noting Gore’s concerns that eight of the wells could adversely impact sage grouse, Zander explained that “the infrastructure Fidelity will install with respect to these eight wells is minimal.” Zander provided specific comments about the limited impacts of the wells, including their virtually silent operation and Fidelity’s ability to access the wells’ electronic metering equipment remotely. Once a well is completed, there is little vehicular traffic associated with its operation, with most wells being accessed by vehicle less than once a week. He stated that this method of production operations has been commended by BLM biologists for minimizing noise that might impact sage grouse. ¶59 Despite the Board’s finding of no significant impacts, Federations contend that the MBOGC must perform a programmatic review of ongoing oil and gas development in the CCA, pointing to Fidelity’s anticipated drilling in the future. They further argue that the 1989 PEIS was not a programmatic review, but rather a “framework” for the agency’s 35 future performance of MEPA reviews and that further area-specific review was contemplated by the agency and is necessary. Appellees argue that the addition of twenty-three wells (now six or fewer), is not a “major state action” requiring a programmatic review and that speculation about future drilling does not provide a basis for mandating an EIS in this case. ¶60 We conclude that the Board was not arbitrary or capricious in its determination that drilling twenty-three wells in an existing field of over a thousand, with most of the necessary infrastructure already in place and minimal anticipated impacts, was not a major state action necessitating a programmatic EIS. Incremental infill well development on the field may necessitate an EIS if, at some point, such development meets the factors discussed in Admin. R. M. 36.2.524. Our holding here does not preclude the requirement for an EIS at a future date. Barnes, 655 F.3d at 1140. On this record, Federations have not met their burden of demonstrating that MBOGC’s decision was arbitrary, capricious, unlawful, or unwarranted by the facts.