Court Opinion

ID: 2653416
Source: CourtListenerOpinion
Date Created: 2014-02-15 01:01:50.500998+00
Date Added: 2024-06-11T09:09:49.003038
License: Public Domain

Notice: This opinion is subject to correction before publication in the P ACIFIC R EPORTER .
     Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
     303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
     corrections@appellate.courts.state.ak.us.

              THE SUPREME COURT OF THE STATE OF ALASKA

DENALI CITIZENS COUNCIL,      )
                              )                        Supreme Court No. S-14896
               Appellant,     )
                              )                        Superior Court No. 3AN-10-12552 CI
    v.                        )
                              )                        OPINION
STATE OF ALASKA,              )
DEPARTMENT OF NATURAL         )
RESOURCES, and USIBELLI COA L )
MINE, INC.,                   )
                              )                        No. 6865 – February 14, 2014
               Appellees.     )
                              )

             Appeal from the Superior Court of the State of Alaska, Third
             Judicial District, Anchorage, Andrew Guidi, Judge.

             Appearances: Peter Van Tuyn and Karen E. Schmidt,
             Bessenyey & Van Tuyn, L.L.C., Anchorage, for Appellant.
             Rebecca Kruse, Assistant Attorney General, Anchorage, and
             Michael C. Geraghty, Attorney General, Juneau, for Appellee
             Department of Natural Resources. David J. Mayberry and
             Kyle W. Parker, Crowell & Moring L.L.P., Anchorage, for
             Appellee Usibelli Coal Mine, Inc.

             Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and
             Bolger, Justices.

             BOLGER, Justice.
I.     INTRODUCTION
              This is an administrative appeal from a decision by the Department of
Natural Resources (DNR) to grant Usibelli Coal Mine (Usibelli) a gas exploration license
in the Healy Basin (the Healy license). Denali Citizens Council (Denali Citizens), a
community-based public interest group located in the Denali Borough, challenges DNR’s
finding that issuing the license is in the best interests of the state on two grounds: first,
that DNR failed to take a “hard look” at the economic feasibility of excluding certain
residential areas and wildlife habitat from the license; and second, that DNR’s treatment
of environmental mitigation measures in the best interest finding was arbitrary and
capricious.
              We affirm the superior court’s order upholding DNR’s decision to issue the
gas exploration license to Usibelli because we conclude that DNR did not act arbitrarily
in developing and publishing its best interest finding.
II.    FACTS AND PROCEEDINGS
       A.     Statutory Background
              Alaska Statute 38.05.132 authorizes the Commissioner of the Department
of Natural Resources (the commissioner) to issue “exploration licenses” to individuals
or corporations seeking to discover oil or gas on state land.1 Such a license gives the
holder the exclusive right to explore the land described in the license for oil or gas
deposits for up to ten years,2 as well as an option to convert the exploration license into
a lease if the licensee satisfies certain requirements.3

       1
              AS 38.05.132(a).
       2
              AS 38.05.132(b)(1).
       3
              AS 38.05.132(b)(2).

                                            -2­                                        6865
              In considering a proposal for an exploration license, the Director of the
Division of Oil and Gas (the director) is required to make a written finding that issuing
the exploration license will be in the best interests of the state (a best interest finding or
BIF).4 Prior to publishing a final best interest finding (final finding or final BIF) and
approving a license proposal, the director must make a preliminary best interest finding
(preliminary finding or preliminary BIF) available to the public and provide an
opportunity for public comment.5 The final written finding, issued after the close of the
comment period, must contain a summary of public comments received by DNR and the
director’s responses to those comments.6
              The written finding must set out “the basis for the director’s preliminary or
final finding . . . that, on balance, leasing the area would be in the state’s best interest.”7
At a minimum, the director must “consider and discuss” two categories of “facts”: first,
facts that are “material to issues that were raised during” the public comment period and
“within the scope” of the finding, as determined by the director; and, second, facts
material to ten specified matters, including “the reasonably foreseeable fiscal effects of

       4
             AS 38.05.133(f). Although the statute assigns this responsibility to the
commissioner, the commissioner delegated this duty to the director with respect to the
Healy license.
       5
              AS 38.05.035(e)(5).
       6
              AS 38.05.035(e)(7).
       7
               AS 38.05.035(g)(2). The legislature has determined that it is “in the best
interests of the state . . . to encourage an assessment of its oil and gas resources” so as to
“minimize the adverse impact of exploration, development, production, and
transportation activity”; and “to offer acreage for oil and gas leases or for gas only
leases.” AS 38.05.180(a)(2).

                                              3                                          6865

the lease sale and the subsequent activity” and “lease stipulations and mitigation
measures.”8
              Any person who participated in the public comment process by submitting
a written comment and who is “aggrieved” by the final BIF may file a request for

      8	
              AS 38.05.035(g)(1). The director must also consider and discuss
              (i)	    property descriptions and locations;
              (ii)	   the petroleum potential of the sale area, in general terms;
              (iii)	 fish and wildlife species and their habitats in the area;
              (iv)	   the current and projected uses in the area, including
                      uses and value of fish and wildlife;
              (v)	    the governmental powers to regulate the exploration,
                      development, production, and transportation of oil and
                      gas or of gas only;
              (vi)	   the reasonably foreseeable cumulative effects of exploration,
                      development, production, and transportation for oil and gas
                      or for gas only on the sale area, including effects on
                      subsistence uses, fish and wildlife habitat and populations
                      and their uses, and historic and cultural resources;
                      ....
              (viii)	 the method or methods most likely to be used to transport oil
                      or gas from the lease sale area, and the advantages,
                      disadvantages, and relative risks of each; [and]
                      ....
              (x)	    the reasonably foreseeable effects of exploration,
                      development, production, and transportation involving oil
                      and gas or gas only on municipalities and communities within
                      or adjacent to the lease sale area . . . .

      AS 38.05.035(g)(1)(B).

                                             4	                                       6865
reconsideration of the finding with the commissioner.9         An adverse decision on
reconsideration may then be appealed to the superior court.10 Points on appeal in the
superior court are limited to those presented to the commissioner in the request for
reconsideration.11 The party seeking judicial review of a best interest finding has the
burden of proving that the finding is invalid.12
       B.     Facts
              Usibelli submitted a gas-only exploration license proposal to DNR in April
2004. The proposal covered 208,630 acres in the Healy area, including land west of the
Nenana River and adjacent to Denali National Park.
              In November 2004, DNR provided notice of its intent to evaluate the
proposal and sought public comment in January 2005. Denali Citizens, a “non-profit
citizens group . . . with a mission of supporting sound planning and sustainable
development in the Denali Borough,” responded. It noted that the license included
residential areas and the wildlife-rich Wolf Townships13 area west of the Nenana River,
and asked DNR to consider excluding some of these areas from the license. Denali
Citizens also requested that DNR address noise mitigation and facility siting in its best
interest finding.
              In August 2005, DNR issued a “Preliminary Best Interest Finding”
concluding that issuing the Healy license would be in the best interests of the state. The

       9
              AS 38.05.035(i). 

       10
              AS 38.05.035(l). 

       11
              Id.

       12
              AS 38.05.035(m).

       13
             The “Wolf Townships” are located near the northeast corner of Denali

National Park and are surrounded by park lands. The Denali Caribou Herd uses the Wolf
Townships as an overwintering ground.
                                           5                                     6865
preliminary finding addressed the reasonably foreseeable effects of the proposed license,
including statewide and local fiscal effects and cumulative effects on the area’s fish and
wildlife.14 It also described proposed measures “to mitigate the potential adverse social
and environmental effects of specific license related activities.” These mitigation
measures included specific standards addressing noise, such as a noise monitoring plan
requirement and maximum ambient noise limits, as well as restrictions on the siting of
exploration equipment, such as a minimum setback requirement. Usibelli would also be
required to obtain the consent of every landowner in a residential subdivision before
constructing drill pads or compressor stations on any plot within that subdivision.
             However, the director would have discretion to grant exceptions to these
mitigation measures
             upon a showing by the licensee that compliance with the
             mitigation measures is not feasible or prudent, or that the
             licensee will undertake an equal or better alternative to satisfy
             the intent of the mitigation measure.
The preliminary finding defines “[f]easible and prudent” as “consistent with sound
engineering practice and not causing environmental, social, or economic costs that
outweigh the public benefit to be derived from compliance with the standard.”
             Upon issuing the preliminary finding, DNR provided public notice, sought
public comment, and conducted two public meetings during the comment period. Denali
Citizens submitted comments in response to the preliminary finding, asserting that the
finding failed to address its concerns about the scope of the proposed license area and
that the proposed mitigation measures were inadequate. It again requested that DNR
exclude sensitive areas west of the Nenana River from the license.

      14
             See AS 38.05.035(g)(1)(B) (listing matters that must be addressed in a
preliminary finding).
                                        6                                     6865
              In June 2010, DNR issued a final best interest finding, concluding that it
was in the state’s best interests to issue the exploration license. The final finding did not
remove any acreage from the license proposal. In response to Denali Citizens’ request
that areas west of the Nenana River be excluded from the license, DNR wrote:
              Removing the area west of the Nenana River from the license
              area may make the project economically unfeasible. The
              imposition of mitigation measures to avoid, minimize, or
              mitigate potential impacts is preferable to removing a large
              acreage from the license area. As specific projects are
              proposed, additional mitigation measures may be imposed.
              Given these measures, license advisories, and existing laws
              and regulations, removing the area west of the Nenana River
              from the license area is unnecessary.
With respect to specific concerns regarding the Wolf Townships, DNR noted that the
Wolf Townships are not part of Denali National Park and that mitigation measures would
provide adequate protection for wildlife in the area.
              The final finding also modified several mitigation measures.             DNR
substantially revised the noise standards, removing the noise monitoring plan
requirement and the maximum ambient noise limits prescribed in the preliminary finding.
The final BIF provided that “[m]easures to be used to mitigate potential noise impacts
associated with facilities and compressor stations will be considered on a site-specific
basis.” DNR also eliminated the requirement that Usibelli obtain consent from all
surface property owners within a residential subdivision before constructing any drill
pads or compressor stations in the subdivision. The setback requirements remained
largely the same.15 Finally, DNR modified the blanket exception to mitigation measures:

       15
               The preliminary finding required setbacks from residential structures of at
least 500 feet for drill pads and at least 1,500 feet for compressor stations. The final
finding expanded the application of these setback requirements to “community or
institutional building[s].”
                                             7                                      6865
the final finding allowed for exceptions to mitigation measures “upon a showing by the
licensee that compliance with the mitigation measure is not practicable.” The final BIF
defines “[p]racticable” as “feasible in light of overall project purposes after considering
cost, existing technology, and logistics of compliance with the mitigation measures.”
              Denali Citizens filed a request for reconsideration of the final BIF with the
commissioner. The commissioner granted the request and affirmed. With respect to
Denali Citizens’ objection to the decision not to exclude the area west of the Nenana
River from the license, the commissioner determined that mitigation measures adequately
addressed concerns about facility siting, the protection of wildlife and habitat, and
conflicts with recreational activities. The commissioner also noted, in response to Denali
Citizens’ observation that the Wolf Townships had been classified as widlife habitat and
public recreation land in the Tanana Basin Area Plan (the Plan),16 that the Plan allows
oil and gas leasing throughout the license area.
              With respect to Denali Citizens’ claim that mitigation measures had been
weakened or eliminated in the final finding, the commissioner wrote that
              The intent of changes to the mitigation measures concerning
              noise and buffers around residential areas was not to weaken
              protections, but to ensure flexibility while not unnecessarily
              restricting the licensee’s activities. Specifically disallowing
              drill pads and compressor stations in subdivisions and
              stipulating specific noise thresholds may be unnecessarily
              restrictive, especially when lots are unoccupied or

       16
              The Tanana Area Basin Plan, adopted pursuant to AS 38.04.065,
“determines major land uses on state lands within the planning area, describes
management intent, and sets management guidelines for various resources” in the Tanana
Basin Planning Area. See Tanana Basin Area Plan, 1-5, available at
http://dnr.alaska.gov/mlw/planning/areaplans/tanana/pdf/ch_1.pdf. The town of Healy
and other lands covered by the proposed exploration license are included in the Planning
Area. See id. at 1-3 to 1-4. The Wolf Townships are included in Subunit 4E1, the
Stampede Trail Management Unit.
                                          8                                         6865
              undeveloped, perhaps for long periods of time. Requiring the
              consent of all property owners in a subdivision could result
              in drill pads and compressor stations not being allowed in
              subdivisions at all.
The commissioner also asserted that the mitigation measures in the final finding were
“stronger, more protective, and more detailed than mitigation measures for most other
[state gas leases or licenses].”
              Denali Citizens appealed DNR’s decision to the superior court, and the
court affirmed. The court concluded that DNR had a reasonable basis to grant Usibelli
the exploration license without reducing its size because: (1) the license area was within
the parameters established by statute;17 (2) the license area was consistent with the
exploration licensing statute’s purpose, that is, to encourage exploration in areas with
low or unknown potential; and (3) given this purpose, it was reasonable for DNR to
conclude that a larger license area subject to mitigation measures was more consistent
with the state’s best interests than a smaller license area.18 With respect to mitigation
measures, the court held that it was premature to consider the adequacy of the measures
imposed in the final finding. Alternatively, the court concluded that the proposed
mitigation measures were not arbitrary. This appeal followed.

       17
            AS 38.05.132(c)(2) (providing that exploration license area must be
between 10,000 and 500,000 acres and “must be reasonably compact and contiguous”).
       18
             See AS 38.05.180(a)(2) (It is “in the best interests of the state . . . to
encourage an assessment of its oil and gas resources” so as to “minimize the adverse
impact of exploration, development, production, and transportation activity”; and “to
offer acreage for oil and gas leases or for gas only leases.”).
                                             9                                   6865
III.   STANDARD OF REVIEW 

                In an administrative appeal, we “independently review the merits of the
underlying administrative decision.”19 When an agency decision, such as a best interests
finding, involves “administrative expertise as to either complex subject matter or
fundamental policy formulations,” the reviewing court need only determine whether the
decision had a “reasonable basis.”20 Under this standard, the BIF will survive judicial
review so long as it is not “arbitrary, capricious, or unreasonable.”21 Although this is a
deferential standard, the reviewing court must “ensure that DNR has taken a hard look
at the salient problems and has genuinely engaged in reasoned decision making,”22 and
that the best interest finding includes a discussion of all the important factors DNR
considered.23

       19
            State, Dep’t of Health & Soc. Servs. v. N. Star Hosp., 280 P.3d 575, 579
(Alaska 2012) (internal citation and quotation marks omitted).
       20
            Hammond v. N. Slope Borough, 645 P.2d 750, 758 (Alaska 1982); see also
Kachemak Bay Conservation Soc’y. v. State, Dep’t of Natural Res., 6 P.3d 270, 275-76
(Alaska 2000) (Kachemak Bay).
       21
                Ninilchik Traditional Council v. Noah, 928 P.2d 1206, 1213 (Alaska 1996).
       22
                Kachemak Bay, 6 P.3d at 275 (internal quotation marks omitted).
       23
           Trs. for Alaska v. State, Dep’t of Natural Res., 795 P.2d 805, 811 (Alaska
1990) (Camden Bay I).
                                         10                                     6865
IV.    DISCUSSION

                 Denali Citizens challenges the Healy BIF on two grounds.24 First, it argues
that DNR inadequately addressed the economic feasibility of reducing the size of the
Healy license. Second, it argues that DNR’s treatment of mitigation measures in the final
BIF was arbitrary and capricious.
       A.	       DNR Was Not Required To Consider The Economic Feasibility Of
                 Removing The Area West Of The Nenana River From The Healy
                 License.
                 Denali Citizens first argues that the BIF inadequately addressed the
economic feasibility of reducing the size of the license. Despite concluding that it must
consider the economic feasibility of Usibelli’s license proposal in the best interest
finding, DNR merely asserted, without analysis, that reducing the size of the license
might “make the project economically unfeasible.”              Therefore, Denali Citizens
concludes, the agency failed to take a “hard look” at what it itself acknowledged is a
salient issue.
                 As the commissioner wrote in his response to Denali Citizens’ request for
reconsideration, the economic feasibility of a license proposal is relevant to one of the
factors DNR is required to discuss under AS 38.05.035(g), “the reasonably foreseeable
fiscal effects of the [license sale] and the subsequent activity on the state and affected
municipalities and communities.” Many of the economic consequences of granting a
license will not obtain if the project is not feasible and does not occur. Therefore, the
director is required to consider the economic feasibility of the license proposal in order
to predict accurately the “reasonably foreseeable fiscal effects” of the license sale.

       24
               Denali Citizens’ Statement of Points on Appeal alludes to a third argument
based on Article VIII of the Alaska Constitution, but it does not develop this argument
in its brief. This constitutional claim is, accordingly, waived. Great Divide Ins. Co. v.
Carpenter ex rel. Reed, 79 P.3d 599, 608 n.10 (Alaska 2003) (“Points that are
inadequately briefed are considered waived.”).
                                             11	                                     6865
              But Denali Citizens does not fault DNR for its discussion of the economic
feasibility of the license as proposed. Rather, Denali Citizens argues that DNR’s BIF is
arbitrary and capricious because it fails to give adequate treatment to the economic
feasibility of the Healy project if the area west of the Nenana River were excluded from
the license. But there is no basis for Denali Citizens’ assertion that the director is
required to address this separate issue. Consideration of the economic feasibility of the
license as proposed simply does not require consideration of the feasibility of
alternatives to the proposal. Nor do the “foreseeable fiscal effects” of the Healy license
as proposed depend on the economic feasibility of reducing the size of the license.
Therefore, Denali Citizens’ assertion that DNR did not “actually analyze whether
limiting the license area applied for by Usibelli actually would make the project
infeasible,” even if accurate, is irrelevant.
       B.     DNR’s Treatment Of Mitigation Measures Was Not Arbitrary.
              Denali Citizens advances two distinct arguments challenging DNR’s
treatment of mitigation measures: first, that DNR did not adequately explain its decision
to relax mitigation measures in its final finding; and second, that the mitigation measures
imposed in the final finding are inconsistent with the Tanana Basin Area Plan.
              1.	    Denali Citizens’ challenge to DNR’s treatment of mitigation
                     measures is ripe.
              The superior court concluded that Denali Citizens’ challenge to the BIF’s
treatment of mitigation measures was not ripe. The court cited our opinion in Trustees
for Alaska v. State, Department of Natural Resources (Camden Bay II)25 for the
proposition that a challenge to mitigation measures is not ripe at the BIF stage, since
DNR cannot be expected to evaluate the efficacy of “mitigation measures even before

       25
              851 P.2d 1340, 1346-47 (Alaska 1993).
                                        12                                           6865
knowing which activities it needs to mitigate.”26
              In Camden Bay II, we rejected the argument that a “detailed” assessment
of mitigation measures was necessary for DNR to make a finding, at the leasing stage,
that issuing a lease would be consistent with the Alaska Coastal Management Plan
(ACMP).27 But this court did not hold that DNR had no obligation to consider potential
mitigation measures in making that finding. On the contrary, the Camden Bay II court
relied in part on the fact that “DNR’s mitigation measures provide sensible guidelines
to minimize the harmful effects of oil and gas development” in holding that DNR’s
consistency determination was reasonable.28 In other words, while DNR is not required
to provide a detailed analysis of mitigation measures in a best interest finding, it may be
arbitrary and capricious to conclude that issuing a lease or license is in the best interests
of the state if the director has not identified adequate measures to reduce impacts on
conflicting uses.29
              Moreover, Denali Citizens is challenging the process by which DNR

       26
                 Id. at 1347; see also AS 38.05.035(h) (“In preparing a written finding
. . . , the director may not be required to speculate about possible future effects subject
to future permitting that cannot reasonably be determined until the project or proposed
use for which a written best interest finding is required is more specifically defined
. . . .”).
       27
              851 P.2d at 1347.
       28
              Id.
       29
               See Ninilchik Traditional Council v. Noah, 928 P.2d 1206, 1212 (Alaska
1996) (finding that DNR’s determination that a project is consistent with the ACMP was
reasonable where DNR “prescribed general mitigation measures at the lease sale stage
to ensure that these activities do not interfere with other water-dependent and water-
related uses . . . .”); see also AS 38.05.035(g)(1)(B) (DNR must discuss “lease
stipulations and mitigation measures” in a BIF); AS 38.05.180(a)(2)(A)(ii) (It is in the
best interests of the state to “minimize the adverse impact of exploration, development,
production, and transportation activity.”).
                                             13                                    6865
determined that the mitigation measures proposed in the final BIF are in the best interests
of the state rather than the adequacy of the mitigation measures themselves. In addition
to reaching reasonable conclusions, DNR must engage in a reasonable decision-making
process while preparing a best interest finding.30 Even if it were true that a challenge to
the substantive adequacy of DNR’s proposed mitigation measures is premature, Denali
Citizens’ challenge to DNR’s decision-making process is certainly ripe at this stage.31
              In conclusion, it was error to conclude that Denali Citizens’ challenge to
DNR’s proposed mitigation measures was not ripe. But because the superior court held,
in the alternative, that DNR’s treatment of mitigation measures was not arbitrary, we will
address the merits of Denali Citizens’ argument as well.
              2.	    DNR adequately explained its decision to change mitigation
                     measures in the final best interest finding.
              Denali Citizens first challenges DNR’s treatment of mitigation measures
on the grounds that DNR failed adequately to explain its decision to adopt more relaxed
mitigation measures in its final BIF.
              It is well-established in administrative law that when an agency departs
from a prior policy, it must give “a reasoned explanation . . . for disregarding facts and
circumstances that underlay or were engendered by the prior policy.”32 Although the
agency “need not demonstrate to a court’s satisfaction that the reasons for the new policy

       30
             Under Alaska law, agencies must give “reasoned discretion to all the
material facts and issues,” Camden Bay I, 795 P.2d 805, 811 (Alaska 1990), and
“engage[] in reasoned decision making.” Kachemak Bay, 6 P.3d 270, 275 (Alaska
2000). These requirements speak more to the reasonableness of the agency’s decision-
making process than to the reasonableness of its final decision.
       31	
              Cf. Kachemak Bay, 6 P.3d at 275-76.
      32
            FCC v. Fox Television Stations, Inc., 556 U.S. 502, 516 (2009); see also
Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,
41 (1983).
                                           14	                                    6865
are better than the reasons for the old one,” it must “display awareness that it is changing
position” and “may not . . . depart from a prior policy sub silentio.”33 Importantly, “the
law does not require the explanation to be exhaustive.”34
              The final BIF excluded several mitigation measures that were included in
the preliminary BIF. In particular, it eliminated a requirement that Usibelli obtain the
consent of all the surface property owners in a residential subdivision before constructing
facilities within that subdivision and replaced specific noise restrictions with a
commitment to consider such restrictions “on a site-specific basis.”
              On reconsideration, the commissioner explained that
              The intent of changes to the mitigation measures concerning
              noise and buffers around residential areas was not to weaken
              protections, but to ensure flexibility while not unnecessarily
              restricting the licensee’s activities. Specifically disallowing
              drill pads and compressor stations in subdivisions and
              stipulating specific noise thresholds may be unnecessarily
              restrictive, especially when lots are unoccupied and
              undeveloped, perhaps for long periods of time. Requiring the
              consent of all property owners in a subdivision could result
              in drill pads and compressor stations not being allowed in
              subdivisions at all.
              Denali Citizens alleges that this explanation “is unsupported by any
analysis” and lacks a basis in the record.        However, reasonable basis review is
deferential, and DNR’s explanation for its change of course need not be exhaustive.35
To ask for an in-depth treatment of every conceivable sub-issue, as Denali Citizens

         33
              Fox, 556 U.S. at 515; see also Arkema, Inc. v. EPA, 618 F.3d 1, 6 (D.C. Cir.
2010).
         34
              Modesto Irrigation Dist. v. Gutierrez, 619 F.3d 1024, 1035 (9th Cir. 2010).
         35
             See Kachemak Bay, 6 P.3d at 292-93 (Although “DNR’s analyses are not
exhaustive,” they are sufficient to show that DNR considered the relevant issues.); see
also Modesto Irrigation Dist., 619 F.3d at 1035.
                                           15                                    6865
suggests, would be to require something much more than simply “reasoned decision
making.” Therefore, we conclude that the commissioner’s explanation for DNR’s
decision to eliminate the specific noise and subdivision mitigation measures was
adequate.
              The final BIF also adopted a different standard for granting exceptions to
mitigation measures, providing that exceptions “will only be granted upon a showing by
the licensee that compliance with the mitigation measure is not practicable” rather than
upon a showing that compliance is “not feasible or prudent.”36 Denali Citizens argues
that the former standard is significantly more permissive than the latter and that DNR did
not adequately explain this change.
              There is substantial support for Denali Citizens’ assertion that the “not
feasible or prudent” standard is different from the “not practicable standard.” First, DNR
defines the two terms differently. “Feasible and prudent” is defined as “consistent with
sound engineering practice and not causing environmental, social, or economic costs that
outweigh the public benefit to be derived from compliance with the standard.”
“Practicable,” by contrast, is defined as “feasible in light of overall project purposes after
considering cost, existing technology, and logistics of compliance with the mitigation
measures.” The former standard appears to require the licensee to show that the public
benefits of implementing the mitigation measure outweigh the public (“environmental,
social, or economic”) costs, while the latter standard only appears to require the licensee
to demonstrate that the private costs of the measure to the licensee are too high.

       36
              Denali Citizens did not ask the commissioner to reconsider this blanket
exception in its request for reconsideration of the final BIF. But the State has not
asserted that this omission restricts our consideration of this issue. See generally AS
38.05.035(l).
                                            16                                     6865
              Second, Usibelli submitted a comment on the preliminary BIF asserting that
the standards for exceptions for certain mitigation measures did not permit DNR to take
into account economic considerations. In response, DNR wrote that
              [e]xceptions may be granted if it is not practicable to comply
              with the standard. The final finding uses the term practicable
              instead of “feasible or prudent.” Practicable means feasible in
              light of overall project purposes after considering cost,
              existing technology, and logistics of compliance with the
              mitigation measure.
It is difficult to understand how this explanation is responsive to Usibelli’s comment if
the new standard does not permit greater consideration of its costs.
              However, both Usibelli and DNR maintained at oral argument that the
revision to the blanket exception was merely cosmetic and that the new standard is no
less stringent than the old. We are satisfied that as long as the “not practicable” standard
is applied so as to be no more permissive than the “not feasible or prudent” standard,37
there will have been no substantive change to the blanket exception and, therefore, no
requirement that DNR provide a reasonable explanation. In view of DNR’s commitment
to apply these standards identically, we need not address whether DNR provided an
adequate explanation for the change in the wording of the blanket exception.
       C.	    The Best Interest Finding Is Consistent With The Tanana Basin Area
              Plan.
              Denali Citizens also claims that the BIF is arbitrary and capricious because
it is inconsistent with the Tanana Basin Area Plan. Denali Citizens maintains that
because the Stampede Trail Management Unit — which overlaps with the section of the
license adjacent to Denali National Park — is primarily classified as public recreation

       37
              For example, if the “not feasible or prudent” standard only permits DNR
to weigh the public costs of implementing a mitigation measure, DNR may not rely on
language in its definition of “practicable” to justify the consideration of costs to Usibelli.
                                             17	                                        6865
and wildlife habitat land, oil and gas development as a “secondary use” may be permitted
in Stampede Trail only “when its occurrence will not adversely affect achieving the
objectives for the primary uses.”38 The Plan also provides that “[i]mpacts on caribou
from [oil and gas] exploration and development will be avoided or mitigated, especially
during the calving season” and that “[s]pecific measures [to mitigate impacts] will be
determined in the leasing process.” Denali Citizens argues that DNR’s failure both to
protect the “primary” uses of Stampede Trail through adequate mitigation measures and
to identify “[s]pecific measures” to protect caribou rendered its best interest finding
arbitrary.
             We note initially that neither the Alaska Statutes nor DNR regulations
indicate that a regional land use plan is legally binding on the Department.39 To the
contrary, in a case holding that a land use plan is not a regulation, we expressed doubt
that the provisions of such a plan are enforceable against DNR.40
             However, even if the Plan is legally binding, the best interest finding is
fully consistent with its provisions. First, contrary to Denali Citizens’ representations,
the Plan does not classify oil and gas development as a disfavored “secondary use”
within Stampede Trail. Rather, the Plan emphasizes that state land in Stampede Trail is

       38
              T A N A N A B A S IN A R E A P LA N 1-5 (1990),            available     at
http://dnr.alaska.gov/mlw/planning/areaplans/tanana/pdf/ch_1.pdf.
       39
             See AS 38.04.065, 11 Alaska Administrative Code 55.010-.280 (2005).
       40
              See State, Dep’t of Natural Res. v. Nondalton Tribal Council, 268 P.3d 293,
304 n.93 (Alaska 2012) (“[A]lthough it guides future DNR policy, the [Bristol Bay Area
Plan] is likely not enforceable by the public against DNR either.” (citing Norton v. S.
Utah Wilderness Alliance, 542 U.S. 55, 67-72 (2004))).
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“open to mineral entry.”41 Therefore, oil and gas development is generally permitted
within the Stampede Trail Management Unit.
              Second, although the Plan does call for the identification of “[s]pecific
measures” to protect the local caribou herd, such measures are to be identified in the
“leasing process,” not the licensing process.42 Although Denali Citizens maintains that
licensing and leasing are identical for purposes of the Plan, the statute creating the
exploration license program makes clear that they are not.43 Therefore, DNR is not
required to identify specific mitigation measures to protect caribou at this juncture.44
V.     CONCLUSION
              We AFFIRM the superior court’s order upholding the decision of the
Department of Natural Resources.

       41
                T A NA NA B A SIN A REA P LA N 3-132 (1990), available at
http://dnr.alaska.gov/mlw/planning/areaplans/tanana/pdf/sub4e.pdf (“[M]ineral entry,
coal prospecting, and leasing will be allowed . . . . This unit is open to mineral entry
. . . . This unit is available for oil, gas, and coal leasing . . . .”).
       42
              Id.
       43
              AS 38.05.132(b)(2) (An exploration license gives the licensee “the option
to convert the exploration license for all or part of the state land . . . into an oil and gas
lease . . . upon fulfillment of the work commitments contained in the exploration
license.”) (emphasis added).
       44
              Moreover, far from ignoring impacts on caribou, the BIF provides that
“[t]he director . . . may impose seasonal restrictions on activities located in, or requiring
travel through or overflight of, important moose and caribou calving and wintering
areas.”
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