Court Opinion

ID: 2812638
Source: CourtListenerOpinion
Date Created: 2015-06-29 17:02:02.181505+00
Date Added: 2024-06-11T12:18:40.394654
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

ALASKA ESKIMO WHALING                    No. 13-70633
COMMISSION,
                     Petitioner,

                 v.                        OPINION

U.S. ENVIRONMENTAL PROTECTION
AGENCY; LISA P. JACKSON,
Administrator; DENNIS J.
MCLERRAN, Region 10
Administrator,
                       Respondents,

SHELL OFFSHORE, INC.; SHELL GULF
OF MEXICO, INC.; CONOCOPHILLIPS
COMPANY,
          Respondents-Intervenors.

       On Petition for Review of a Permit of the
          Environmental Protection Agency

               Argued and Submitted
          May 13, 2015—Anchorage, Alaska

                  Filed June 29, 2015

      Before: William C. Canby, Jr., Jay S. Bybee,
          and Paul J. Watford, Circuit Judges.

               Opinion by Judge Canby
2        ALASKA ESKIMO WHALING COMM’N V. EPA

                           SUMMARY*

                       Environmental Law

    The panel granted in part and denied in part a petition for
review brought by the Alaska Eskimo Whaling Commission,
challenging the Beaufort Permit issued by the U.S.
Environmental Protection Agency under the National
Pollutant Discharge Elimination System provisions of the
Clean Water Act, authorizing the discharge of oil and gas
exploration facilities of 13 waste streams into marine waters
of the Beaufort Sea in accordance with conditions set forth in
the Permit.

    The panel granted the petition on one issue on which the
EPA admitted error in the record, and remanded to the EPA
for a determination regarding whether the discharge of non-
contact cooling water (alone or in combination with other
authorized discharges) into the Beaufort Sea will cause
unreasonable degradation of the marine environment because
of the effect of such discharge on bowhead whales, including
deflection from their migratory paths.

    The panel denied the petition in all other respects because
the EPA’s issuance of the Permit was otherwise supported by
the record evidence, did not reflect a failure to consider an
important respect of the problem, and was not otherwise
arbitrary or capricious.

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
       ALASKA ESKIMO WHALING COMM’N V. EPA               3

                       COUNSEL

Christopher G. Winter (argued) and Layla Hughes, Crag Law
Center, Portland, Oregon, for Petitioner.

Daniel Pinkston (argued), United States Department of
Justice, Denver, Colorado; Sam Hirsch, Acting Assistant
Attorney General; Angeline Purdy, Environmental Defense
Section, Environment & Natural Resources Division, United
States Department of Justice, Washington, D.C.; Kimberly A.
Owens, Assistant Regional Counsel, United States
Environmental Protection Agency—Region 10, Seattle,
Washington, for Respondents.

Kyle W. Parker (argued), Sarah Bordelon, Crowell & Moring
LLP, Anchorage, Alaska; Cameron Leonard, Perkins Coie
LLP, Anchorage, Alaska, for Respondents-Intervenors Shell
Gulf of Mexico Inc. and Shell Offshore Inc.

Svend A. Brandt-Erichsen, Meline G. MacCurdy, Marten
Law PLLC, Seattle, Washington, for Respondent-Intervenor
ConocoPhillips Company.
4      ALASKA ESKIMO WHALING COMM’N V. EPA

                         OPINION

CANBY, Senior Circuit Judge:

     The Alaska Eskimo Whaling Commission (“AEWC”),
representing certain Alaska Native villages that engage in
subsistence hunting of bowhead whales, petitions for review
of the Beaufort Permit (“the Permit”) issued by the
Environmental Protection Agency under the National
Pollutant Discharge Elimination System (“NPDES”)
provisions of the Clean Water Act. The Permit authorizes the
discharge by oil and gas exploration facilities of 13 waste
streams into marine waters of the Beaufort Sea in accordance
with the effluent limitations, monitoring requirements, and
other conditions set forth in the Permit. AEWC does not seek
to have the Permit vacated, but asks us to remand it to the
EPA for further proceedings leading to additional restrictions
on discharges. We have jurisdiction to review the EPA’s
issuance of the Permit pursuant to 33 U.S.C. § 1369(b)(1)(F).
We deny in great part AEWC’s petition, but we grant on one
issue on which the EPA has admitted an error in the record:
we remand to the EPA for a determination regarding whether
the discharge of non-contact cooling water (alone or in
combination with other authorized discharges) into the
Beaufort Sea will cause unreasonable degradation of the
marine environment, 40 C.F.R. § 125.121(e), because of the
effect of such discharge on bowhead whales, including
deflection from their migratory paths. We deny the petition in
all other respects.

                      I. Background

   Following the 2011 expiration of the 2006 Arctic NPDES
general permit for offshore oil and gas exploration, the EPA
          ALASKA ESKIMO WHALING COMM’N V. EPA                          5

replaced that permit with two separate general permits for
exploration discharges: one for the Beaufort Sea and one for
the Chuckchi Sea. Only the Beaufort Permit is the subject of
this appeal. The Permit allows discharges only in connection
with oil exploration; actual oil development and offshore
production are not within the Permit.

    In January 2012, the EPA issued for public review and
comment a draft of the Beaufort Permit. During the three-
month comment period, public meetings were held and
testimony was taken in communities, including the Nuiqsut
Community, on the North Slope and in Anchorage. AEWC
and several other organizations also submitted to the EPA
extensive written comments on the draft Permit.

    In October 2012, the EPA issued the Permit (Permit No.
AKG282100) pursuant to Sections 402 and 403 of the Clean
Water Act, 33 U.S.C. §§ 1342, 1343. The Permit authorizes
the discharge of 13 waste streams1 “in accordance with the
effluent limitations, monitoring requirements, and other

 1
     The permitted discharges are numbered and described as follows:

          001 Water-Based Drilling Fluids and Drill Cuttings
          002 Deck Drainage
          003 Sanitary Wastes
          004 Domestic Wastes
          005 Desalination Unit Wastes
          006 Blowout Preventer Fluid
          007 Boiler Blowdown
          008 Fire Control System Test Water
          009 Non-contact Cooling Water
          010 Uncontaminated Ballast Water
          011 Bilge Water
          012 Excess Cement Slurry
          013 Muds, Cuttings, Cement at the Seafloor
6       ALASKA ESKIMO WHALING COMM’N V. EPA

conditions” set forth therein, and it is effective from
November 28, 2012 through November 27, 2017. The Permit
includes one limitation and one monitoring requirement
relevant to the issues on appeal. First, the Permit imposes a
seasonal limitation on Discharge 001 (water-based drilling
fluids and drill cuttings), prohibiting all such discharge
“during fall bowhead whale hunting in the Beaufort Sea by
the Nuiqsut and Kaktovik communities.” Second, the Permit
requires permittees to monitor “to the maximum extent
possible” for possible deflection of marine mammals when
discharging Discharge 001 and Discharge 009 (non-contact
cooling water). The Permit provides that it may be modified
or revoked “if, on the basis of any new data, the Director or
DEC determines that continued discharges may cause
unreasonable degradation of the marine environment.”

     AEWC now appeals, arguing that the EPA failed to
consider adequately the extent to which discharges authorized
under the Permit will interfere with subsistence uses of the
Beaufort Sea, particularly the subsistence communities’ fall
hunt for bowhead whales. AEWC contends that the permitted
discharges will divert the whales far from their normal
seasonal migratory routes, making the hunting of them less
productive and far more dangerous. AEWC challenges the
EPA’s failure to include in the Permit the following two sets
of restrictions: first, a total prohibition (“zero discharge
restriction”) on the discharge of six of the thirteen authorized
waste streams: drilling fluids and cuttings (No. 001), sanitary
and domestic waste (Nos. 003, 004), ballast water (No. 010),
bilge water (No. 011), and certain muds, cuttings, cement at
the seafloor (No. 013); and second, a prohibition during the
fall bowhead hunting season of the discharge of an additional
five waste streams: non-contact cooling water (No. 009) and,
if not brought within the zero discharge restriction, sanitary
        ALASKA ESKIMO WHALING COMM’N V. EPA                   7

and domestic waste (Nos. 003, 004), bilge water (No. 011),
and certain muds, cuttings, cement at the seafloor (No. 013).

    “Challenges to EPA actions under section 509(b) of the
Clean Water Act, 33 U.S.C. § 1369(b), are reviewed under
the arbitrary and capricious standard of the Administrative
Procedure Act.” Akiak Native Cmty. v. EPA, 625 F.3d 1162,
1165 (9th Cir. 2010). Under this deferential standard of
review, we “‘will not vacate an agency’s decision unless it
has [1] relied on factors which Congress had not intended it
to consider, [2] entirely failed to consider an important aspect
of the problem, [3] offered an explanation for its decision that
runs counter to the evidence before the agency, or [4] is so
implausible that it could not be ascribed to a difference in
view or the product of agency expertise.’” Id. (quoting Nat’l
Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S.
644, 658 (2007) (internal quotation marks omitted)).

                II. The Error in the Record

     Along with the Permit, the EPA issued three documents
that, taken together, explain the bases for the EPA’s
permitting decision: (1) its Response to Comments, which
includes the EPA’s responses to all comments it received;
(2) its Ocean Discharge Criteria Evaluation, issued “to review
the discharges authorized under [the Permit] and evaluate
their potential [to] cause unreasonable degradation of the
marine environment[,]”; and (3) its Environmental Justice
Analysis in support of the Permit. In its response to a
comment requesting a seasonal restriction on the discharge of
non-contact cooling water and related chemicals, sanitary and
domestic wastes, and bilge water, “because these waste
streams risk deflecting bowhead whales from their migratory
paths,” the EPA stated that it “concluded that non-contact
8       ALASKA ESKIMO WHALING COMM’N V. EPA

cooling water will not result in an unreasonable degradation
to the marine environment due to the permit restrictions and
monitoring requirements placed on this discharge and
because temperature is expected to dissipate and achieve
complete mixing within 100 meters of the discharge
location.” Similarly, in the Ocean Discharge Criteria
Evaluation, the EPA stated that it used a model to evaluate
the dilution of all the drilling-related effluents associated with
each of the discharges authorized by the Beaufort general
permit, and that “[t]he predicted dilution for th[e] worst-case
scenario was approximately 600:1 at 100 meters from the
discharge point.”

    On the eve of oral argument, the EPA filed with this court
a letter in which it candidly acknowledged its discovery of a
misstatement in the record and in its brief. In its letter, the
EPA reported that the modeling it cited in support of its
statements that the temperature of cooling water would
dissipate and mix within 100 meters of discharge, and that all
discharges would dilute to a ratio of 600:1 within 100 meters
of discharge, in fact did not include non-contact cooling water
in the model. That model was for drilling-related effluents,
not cooling water. EPA’s letter further stated that cooling
water was included in other modeling that applied to a wide
range of discharges. An attachment to the letter contained a
table (“Table 6”) that included a list of numbers and figures
for the temperature effects at various cooling water
discharges.

    Under the controlling rule for the review of administrative
agency actions, “a reviewing court, in dealing with a
determination or judgment which an administrative agency
alone is authorized to make, must judge the propriety of such
action solely by the grounds invoked by the agency. If those
        ALASKA ESKIMO WHALING COMM’N V. EPA                  9

grounds are inadequate or improper, the court is powerless to
affirm the administrative action by substituting what it
considers to be a more adequate or proper basis.” SEC v.
Chenery Corp. (Chenery II), 332 U.S. 194, 196 (1947). We
must remand rather than combing the record for evidence on
which the agency may have relied. Id.

    Here, neither the EPA’s letter and its attachment, nor the
EPA’s representations at oral argument, explained the import
of the agency’s error. In addition to the table in its
attachment, the letter discusses a list of other figures and
tables in the Further Excerpts of Record. These figures and
tables are no substitute for the agency’s on-the-record
explanation of what the evidence showed and how that
evidence supports its ultimate conclusions. The EPA’s
erroneous statement that cooling water would be mixed and
diluted to a ratio of 600:1 suggested that this level of mixing
and dilution was unlikely to change the behavior of bowhead
whales. We are unable to extract a similar conclusion from
the figures supplied or referred to in the EPA’s letter. With
the record in this posture, we cannot properly answer the
question whether the EPA’s error affected its decision. We
conclude, therefore, that the error in the record to which the
EPA drew our attention requires remand to address the issue
involved.

    We remand to the EPA to reconsider, in light of its
acknowledged error, its determination that discharge of non-
contact cooling water (alone or along with other authorized
discharges) will not cause unreasonable degradation of the
marine environment, and to identify evidence in the record
sufficient to support its reconsidered decision concerning the
possible effect, or non-effect, of the discharge of non-contact
10      ALASKA ESKIMO WHALING COMM’N V. EPA

cooling water on the bowhead whale migration and
subsistence hunting season in the Beaufort Sea.

   For the reasons and in the manner discussed below, we
deny the petition for review in all other respects.

           III. Adherence to Statutory Criteria

    The Clean Water Act requires the EPA to promulgate
guidelines for determining degradation of marine waters,
which shall address several considerations listed in the
statute. 33 U.S.C. § 1343(c)(1)(A)–(G). AEWC argues that
the EPA erred in failing to base its decision on two of these
considerations, “the effect of disposal[] of pollutants on
esthetic, recreation, and economic values,” id.
§ 1343(c)(1)(C), and “the effect on alternate uses of the
oceans, such as mineral exploitation and scientific study,” id.
§ 1343(c)(1)(G).

    AEWC’s argument misses the mark. The organic statute
sets forth the considerations that EPA was to follow when
promulgating its own regulations, not the criteria that EPA
must apply to each permitting decision it makes. AEWC
disclaims any Chevron-style challenge to EPA’s regulations
under the statute. Thus, we are tasked only with deciding
whether EPA’s application of its regulatory criteria to the
permitting decision challenged here was arbitrary or
capricious.

          IV. Adherence to Regulatory Criteria

   The remainder of AEWC’s arguments challenge the
EPA’s consideration of the record evidence in light of the
regulatory requirements for the issuance of NPDES permits,
       ALASKA ESKIMO WHALING COMM’N V. EPA                11

40 C.F.R. § 125.123, and the “unreasonable degradation”
criteria set out in the implementing regulations, 40 C.F.R.
§ 125.122.

                              A

   The EPA issued the Permit under paragraph (a) of
40 C.F.R. § 125.123, which provides in pertinent part:

       (a) If the director on the basis of available
       information . . . determines prior to permit
       issuance that the discharge will not cause
       unreasonable degradation of the marine
       environment after application of any
       necessary conditions specified in
       § 125.123(d), he may issue an NPDES permit
       containing such conditions.

The EPA did not purport to act under paragraph (c), which
provides in pertinent part:

       (c) If the director has insufficient information
       to determine prior to permit issuance that
       there will be no unreasonable degradation of
       the marine environment . . . there shall be no
       discharge of pollutants into the marine
       environment unless the director on the basis
       of available information . . . determines that:

           (1) Such discharge will not cause
           irreparable harm to the marine
           environment during the period in which
           monitoring is undertaken, and
12      ALASKA ESKIMO WHALING COMM’N V. EPA

           (2) There are no reasonable alternatives to
           the on-site disposal of these materials, and

           (3) The discharge will be in compliance
           with all permit conditions established
           pursuant to paragraph (d) of this section.

Paragraph (d) then provides certain conditions that are
mandatory for permits issued pursuant to paragraph (c),
including a monitoring program to assess the impact of the
discharge on aquatic life, and a clause providing for
revocation of the permit if the director determines at any time
that continued discharges may cause unreasonable
degradation of the marine environment.

    Proceeding under paragraph (a), the director determined
on the basis of available information that the discharge would
not cause unreasonable degradation of the marine
environment after the monitoring condition and cancellation
clause of paragraph (d) were added to the Permit. EPA
accordingly issued the Permit.

    AEWC argues that, because the EPA applied two
conditions specified in paragraph (d), the EPA somehow
became subject to paragraph (c) and its requirement that the
director determine that there were no reasonable alternatives
to on-site disposal of materials. This contention, however,
simply is not what the regulations provide. The director was
free to impose two conditions specified in paragraph (d), as
paragraph (a) authorized. Nothing in the regulations provides
that proceeding in such a manner somehow converts a
paragraph (a) proceeding to a paragraph (c) proceeding.
        ALASKA ESKIMO WHALING COMM’N V. EPA                 13

    Accordingly, should the EPA determine on remand that
available information still supports its determination that
discharges will not cause unreasonable degradation of the
marine environment, there is no error in its decision to
proceed under subsection (a). If, however, the EPA
determines on remand that the record does not contain
sufficient “available information” to support its determination
that “the discharge[s] will not cause unreasonable degradation
of the marine environment after application of any necessary
conditions specified in § 125.123(d),” 40 C.F.R.
§ 125.123(a), its issuance of the Permit pursuant to subsection
(a) cannot stand, and it will be obliged to proceed under
subsection (c) and conduct the alternatives analysis and meet
the other requirements for permit determinations under that
subsection.

                              B

    The main thrust of AEWC’s remaining arguments is that
the EPA’s decision regarding discharges other than non-
contact cooling water was not adequately supported by the
evidence. AEWC also argues that the EPA did not provide a
rational explanation of how the monitoring program will
prevent conflicts with subsistence uses and that the EPA’s
reliance on the monitoring program is arbitrary and irrational.
These arguments stress the EPA’s acknowledgment of record
evidence indicating the discharges may conflict with
subsistence uses.

    The Clean Water Act’s implementing regulations set out
ten criteria the EPA must consider in making its
determination of “whether a discharge will cause
unreasonable degradation of the marine environment.” 40
C.F.R. § 125.122(a)(1)-(10). AEWC’s challenge to the
14      ALASKA ESKIMO WHALING COMM’N V. EPA

sufficiency of the EPA’s analysis of the record evidence in
light of the regulatory criteria focuses on the sixth and ninth
criteria: “[t]he potential impacts on human health through
direct and indirect pathways,” and “[s]uch other factors
relating to the effects of the discharge as may be appropriate.”
40 C.F.R. § 125.122(a)(6), (9). The record is, however,
replete with evidence that the EPA heard and considered the
concerns raised by AEWC. The record evidence also reflects
the EPA’s consideration of the ocean discharge criteria in
making its determination that the authorized discharges
would not cause unreasonable degradation of the marine
environment, 40 C.F.R. § 125.122(a).

    To the extent that AEWC takes issue with the EPA’s
factual findings other than those specifically related to the
effect of the discharge of non-contact cooling water on the
bowhead whale migration, those findings are supported by
the administrative record and are entitled to our deference.
See Arkansas v. Oklahoma, 503 U.S. 91, 113 (1992)
(explaining that, when reviewing an agency’s adjudicative
action, the reviewing court “should not supplant the agency’s
findings merely by identifying alternative findings that could
be supported by substantial evidence”). EPA’s issuance of
the permit on the basis of those findings was not arbitrary or
capricious.

                               C

    AEWC also argues that the EPA did not provide a rational
explanation of how the monitoring program will prevent
conflicts with subsistence uses and that the EPA’s reliance on
the monitoring program is arbitrary and irrational.
        ALASKA ESKIMO WHALING COMM’N V. EPA                  15

    The record contains a detailed description of the
monitoring program, including requirements for monthly
reports of effluent monitoring and testing, reports after
drilling is complete, and ongoing monitoring and reporting of
marine mammal deflections during discharges of drilling
fluids and cooling water. The EPA’s determination that the
reporting requirements under the monitoring program are
adequate was not unreasonable. See, e.g., Kern Cnty. Farm
Bureau v. Allen, 450 F.3d 1072, 1076 (9th Cir. 2006) (“The
arbitrary and capricious standard is ‘highly deferential,
presuming the agency action to be valid and [requires]
affirming the agency action if a reasonable basis exists for its
decision.’” (quoting Indep. Acceptance Co. v. California,
204 F.3d 1247, 1251 (9th Cir. 2000) (quotations and citations
omitted)). There is accordingly no basis for concluding that
the EPA’s design and implementation of the monitoring
program was arbitrary or capricious. This conclusion,
however, does not preclude the EPA from reassessing or
adjusting its monitoring program as necessary or appropriate
in light of its reconsidered decision of degradation of the
marine environment on remand.

                               D

    AEWC contends that the EPA should bring its mitigation
measures in line with those that the National Marine Fisheries
Service (“NMFS”) adopted in an authorization it issued under
the Marine Mammal Protection Act and that are, in fact, the
same measures that AEWC and intervenors Shell Gulf of
Mexico and Shell Offshore Inc. agreed to in their 2012
Conflict Avoidance Agreement.

    AEWC identifies no legal authority, and we find none, for
the proposition that either the NMFS determination under a
16       ALASKA ESKIMO WHALING COMM’N V. EPA

different statute for a different purpose (prevention of noise
disruption of marine mammals) or the private Conflict
Avoidance Agreement between oil companies and the
AEWC, must or should be incorporated into the Permit
provisions. The NMFS concurred in EPA’s determination
that EPA’s planned action in issuing the Permit “may affect,
but is not likely to adversely affect” bowhead whales in the
Beaufort Sea. The EPA considered the Conflict Avoidance
Agreement, but it was not required to write the terms of that
private agreement into the Permit.

                        V. Conclusion

     In sum, we grant in part the AEWC’s petition for review
and we remand this matter to the EPA to reconsider, in light
of its acknowledged error, its determination that discharge of
non-contact cooling water will not cause unreasonable
degradation of the marine environment, and to identify
evidence in the record sufficient to support its reconsidered
decision concerning the possible effect, or non-effect, of the
discharge of non-contact cooling water on the bowhead whale
migration and subsistence hunting season in the Beaufort Sea.
We deny the petition in all other respects because the EPA’s
issuance of the Permit is otherwise supported by the record
evidence, does not reflect a failure to consider an important
aspect of the problem, and is not otherwise arbitrary or
capricious.

     The parties shall bear their own costs on this appeal.

   PETITION GRANTED IN PART; DENIED IN
PART; and REMANDED for further proceedings
consistent with this opinion.