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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO
Civil Action No.: 1:16-cv-03141-REB WILDEARTH GUARDIANS,
Petitioner, v. U.S. BUREAU OF LAND MANAGEMENT,
Respondent.
PETITIONER’S OPENING BRIEF
______________________________________________________________________
ii
TABLE OF CONTENTS
TABLE OF AUTHORITIES.............................................................................................. iv GLOSSARY OF ABBREVIATIONS ................................................................................vii INTRODUCTION..............................................................................................................1 LEGAL FRAMEWORK.....................................................................................................3 FACTUAL BACKGROUND ..............................................................................................7
I. OZONE POLLUTION AND IMPACTS.....................................................................7
II. BLM’S OIL AND GAS LEASING AND DEVELOPMENT PROCESS .....................9
III. THE DENVER NONATTAINMENT AREA, COLORADO SIP REQUIREMENTS, AND OZONE PRECURSOR EMISSIONS FROM OIL AND GAS ACTIVITY......10
IV. BLM’S 2015 OIL AND GAS LEASE SALES IN THE DENVER NONATTAINMENT AREA...................................................................................13
STANDARD OF REVIEW ..............................................................................................15 ARGUMENT...................................................................................................................16
I. GUARDIANS HAS STANDING .............................................................................16
II. BLM ARBITRARILY DETERMINED THAT IT DID NOT NEED TO MAKE CONFORMITY DETERMINATIONS FOR ITS LEASING DECISIONS................18
A. BLM’s Leasing Decisions Indirectly Result in Ozone Precursor Emissions That Exceed 100 TPY.......................................................................................20
B. Future Indirect Emissions from BLM’s Leasing Decisions are Reasonably Foreseeable. .....................................................................................................22
C. The Exemption for Initial Outer Continental Shelf Lease Sales is Inapplicable to BLM’s Onshore Lease Sales. .......................................................................26
iii
D. The NSR Permit Exemption Does Not Apply to Lease Sale Authorizations.....28 CONCLUSION ...............................................................................................................29
iv
TABLE OF AUTHORITIES
Cases Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971).........................16 City of Olmsted Falls v. FAA, 292 F.3d 261 (D.C. Cir. 2002).........................................15 Conservation Law Found. v. Busey, 79 F.3d 1250 (1st Cir. 1996) ................................15 Ctr. for Biol. Diversity v. U.S. Dept. of the Interior, 563 F.3d 466 (D.C. Cir. 2009) ........28 Defenders of Wildlife v. Gutierrez, 532 F.3d 913 (D.C. Cir.2008)................ 16 Friends of the Earth v. Laidlaw, 528 U.S. 167 (2000) ....................................................16 Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. 333 (1977).................16 Lemon v. Geren, 514 F.3d 1312 (D.C. Cir. 2008) ..........................................................17 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ......................................................17 McDonald v. Clark, 771 F.2d 460 (10th Cir. 1985).........................................................18 Motor Vehicle Mfrs. v. State Farm, 463 U.S. 29 (1983) .....................................15, 22, 25 New Mexico ex rel. Richardson, 565 F.3d 683 (10th Cir. 2009) ....................................11 Olenhouse v. Commodity Credit Corp., 42 F.3d 1560 (10th Cir. 1994) .........................15 Pease v. Udall, 332 F.2d 62 (9th Cir.) ............................................................................18 People of the State of Calif. ex rel. Imperial County Air Pollution Control Dist. v. U.S. Dept. of the Interior, 767 F.3d 781 (9th Cir. 2014) ....................................15, 25 SEC v. Chenery Corp., 332 U.S. 194 (1947) .................................................................15 South Coast Air Quality Mgmt. Dist. v. F.E.R.C., 621 F.3d 1085 (9th Cir. 2010).....25, 26 Wyoming Outdoor Council v. U.S. Forest Service, 165 F.3d 43 (D.C. Cir. 1999)..........28
Statutes 30 U.S.C. § 226(a) ...........................................................................................................9 42 U.S.C. § 7401(b)(1) .....................................................................................................4 42 U.S.C. § 7407(d)(1)(A)(i) .............................................................................................8 42 U.S.C. § 7407(d)(1)(A)(ii) ............................................................................................8 42 U.S.C. § 7408..............................................................................................................7 42 U.S.C. § 7409(a) .........................................................................................................4 42 U.S.C. § 7409(b) .........................................................................................................4 42 U.S.C. § 7410(a) .........................................................................................................4 42 U.S.C. § 7410(a)(1) .....................................................................................................4 42 U.S.C. § 7410(a)(2)(A) ................................................................................................4 42 U.S.C. § 7410(k)(3) .....................................................................................................4 42 U.S.C. § 7506(c)(1) .................................................................................................3, 5 42 U.S.C. § 7506(c)(1)(A-B).............................................................................................3 5 U.S.C. § 706(2)(A) ......................................................................................................15 5 U.S.C. §§ 701-706 ........................................................................................................3
v
Other Authorities 1970 U.S. Code Cong. & Admin. News 5356 ..................................................................4 5 CCR 1001-12 ..............................................................................................................12 5 CCR-1001-14 ..............................................................................................................11 5 CCR-1001-5 ................................................................................................................29 58 Fed. Reg. 63,214 (Nov. 30, 1993).................................................................19, 27, 29 58 Fed. Reg. 63,247 (Nov. 23, 1993)...............................................................................5 64 Fed. Reg. 63,206 (Nov. 19, 1999).........................................................................5, 12 73 Fed. Reg. 16,436 (March 27, 2008) ............................................................................7 75 Fed. Reg. 17,254 (April 5, 2010).................................................................................5 77 Fed. Reg. 30,088 (May 21, 2012) .............................................................................12 80 Fed. Reg. 65,292 (Oct. 26, 2015) ...............................................................................8 81 Fed. Reg. 26,697 (May 4, 2016) ...............................................................................12 81 Fed. Reg. 96,033 (Dec. 29, 2016).............................................................................22 82 Fed. Reg. 29246 (June 28, 2017) ...............................................................................9 H.R.Rep. No. 1146, 91st Cong., 2d Sess. 1,1 .................................................................4
Regulations 40 C.F.R. § 1502.16.........................................................................................................9 40 C.F.R. § 153(b)(1) .......................................................................................................3 40 C.F.R. § 50.1...............................................................................................................7 40 C.F.R. § 50.15.............................................................................................................8 40 C.F.R. § 51.851(g) ......................................................................................................5 40 C.F.R. § 93.150(a) ....................................................................................................12 40 C.F.R. § 93.150(b) ......................................................................................................6 40 C.F.R. § 93.152.....................................................................................3, 6, 18, 23, 26 40 C.F.R. § 93.153(b)(1) ..........................................................................................18, 20 40 C.F.R. § 93.153(c)(1) ..................................................................................................6 40 C.F.R. § 93.153(c)(3)(i) .......................................................................................26, 27 40 C.F.R. § 93.153(d)(1) ............................................................................................6, 28 40 C.F.R. § 93.153(f) .......................................................................................................6 40 C.F.R. § 93.154...........................................................................................................6 40 C.F.R. § 95.153(b) ......................................................................................................6 40 C.F.R. §§ 51.850-51.860.............................................................................................5 43 C.F.R. § 3101.1-2.....................................................................................................26 43 C.F.R. § 1601.0-5......................................................................................................28 43 C.F.R. § 1601.0-6........................................................................................................9 43 C.F.R. § 3101.1-2..........................................................................................10, 19, 28 43 C.F.R. § 3101.1-3................................................................................................10, 18 43 C.F.R. § 3108.3(d) ....................................................................................................10
vi
43 C.F.R. § 3120.3-1......................................................................................................10 43 C.F.R. § 3160.0-4........................................................................................................9 43 C.F.R. § 3162.3-1(c) .................................................................................................10 43 C.F.R. §§ 1601-1610.8................................................................................................9
vii
GLOSSARY OF ABBREVIATIONS
APA Administrative Procedure Act
APD Application for Permit to Drill
BLM U.S. Bureau of Land Management
EA Environmental Assessment
EPA Administrator, Environmental Protection Agency
NAAQS National Ambient Air Quality Standards
NEPA National Environmental Policy Act
NOx Nitrogen Oxide
NSR New Source Review
OCS Outer Continental Shelf
RFDS Reasonably Foreseeable Development Scenario
RMP Resource Management Plan
SIP State Implementation Plan
tpy Tons Per Year
VOC Volatile Organic Compound
INTRODUCTION
The Denver Metro and North Front Range region is under siege by ground-level
ozone pollution. The U.S. Environmental Protection Agency (“EPA”) has linked ozone to
asthma, lung disease, other respiratory ailments, and heart attacks. The most recent
scientific evidence compiled by EPA suggests that excessive ozone exposure
contributes to premature death. Ozone is the main ingredient in smog. From Douglas
County, Colorado, north to Larimer and Weld Counties, ozone levels consistently
exceed allowable health limits, putting the region’s health at great risk.
In 2008, EPA promulgated a stricter 8-hour standard for ozone concentrations
that superseded a previous limit promulgated in 1997. EPA strengthened the 8-hour
ozone limit because significant new scientific research demonstrated that serious
respiratory and cardiovascular effects occurred when humans were exposed to ozone
concentrations below the 1997 limit. EPA strengthened the 2008 limit again in 2015
because it found the 2008 limit did not adequately protect human health.
For many years, EPA has declared a nine-county region along Colorado’s Front
Range to be in violation of health-based ozone limits. EPA has designated this region
as a “Nonattainment Area” for ozone. The nine counties in the ozone Nonattainment
Area include all of Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Jefferson
Counties and portions of Larimer and Weld Counties. Hereafter, this region will be
referred to as the “Denver Nonattainment Area.”
EPA first designated the Denver Nonattainment Area because it exceeded the
1997 ozone standard. In 2008, EPA again designated the Denver Nonattainment Area
as in nonattainment for violating the 2008 ozone standard. The Area remains in violation
2
of the 2008 ozone standard. In 2016, EPA reclassified the Denver Nonattainment Area
from a “marginal” to a “moderate” nonattainment area due to an ongoing failure to
comply with the 2008 ozone standard. In 2017, the Denver Nonattainment Area is again
set to be designated as in nonattainment with the 2015 ozone standard. The ozone
problem in the Denver Nonattainment Area is not getting better. It is getting worse.
The elevated levels of ozone in the Denver Nonattainment Area are attributable,
in part, to the significant amount of oil and gas development occurring within the Area’s
boundaries, particularly in and around Weld County. Oil and gas development activities,
including wellhead compressors, condensate tanks, and other pollutant-emitting
activities release high levels of the pollutants that contribute to the formation of ozone.
Defendant U.S. Bureau of Land Management (“BLM”) has authorized much of this oil
and gas activity through the sale and issuance of federal oil and gas leases.
BLM recently authorized additional oil and gas activities within the Denver
Nonattainment Area by authorizing, selling, and issuing 67 leases in two lease sales
held in May and November of 2015, covering more than 36,000 acres. Much of this
acreage is situated in the Pawnee National Grassland, an iconic expanse of public
lands in northeast Colorado. Development of these new leases will contribute to ozone
levels in the Denver Nonattainment Area, and will also contribute to the Area’s
continuing violations of the 2008 ozone standard.
A “conformity” determination is one of the measures in the Clean Air Act
designed to clean up air quality in nonattainment areas. The conformity provision
requires federal agencies to ensure their actions “conform” (i.e., do not interfere) with
state implementation plans (“SIPs”) for attaining and maintaining air quality standards
3
such as the ozone standard. 42 U.S.C. § 7506(c)(1). A federal action conforms to a SIP
if it does not: cause or contribute to any new violation of any air quality standard in the
nonattainment area; increase the frequency or severity of any existing air quality
standard violation; or delay timely attainment of any standard. Id. at § 7506(c)(1)(A-B).
EPA has promulgated regulations delineating the circumstances under which an agency
must make a conformity determination. These include when a federal action will emit
more than 100 tons per year of an air pollutant such as ozone, and when emissions
from the federal action are reasonably foreseeable. 40 C.F.R. §§ 93.152, 153(b)(1).
This case turns on whether emissions from lease development are reasonably
foreseeable at the leasing stage, triggering BLM’s obligation to make a conformity
determination before it sells and issues leases.
To protect air quality and public health within the Denver Nonattainment Area,
Petitioner WildEarth Guardians (“Guardians”) brings the present action alleging that
BLM’s authorizations of increased oil and gas development in the Denver
Nonattainment Area through the 2015 May and November leasing authorizations violate
the Clean Air Act by not making a conformity determination as required by 42 U.S.C. §
7506(c)(1), within the meaning of the Administrative Procedure Act, 5 U.S.C. §§ 701-
706. Guardians also alleges BLM arbitrarily determined that the conformity requirement
did not apply at the leasing stage, and that the “action” of authorizing lease sales fit
within one of the narrow conformity exemptions.
LEGAL FRAMEWORK
Congress enacted the Clean Air Act to “speed up, expand, and intensify the war
against air pollution in the United States with a view to assuring that the air we breathe
4
throughout the Nation is wholesome once again.” H.R.Rep. No. 1146, 91st Cong., 2d
Sess. 1,1; 1970 U.S. Code Cong. & Admin. News 5356, 5356. The Clean Air Act’s
explicit goal is to, among other things, “protect and enhance the quality of the Nation’s
air resources so as to promote the public health and welfare and the productive capacity
of the population.” 42 U.S.C. § 7401(b)(1). Towards this end, the Clean Air Act employs
a model of cooperative federalism. It starts when the U.S. Environmental Protection
Agency (“EPA”) sets health, welfare and environmentally-based National Ambient Air
Quality Standards (“NAAQS”) for criteria air pollutants in accordance with Section 109 of
the Act. 42 U.S.C. § 7409(a). EPA is required to establish NAAQS to ensure that
pollution concentrations in the air that the public breathes are limited to the levels
requisite to protect, with an adequate margin of safety, health, welfare and the
environment. 42 U.S.C. § 7409(b).
Once EPA has established a NAAQS, individual states must develop state
implementation plans (“SIPs”) to “provid[e] for implementation, maintenance, and
enforcement” of the standards. 42 U.S.C. § 7410(a)(1). These plans consists of
“emission limitations and other control measures, means, or techniques...as well as
schedules and timetables for compliance, as may be necessary or appropriate to meet
the [Clean Air Act].” 42 U.S.C. § 7410(a)(2)(A). States submit these plans to EPA for
approval in accordance with Section 110 of the Clean Air Act. See 42 U.S.C. § 7410(a).
EPA reviews SIP submissions to ensure that the plan meets the minimum requirements
of the Clean Air Act. If the SIP meets these requirements, EPA approves the plan or any
plan revision. See 42 U.S.C. § 7410(k)(3) (providing that EPA shall approve,
disapprove, or partially approve or disapprove a state implementation plan).
5
The Clean Air Act prohibits any federal agency from authorizing activities that do
not conform to the appropriate SIP. 42 U.S.C. § 7506(c)(1). The Clean Air Act defines
conformity to a SIP as:
(A) conformity to an implementation plan’s purpose of eliminating or reducing the severity and number of violations of the national ambient air quality standards and achieving expeditious attainment of such standards; and (B) that such activities will not— (i) cause or contribute to any new violation of any standard in any area;
(ii) increase the frequency or severity of any existing violation of any standard in any area; or
(iii) delay timely attainment of any standard or any required interim emission reductions or other milestones in any area.
Id. at § 7506(c)(1)(A-B). The “assurance of conformity” to a SIP “shall be an affirmative
responsibility” of a federal agency. Id. at § 7506(c)(1).
In 1993 EPA promulgated the General Conformity Rule that established criteria
and procedures governing conformity determinations for all Federal actions. 58 Fed.
Reg. 63,247 (Nov. 23, 1993), 40 C.F.R. §§ 51.850-51.860. These rules were
incorporated by reference into Colorado’s SIP in 1999. See 64 Fed. Reg. 63,206 (Nov.
19, 1999).
On April 5, 2010, EPA revised the General Conformity Rule. See 75 Fed. Reg.
17,254-79 (April 5, 2010). The newly promulgated 40 C.F.R. part 93, subpart B (§§
93.150-93.165), “essentially duplicates” the old 40 C.F.R. part 51, subpart W (§§
51.850-51.860) conformity regulations, deleting all of subpart W except for § 51.851,
which was revised. 75 Fed. Reg. 17,256. “Any previously applicable SIP or TIP
requirements relating to conformity remain enforceable until EPA approves the revision
to the SIP or TIP to specifically remove them.” 40 C.F.R. § 51.851(g).
6
For federal actions not related to transportation plans, “a conformity
determination is required for each criteria pollutant or precursor where the total of direct
and indirect emissions of the criteria pollutant or precursor in a nonattainment or
maintenance area caused by a Federal action would equal or exceed . . . 100
[tons/year.]”. 40 C.F.R. § 95.153(b). “Direct emissions” are defined as “those emissions
of a criteria pollutant or its precursors that are caused or initiated by the Federal action .
. . and occur at the same time and place as the action.” 40 C.F.R. § 93.152. “Indirect
emissions” are defined as “those emissions of a criteria pollutant or its precursors that
[a]re caused or initiated by the Federal action . . . but occur at a different time or place
as the action; [t]hat are reasonably foreseeable; [t]hat the agency can practically control;
[f]or which the agency has continuing program responsibility.” Id.
Federal agencies must make a determination that a federal action that will emit
one or more criteria pollutants conforms to the applicable SIP before undertaking the
action. 40 C.F.R. § 93.150(b). To demonstrate conformity with a SIP, the agency must
follow the procedures at 40 C.F.R. §§ 93.155-160 and §§ 93.162-165. 40 C.F.R. §
93.154.
There are limited exceptions to general conformity requirements under the Clean
Air Act, such as when emissions from federal actions are below the 100 tons per year
(“tpy”) threshold, 40 C.F.R. § 93.153(c)(1), and portions of federal actions that require a
permit under the Clean Air Act’s new source review program, id. at 93.153(d)(1).
Federal actions that meet the criteria for a “presumed to conform” designation are also
exempt from general conformity requirements. Id. at 93.153(f).
7
FACTUAL BACKGROUND
I. OZONE POLLUTION AND IMPACTS Ozone is one of six “criteria” pollutants considered harmful to public health and
the environment for which EPA has established a NAAQS under the Clean Air Act. See
40 C.F.R. § 50.1, et seq. (setting forth NAAQS). Ground-level ozone is a dangerous
pollutant that causes a variety of significant adverse impacts to human health.
According to EPA, elevated levels of ozone have a “causal relationship[] with a range of
respiratory morbidity effects, including lung function decrements, increased respiratory
symptoms, airway inflammation, increased airway responsiveness, and respiratory-
related hospitalizations and emergency department visits . . . .” 73 Fed. Reg. 16,436,
16,443-46 (March 27, 2008). Furthermore, EPA has stated that the latest scientific
evidence on ozone effects is “highly suggestive that [ozone] directly or indirectly
contributes to non-accidental and cardiorespiratory-related mortality,” including
“premature mortality.” Id. at 16,443-44. EPA has concluded that individuals with asthma
are at particular risk from the adverse effects of ozone. Id.
Ozone forms when sunlight reacts with two key air pollutants—volatile organic
compounds (“VOCs”) and nitrogen oxides (“NOx”). VOCs and NOx are referred to as
ozone precursors. Ozone is a criteria pollutant under the federal Clean Air Act, 42
U.S.C. § 7408. Until 2008, the effective NAAQS for ozone was 0.084 parts per million
(“ppm”) over an 8-hour period. This standard is referred to as the 1997 ozone standard.
On March 27, 2008, EPA published a final rule for a new ozone NAAQS that
strengthened the 8-hour standard by lowering the limit to 0.075 ppm. 73 Fed. Reg.
16,436 (March 27, 2008) (“2008 ozone standard”). This new ozone standard became
8
effective on May 27, 2008, superseding the prior 1997 ozone NAAQS as of that time.
EPA’s decision to strengthen the ozone standard was based on numerous human
health studies conducted over the past decade documenting the adverse effects of
ozone on public health. After examining the data from these studies, EPA concluded
that “the current [1997 ozone] standard is not requisite to protect public health with an
adequate margin of safety because it does not provide sufficient protection and that
revision of the current [ozone] standard is needed to provide increased public health
protection.” 73 Fed. Reg. 16,471.
Ozone concentrations are measured on an hourly basis. 40 C.F.R. § 50.15. An
exceedance of the ozone standard occurs if the average of eight consecutive hourly
readings exceeds the 2008 ozone standard of 0.075 ppm. Id. A violation of the standard
occurs when the “3-year average of the annual fourth-highest 8-hour” ozone
concentrations exceeds 0.075 ppm. Id. When the 3-year average for ozone levels for
any given region falls below 0.075 ppm, the region is considered to be in attainment
with the ozone NAAQS. 42 U.S.C. § 7407(d)(1)(A)(ii). Conversely, when the 3-year
ozone average is above 0.075 ppm, the region is considered a “nonattainment” area for
ozone. 42 U.S.C. § 7407(d)(1)(A)(i).
In response to evolving science and public health needs, in 2015 EPA
strengthened the 2008 ozone NAAQS, setting a new, more stringent 8-hour limit of
0.070 ppm. 80 Fed. Reg. 65,292 (Oct. 26, 2015). According to EPA, the new limit was
necessary “to provide requisite protection of public health and welfare . . .” Id. On June
28, 2017, the EPA Administrator announced he was delaying implementation of the
2015 ozone standard by one year, to October 1, 2018, to allow him “additional time” to
9
consider ozone area designations submitted by states. 82 Fed. Reg. 29246-47 (June
28, 2017).
II. BLM’S OIL AND GAS LEASING AND DEVELOPMENT PROCESS BLM manages onshore oil and gas development through a three-phase process
of planning, leasing, and drilling. Each phase is distinct, serves distinct purposes, and is
subject to distinct rules, policies, and procedures; although the three phases, ultimately,
must ensure “orderly and efficient” development. 43 C.F.R. § 3160.0-4.
In the first phase, BLM prepares a Resource Management Plan (“RMP”) in
accordance with 43 C.F.R. §§ 1601-1610.8. With respect to fluid minerals leasing
decisions, the RMP determines which lands containing federal minerals will be open to
leasing and under what conditions, and analyzes the direct, indirect, and cumulative
impacts from predicted implementation-stage development in the planning area. 30
U.S.C. § 226(a); 40 C.F.R. §§ 1502.16, 1508.7, 1508.8. Developing an RMP requires
BLM to predict the extent to which different activities, if permitted, would foreseeably
occur. For fluid minerals, this prediction is premised on a reasonably foreseeable
development scenario (“RFDS”) which forecasts the pace and scope of development.
BLM’s regulations require development of an EIS when preparing an RMP, and that
“wherever possible, the proposed resource management plan shall be published in a
single document with the related environmental impact statement.” 43 C.F.R. § 1601.0-
6. BLM does not identify specific leases for sale at the RMP stage.
In the second phase, BLM identifies the boundaries of lands to be offered for sale
and proceeds to sell and execute those leases through a lease sale and issuance. Oil
and gas companies nominate the leases offered for sale through the submission of an
10
“Expression of Interest.” 43 C.F.R. § 3120.3-1. BLM then proceeds by preparing a list of
oil and gas lease parcels to be offered for actual sale. BLM solicits bids on a specific
sale day and, based on those bids, BLM awards and issues leases for the identified
sale parcels. Prior to a BLM lease sale, BLM has the authority to subject leases to terms
and conditions, which can serve as “stipulations” to protect the environment. 43 C.F.R.
§ 3101.1-3. Once issued, oil and gas leases confer “the right to use so much of the
leased lands as is necessary to explore for, drill for, mine, extract, remove and dispose
of all the leased resource in a leasehold.” 43 C.F.R. § 3101.1-2. The Secretary of the
Interior has the authority to cancel leases that have been “improperly issued.” 43 C.F.R.
§ 3108.3(d).
The third phase occurs when the lessee applies for a permit to drill or develop
the lease. 43 C.F.R. § 3162.3-1(c). At this stage, BLM may condition approval of the
permit (referred to as an application for permit to drill, or “APD”) on the lessees’
adoption of “reasonable measures” whose scope is delimited by the lease and the
lessees’ surface use rights. 43 C.F.R. § 3101.1-2.
III. THE DENVER NONATTAINMENT AREA, COLORADO SIP REQUIREMENTS, AND OZONE PRECURSOR EMISSIONS FROM OIL AND GAS ACTIVITY EPA initially designated the Denver Nonattainment Area in November 2007 after
the region violated the 1997 ozone NAAQS. See 40 C.F.R. § 81.306. The Denver
Nonattainment Area includes the Denver Metro Area and the Northern Front Range
region, including much of Larimer and Weld Counties. According to State and federal
regulations, all of Weld County south of 40 degrees, 42 minutes, 47.1 seconds north
11
latitude, which generally includes all of Weld County south of the town of Nunn, is within
the designated nonattainment area. Id.; 5 CCR-1001-14 § III.M;1 and figure below.2
1 This provision of the Code of Colorado Regulations is available at http://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=7005&fileName=5%20CCR%201001-14 (last visited July 28, 2017). 2 Denver Metropolitan/North Front Range 8-hour ozone NAAQS nonattainment area, available online at https://www.colorado.gov/pacific/sites/default/files/AP_PO_ozone-nonattainment-area-map.pdf (last visited July 28, 2017). The Court may take judicial notice of this report under Federal Rule of Evidence 201. See New Mexico ex rel. Richardson, 565 F.3d 683, 702 n.21-22 (10th Cir. 2009) (taking judicial notice of information on agency websites).
12
In 2012, EPA designated this same region as nonattainment over violations of
the 2008 ozone NAAQS. 77 Fed. Reg. 30,088, 30,110 (May 21, 2012). In 2016, EPA
reclassified the Denver Nonattainment Area as a “moderate” nonattainment area due to
the failure of the region to attain the 2008 ozone NAAQS by 2015. 81 Fed. Reg. 26,697,
26,714 (May 4, 2016). EPA’s reclassification to “moderate” bumped up the Denver
Nonattainment Area so that the State of Colorado is now required to revise its SIP and
impose more stringent emission reductions in order to restore healthy air in accordance
with the Clean Air Act. EPA will not approve a new SIP until 2018.
In November 1999, EPA approved a revision to the Colorado SIP that
incorporated by reference the Clean Air Act’s General Conformity Rule. 64 Fed. Reg.
63,206 (Nov. 19, 1999). This action made the federal conformity requirement part of the
Colorado Air Quality Control Commission regulations. See 5 CCR-1001-12, Part A.3
Therefore, Colorado’s SIP includes the regulatory structure that prohibits a federal
agency from undertaking any activity in a nonattainment area that does not conform to
an applicable SIP. 5 CCR 1001-12, Part A; 40 C.F.R. § 93.150(a).
Oil and gas development has been identified as a significant source of the ozone
precursor emissions VOCs and NOx in the Denver Nonattainment Area. Recent
inventories show that within the Area, stationary sources of air pollution related to oil
and gas development operations release more than 50 percent of all VOC emissions
and 30 percent of all NOx emissions in the Denver Nonattainment Area.4 The State of
3 This provision of the Code of Colorado Regulations is available at http://www.sos.state.co.us/CCR/GenerateRulePdf.do?ruleVersionId=6679&fileName=5%20CCR%201001-12 (last visited July 28, 2017). 4 See State of Colorado, “Moderate Area Ozone SIP for the Denver Metro and North Front Range Nonattainment Area” at ES-3, available at https://raqc.egnyte.com/dl/q5zyuX9QC1/FinalModerateOzoneSIP_2016-11-29.pdf_ (last
13
Colorado estimates that by 2017 stationary sources of air pollution associated with oil
and gas development will release 44 percent of all VOC emissions and 28 percent of all
NOx emissions in the Denver Nonattainment Area. Id.
IV. BLM’S 2015 OIL AND GAS LEASE SALES IN THE DENVER NONATTAINMENT AREA On May 15, 2015, BLM sold 73 oil and gas leases in the Royal Gorge Field
Office. Of these leases, 31 are located within the Denver Nonattainment Area.5 On
November 12, 2015, BLM sold 106 oil and gas leases in the Royal Gorge Field Office.
Of these lease, 36 are located within the Denver Nonattainment Area.6
In the Environmental Assessments (“EAs”) for the May and November 2015
lease sales, BLM acknowledged that leases included in the sales were within the
Denver Nonattainment Area. BLM00003908 (May 2015 EA), BLM00007750 (November
2015 EA). BLM also recognized that, as a federal agency, it “must demonstrate that it
has complied with the requirements of the General Conformity Rule.” BLM00003911,
BLM00007751. However, in both EAs BLM ultimately concluded that it was not required
to make conformity determinations for leasing authorizations within the Denver
Nonattainment Area. BLM00003916, BLM00007755. In both EAs, BLM provided the
following justifications for its conclusions: “[l]easing does not authorize emissions
generating activities, and therefore does not directly result in an emissions increase”;
onshore lease sales are the same as Outer Continental Shelf lease sales, which are
expressly exempt from conformity analysis; emissions from the leasing were not
visited July 28, 2017). 5 See Exhibit A attached to the Petition for Review (Dkt. 1) for a list of lease parcels from the May 2015 lease sale that are located in the Denver Nonattainment Area. 6 See Exhibit B attached to the Petition for Review for a list of parcels from the November 2015 lease sale that are located in the Denver Nonattainment Area.
14
“reasonably foreseeable”; and that the Clean Air Act new source review program
exemption would likely apply to several features of any subsequent development.
BLM00003916-17, BLM00007755-56.
Guardians filed timely protests of each lease sale on March 16, 2015, and
September 11, 2015, respectively. BLM00000765, BLM00005537. In each protest,
Guardians alleged that BLM had specifically failed to demonstrate compliance with the
Clean Air Act’s general conformity requirements, and provided detailed responses to
BLM’s arguments as to why the agency was not required to make a conformity
determination for each lease sale. BLM00000775-79, BLM00005547-51. Guardians
also raised conformity issues in its comment letters for both Leasing EAs.
BLM00000616-20, BLM00005351-55.
On May 13, 2015, BLM dismissed Guardians’ protest of the May 2015 lease sale.
BLM00000750-60. On November 12, 2015, BLM dismissed Guardians protest of the
November 2015 lease sale. BLM00005357-62. In the May 2015 dismissal decision,
BLM reiterated its justifications from the Leasing EAs for not doing a conformity analysis
for leases within the Denver Nonattainment Area that were included in the May 2015
sale. BLM00000755-56. BLM did not address conformity in the November 2015
dismissal decision.
On May 14, 2015, BLM sold 73 oil and gas lease parcels in the Royal Gorge
Field Office, including 31 leases in the Denver Nonattainment Area. BLM00001843.
These 31 leases total 10,973.608 acres. BLM issued all of these leases between June 3
and June 30, 2015. On November 12, 2015, BLM sold 106 oil and gas lease parcels in
the Royal Gorge Field Office, including 36 leases in the Denver Nonattainment Area.
15
These 36 leases total 25,258.71 acres. BLM issued all of these leases on December 15,
2015.
STANDARD OF REVIEW
Courts review agency compliance with the Clean Air Act’s conformity
requirement pursuant to the Administrative Procedure Act (“APA”). People of the State
of Calif. ex rel. Imperial County Air Pollution Control Dist. v. U.S. Dept. of the Interior,
767 F.3d 781, 791-92 (9th Cir. 2014); City of Olmsted Falls v. FAA, 292 F.3d 261, 269
(D.C. Cir. 2002); Conservation Law Found. v. Busey, 79 F.3d 1250, 1257-60 (1st Cir.
1996). The APA provides that a “reviewing court shall … hold unlawful and set aside
agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). Arbitrary
and capricious review requires a court to “determine whether the agency considered all
relevant factors and whether there has been a clear error of judgment.” Olenhouse v.
Commodity Credit Corp., 42 F.3d 1560, 1574 (10th Cir. 1994). Accordingly, agency
action will be set aside if:
the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.
Motor Vehicle Mfrs. v. State Farm, 463 U.S. 29, 43 (1983). A reviewing court may not
“supply a reasoned basis for the agency’s action that the agency itself has not given.”
Id. (citing SEC v. Chenery Corp., 332 U.S. 194, 196 (1947)). Instead, “[a]n agency’s
action must be upheld, if at all, on the basis articulated by the agency itself.” Id. at 50.
Though this standard of review is ultimately narrow and agency action is “entitled to a
16
presumption of regularity,” review must nevertheless be “searching and careful,” and
“thorough, probing, and in-depth.” Citizens to Preserve Overton Park, Inc. v. Volpe, 401
U.S. 402, 415-16 (1971).
ARGUMENT
I. GUARDIANS HAS STANDING
Guardians has standing to bring this action. Standing under Article III of the
Constitution requires a plaintiff to show: (1) an “injury in fact” due to defendants’
allegedly illegal conduct, (2) which can fairly be traced to the challenged conduct of the
defendants, and (3) which can be redressed by a favorable decision. Defenders of
Wildlife v. Gutierrez, 532 F.3d 913, 923-924 (D.C. Cir. 2008); Friends of the Earth v.
Laidlaw, 528 U.S. 167, 180-81 (2000). Guardians has standing as an organization
because: its member Mr. Nichols has standing to sue in his own right; the interests at
stake are germane to Guardians’ purpose; and neither the claim asserted, nor the relief
sought requires Mr. Nichols to participate directly in this lawsuit. Hunt v. Washington
State Apple Advertising Comm’n, 432 U.S. 333, 343 (1977). “[E]nvironmental plaintiffs
adequately allege injury in fact when they aver that they use the affected area and are
persons ‘for whom the aesthetic and recreational values of the area will be lessened’ by
the challenged activity.” Laidlaw, 528 U.S. at 183 (citations omitted). Actual
environmental harm from complained-of activity need not be shown, as “reasonable
concerns” that harm will occur are enough. Id.
Here, Guardians meets this standard. Guardians’ members are directly harmed from
BLM’s unlawful authorizations of two lease sales in the Denver Nonattainment Area and
issuance of the subject oil and gas leases. Guardians’ members have extensively
17
visited and recreated in the proximity of the lease tracts, and they have plans to
continue to do so regularly. Nichols Declaration ¶ 24 (Exhibit 1). On such visits,
Guardians’ members have enjoyed the aesthetic and recreational qualities of public
lands in the Pawnee National Grassland National Grassland by hiking and appreciating
the area’s remoteness and open skies, and by viewing wildlife. Nichols Decl. ¶¶ 16-18.
Guardians’ members have observed the effects of existing oil and gas development
already occurring around the challenged leases, including drilling rigs spewing exhaust,
the smell of oil in the air, endless truck traffic, haze and dust, and air pollution from
engines and flaring. Nichols Decl. ¶¶ 19-21. Development of the challenged leases will
degrade the air quality, scenic beauty, and solitude in the areas used by Guardians’
members, and result in harm to the landscapes, resources, and wildlife enjoyed and
visited by Guardians’ members, ultimately reducing their enjoyment of these areas and
likelihood of returning in the future. Nichols Decl. ¶ 19.
Guardians’ members’ injuries can be traced to BLM’s leasing authorizations. Lease
development will degrade local air quality by producing air pollution from engines and
other sources. Nichols Decl. ¶¶ 19, 22.
Guardians’ injuries would be redressed by a favorable result in this suit because
BLM would then be made to properly analyze conformity. This analysis could lead to a
denial of some or all of the leases in the Denver Nonattainment Area, or to modifications
that would lessen ozone impacts and emissions. See Lujan v. Defenders of Wildlife, 504
U.S. 555, 572-73 n.7 (1992); Lemon v. Geren, 514 F.3d 1312, 1315 (D.C. Cir. 2008)
(“[I]f the agency’s eyes are open to the environmental consequences of its actions . . . it
may be persuaded to alter what it proposed.”).
18
II. BLM ARBITRARILY DETERMINED THAT IT DID NOT NEED TO MAKE CONFORMITY DETERMINATIONS FOR ITS LEASING DECISIONS Resolution of this case turns on whether emissions from oil and gas development
on federal leases within the Denver Nonattainment Area are reasonably foreseeable at
the leasing stage. BLM is required to perform a conformity determination when it
proposes an action in a nonattainment area “where the total of direct and indirect
emissions of the criteria pollutant . . . caused by a Federal action” will exceed 100 tons
per year (“tpy”) of ozone as measured using the ozone precursors NOx and VOCs. 40
C.F.R. § 93.153(b)(1) (emphasis added). Direct emissions “occur at the same time and
place as the action and are reasonably foreseeable.” 40 C.F.R. § 93.152. Indirect
emissions “occur at a different time or place as the action; are reasonably foreseeable;”
subject to the agency’s control; and “[f]or which the agency has continuing
responsibility.” Id. Although the act of authorizing leases for sale does not cause direct
emissions as these emissions are defined in the General Conformity Rule, lease sale
authorizations indirectly cause emissions that occur at a different time from the act of
authorization, i.e., when the leases are developed.
It is undisputed that BLM can control indirect emissions at the leasing stage, and
retains continuing control over lease emissions at the subsequent permitting stage. BLM
can completely avoid indirect emissions by deciding not to authorize nominated leases
for sale. See, e.g., McDonald v. Clark, 771 F.2d 460, 463 (10th Cir. 1985) (recognizing
that the Secretary of the Interior’s authority to authorize oil and gas leases under the
Mineral Leasing Act “is discretionary rather than mandatory”); Pease v. Udall, 332 F.2d
62 (9th Cir.) (accord). BLM can also include lease stipulations that require limits on
emissions. 43 C.F.R. § 3101.1-3 (authority to impose lease stipulations). The agency
19
has continuing program responsibility for lease emissions through subsequent
permitting actions at the APD stage, where BLM may condition the approval of the APD
on the lessees’ adoption of “reasonable measures” whose scope is delimited by the
lease and the lessees’ surface use rights. 43 C.F.R. §§ 3101.1-2, 3162.3-1(c). In the
Preamble to the General Conformity Rule, EPA determined that, in the leasing context,
“[w]here the Federal agency has the authority to impose lease conditions controlling
future activities on the leased Federal land, these emissions must be analyzed in the
conformity determination.” 58 Fed. Reg. 63,214, 63,223 (Nov. 30, 1993).
BLM recognizes that its 2015 May and November leasing decisions are subject
to the Clean Air Act’s conformity requirement because both decisions authorize leases
that are within the Denver Nonattainment Area and will result in indirect emissions.
BLM00003908-11, BLM00003914; BLM00007750-51, BLM00007753. Despite this
acknowledgment, the agency does not perform a conformity analysis or make a
conformity determination for either leasing decision. Instead, BLM proffers several
excuses as to why its leasing decisions are not subject to the conformity requirement,
all of which rely on the false premise that development-stage emissions are not
“reasonable foreseeable” because they are not quantifiable at the leasing stage.
BLM00003916-17, BLM00007755-56. All of these excuses lack merit either because
they incorrectly interpret the General Conformity Rule or the excuses are not applicable
to leasing decisions. Therefore, BLM’s decisions to forgo conformity analyses for both of
the challenged leasing authorizations are arbitrary.
20
A. BLM’s Leasing Decisions Indirectly Result in Ozone Precursor Emissions That Exceed 100 TPY. A conformity determination is not required for federal actions that do not produce
direct or indirect emissions exceeding 100 tpy of ozone precursors. 40 C.F.R. §
93.153(b)(1). Although BLM did not estimate NOx and VOC emission levels from leases
within the Denver Nonattainment Area for each of the challenged lease sales either
through a Clean Air Act conformity determination or as part of the National
Environmental Policy Act (“NEPA”) analysis in the Leasing EAs, the record shows that
BLM has the data to make these estimates and that indirect emissions from its leasing
authorizations exceed the 100 tpy threshold. To meet the requirements of a settlement
agreement between Guardians and BLM in a previous lawsuit, in 2013 BLM created an
Oil and Gas Air Emissions Inventory Report predicting future oil and gas air emissions
for seven lease parcels within the Denver Nonattainment Area. See BLM00003332-
3404. The Emissions Report projects the number of wells for each of the seven lease
parcels for high and low development scenarios for the years 2011-2030, and per-well
emission levels for ten different air pollutants, including NOx and VOCs. BLM00003338
(well estimates per parcel), 3340 (per-well emissions estimates). The report relies on
projected oil and gas development scenarios analyzed in a 2012 RFDS for the Royal
Gorge Field Office. BLM00003338.
According to the Emissions Report, one oil well would result in 21.75 tpy of NOx
and 21.72 tpy of VOCs. BLM00003340. One natural gas well would result in 15.73 tpy
of NOx and 34.06 tpy of VOCs. Id. The Emissions Report predicts minimum emissions
levels for each lease using these figures based on the minimum one well per lease
requirement. BLM00003338.
21
BLM’s May 2015 lease sale included 31 leases located within the Denver
Nonattainment Area. Assuming one well per lease, the lease sale would, at a minimum,
result in 31 new wells. Multiplying the per well emissions estimates for NOx and VOCs
from the Emissions Report by 31 new wells results in: (1) 674.25 tpy of NOx and 673.32
tpy of VOCs for oil wells, and (2) 487.63 tpy of NOx and 1,055.86 tpy of VOCs for gas
wells. Accordingly, estimated NOx and VOC emissions from the May 2015 lease sale
exceed the Clean Air Act’s 100 tpy emission threshold for a conformity determination.
BLM’s November 2015 lease sale included 36 leases located within the Denver
Nonattainment Area. Assuming one well per lease, the lease sale would, at a minimum,
result in 36 new wells. Multiplying the per well emissions estimates for NOx and VOCs
from the Emissions Report by 36 new wells results in: (1) 783 tpy of NOx and 781.92
tpy of VOCs for oil wells, and (2) 566.28 tpy of NOx and 1,226.16 tpy of VOCs for gas
wells. As is the case for the May 2015 lease sale, estimated NOx and VOC emissions
from the November 2015 lease sale exceed the Clean Air Act’s 100 tpy emission
threshold for a conformity determination.
These emissions estimates, using BLM’s own data, demonstrate that indirect
emissions from each of the challenged leasing authorizations exceeds the 100 tpy
threshold for triggering a conformity determination. BLM did not even attempt to use its
own data to assess whether emissions from lease development within the Denver
Nonattainment Area would exceed the conformity threshold. Instead, BLM cherry-picked
through the General Conformity Rule for exemptions into which it could shoe-horn its
leasing authorizations to defer conformity analysis to the stage where the agency
22
approves permits for individual wells.7 In so doing, BLM has “entirely failed to consider
an important aspect of the problem” and “offered an explanation that runs counter to the
evidence before the agency,” that should result in the lease sale authorizations being
set aside as arbitrary. Motor Vehicle Mfrs., 463 U.S. at 43.
B. Future Indirect Emissions from BLM’s Leasing Decisions are Reasonably Foreseeable. Although BLM has data available to it that it could use to determine whether each
of the challenged leasing authorizations met the threshold for a conformity
determination and to perform a conformity analysis for each lease sale, the agency
instead attempts to defer this analysis to a subsequent stage in the oil and gas
development process by claiming that indirect emissions from leasing are not
“reasonably foreseeable.” BLM00003916, BLM00007755. BLM argues emissions are
not reasonably foreseeable because the agency cannot specifically identify, at the
leasing stage, the timing or pace of drilling, what equipment will be used/excluded as
subject to New Source Review permitting, what type of drilling would occur (oil or gas),
and what production rates might be. BLM00004054-55, BLM00007871. However, the
record demonstrates that these uncertainties do not preclude BLM from making the
requisite conformity determination for each lease sale because BLM does not need this
type of information to estimate future emissions from lease development.
EPA regulations define “reasonably foreseeable” emissions as projected future
direct and indirect emissions that are:
7 BLM has taken the opposite tack in Wyoming’s Upper Green River Basin ozone nonattainment area where the agency is seeking to have oil and gas wells exempt from the conformity requirement by designating wells to the “presumed to conform” to the State Implementation Plan based on emissions from a single well. 81 Fed. Reg. 96,033 (Dec. 29, 2016).
23
(1) identified at the time the conformity determination is made; (2) the location of such emissions is known; and (3) the emissions are quantifiable as described and documented by the Federal agency based on its own information and after reviewing any information presented to the Federal agency.
40 C.F.R. § 93.152. All of this information is available to BLM at the leasing stage. First,
BLM acknowledges that “any future development of the leases will result in emissions of
criteria, [hazardous air pollutants], and [greenhouse gas] pollutants. BLM00003914,
BLM00007753. Second, BLM is aware of “the location of such emissions” because each
lease sale authorization includes the specific locations of leases in the sale. See
BLM00003977-87 (May 2015 lease parcel legal descriptions), 4033-48 (lease parcel
maps); BLM00007807-25 (November 2015 lease parcel legal descriptions), 7857-65
(lease parcel maps). Regardless of when the leases in each sale are developed, BLM
knows that (1) the lease sales will result in ozone precursor emissions and (2) the
locations of those emissions sources within the Denver Nonattainment Area. Therefore,
lease sale emissions are reasonably foreseeable under the first two prongs of EPA’s
definition.
The third prong of the “reasonably foreseeable” definition—that project emissions
be quantifiable—is the basis for BLM’s refusal to perform a conformity analysis at the
leasing stage. However, the emissions from each lease sale are quantifiable using data
already available to BLM and in some cases specifically generated for BLM’s use in
analyzing air quality impacts from lease sales. The Emissions Report discussed in the
previous section, and produced for BLM, is one source of information that provides per-
well emissions estimates for all phases of oil and gas development. BLM00003340. The
24
Emissions Report also provides a methodology for predicting the maximum number of
wells for individual lease parcels:
To determine the potential maximum wells developed for each lease parcel, the area of each parcel in acres was divided by the average acres disturbed for each well. If the result was greater than the maximum wells per Township, the potential maximum was set to the maximum wells per Township; otherwise, the result was used.
BLM00003338. BLM could have used this method to estimate minimum and maximum
lease sale emissions for conformity purposes, contradicting the agency’s assertion that
emissions from the leasing decisions are not reasonably foreseeable.
Although BLM chose not to use the Emissions Report in either of the Leasing
EAs, it did rely on two other documents predicting future emissions related to oil and
gas development in the Royal Gorge Field Office that would have allowed the agency to
quantify reasonably foreseeable lease sale emissions for a conformity determination.
These documents include the Colorado Air Resource Management Modeling Study
(“CAARMS”), and the 2012 Reasonable Foreseeable Development Scenario for Oil and
Gas in the Royal Gorge Field Office (“RFDS”).
The RFDS does not predict or model emissions; rather, it predicts “reasonably
foreseeable” minimum and maximum oil and gas development scenarios for the Royal
Gorge Field Office over the next 20 years. See BLM00009558-645. The RFDS divides
the Royal Gorge Field Office into eight different categories of oil and gas development
potential based on the number of wells per township that any given area could support.
Id. at BLM00009584. This system allows BLM to estimate the number of future wells in
the Royal Gorge Planning Area with what the agency demonstrates is a high level of
precision—12,355 wells over the next 20 years. Id. at BLM00009585. BLM is then able
25
to break down its estimate for the number of future wells inside and outside of the
nonattainment area. Id. at BLM00009586. The RFDS provides a similar breakdown of
future wells for BLM and Forest Service lands. Id. at BLM00009586-87. In addition to
estimating the number of future wells, the RFDS also estimates specific production
numbers for future oil and gas wells in the Planning Area. Id. at BLM00009642-43.
BLM has used this data to project reasonably foreseeable future NOx and VOC
emissions through the CARMMS report. BLM00009111-12. Yet BLM offers no
reasonable explanation as to why indirect emissions for all oil and gas development in
the Royal Gorge Field Office are reasonably foreseeable, but indirect emissions for the
2015 May and November leasing authorizations are not. The record shows that BLM
can quantify emissions. In this case, however, it simply seems that the agency did not
like the results. Because BLM’s explanation for its conclusion that indirect emissions
from oil and gas development are not reasonably foreseeable at the leasing stage “runs
counter to the evidence before the agency,” BLM’s leasing authorizations should be set
aside. Motor Vehicle Mfrs., 463 U.S. at 43.
The Ninth Circuit has considered what constitutes reasonably foreseeable
indirect emissions for conformity purposes, although neither case is directly on point
here. In South Coast Air Quality Mgmt. Dist. v. F.E.R.C., 621 F.3d 1085, 1100-01 (9th
Cir. 2010), the court determined that indirect emissions from gas combustion were not
reasonably foreseeable for conformity purposes where FERC did not retain “continuing
program responsibility” over the burning of gas subject to conditions imposed by FERC,
and the amount of gas transported by the pipeline at issue was unknown. In Calif. ex
rel. Imperial County Air Pollution Control Dist., 767 F.3d at 799, the court determined
26
that indirect emissions from change in a water delivery point were not reasonably
foreseeable because the emissions were not “practicably controlled” by the Secretary of
the Interior. Although the Secretary approved the change in the delivery point, “Imperial
Irrigation, not the Secretary, ultimately controls the allocation of water that it receives.”
Id. In both cases, the determinative factor was whether the emissions subject to a
conformity analysis were subject to the agency’s control within the meaning of 40 C.F.R.
§ 93.152, and in both cases the court found this condition was not met. As discussed
above, here BLM has continuing control over emissions from oil and gas development
at the subsequent permitting stage, and can impose conditions of approval on
development activities. 43 C.F.R. § § 3101.1-2, 3162.3-1(c).
C. The Exemption for Initial Outer Continental Shelf Lease Sales is Inapplicable to BLM’s Onshore Lease Sales. BLM attempts to avoid making conformity determinations for the lease sales by
claiming these actions are “analogous to” Initial Outer Continental Shelf (“OCS”) lease
sales. BLM00003917, BLM00007755. EPA explicitly exempted OCS lease sales from
the conformity requirement because emissions from this type of action are not
reasonably foreseeable, given that OCS lease sales “are made on a broad scale and
are followed by exploration and development plans on a project level.” 40 C.F.R. §
93.153(c)(3)(i). The only support BLM provides for its argument that this exemption
shields the lease sale authorizations at issue here is that “development of an onshore
lease requires subsequent BLM review and NEPA analysis of a specific development
proposal.” BLM00003917, BLM00007755. BLM interprets this regulatory exemption too
broadly. BLM should not be afforded deference in interpreting EPA’s regulations. See
South Coast Air Quality Mgmt. Dist. v. F.E.R.C., 621 F.3d 1085, 1099 (9th Cir. 2010)
27
(recognizing that “[b]ecause the EPA, not FERC, is the agency charged with
administering the [Clean Air Act], FERC's legal interpretations of the Act are reviewed
de novo.”).
When it promulgated the General Conformity Rule, EPA sought to clarify the
definition of “reasonably foreseeable emissions” by “list[ing] certain Federal actions that
are not considered reasonably foreseeable . . . and, therefore, exempt from conformity
requirements.” 58 Fed. Reg. at 63,226. EPA included “Program Level Leasing Actions”
in this list and explained that:
In actions such as outer continental shelf lease sales, it will be difficult or impossible to locate and quantify emissions early in the Federal agency review process. Thus, the emissions may not be reasonably foreseeable. Further, a conformity review is unnecessary at that time since the Federal agency must take future actions related to the lease sales which are subject to conformity review. That is, the exploration and development actions at the project level would be subject to conformity review prior to any action that would actually result in emissions. In such cases, the EPA believes that a conformity review is not required prior to project level analysis.
Id. Here, EPA is distinguishing between “program” and “project” level actions related to
the multi-stage leasing process for federal minerals. This distinction is carried through to
the regulatory language exempting OCS leasing actions: “Initial Outer Continental Shelf
lease sales which are made on a broad scale and are followed by exploration and
development plans on a project level.” 40 C.F.R. § 93.153(c)(3)(i). EPA’s discussion in
the Preamble, and the subsequent incorporation of the program-project distinction into
the regulation demonstrate that EPA intended the exemption to apply only to the
planning stage of federal leasing programs.
Even if the OCS exemption arguably can be extended by analogy to BLM’s
onshore leasing program, it is only applicable at the first stage of the onshore program,
28
i.e., the planning stage where the agency prepares an RMP that determines which
lands will be open to oil and gas leasing and under what conditions. See 43 C.F.R. §
1601.0-5 (describing components of a resource management plan). RMP-stage
onshore leasing decisions are made on the “broad scale” contemplated by the OCS
exemption, and are followed by “project level” decisions regarding specific parcels that
BLM will offer for sale at the subsequent leasing stage. The OCS program has a similar
multi-stage process where the first two stages are analogous to the first two stages of
BLM’s onshore leasing program. See Ctr. for Biol. Diversity v. U.S. Dept. of the Interior,
563 F.3d 466, 473 (D.C. Cir. 2009) (describing the four-stage OCS Program). The Court
analogized the first stage of the OCS program to the first stage of BLM’s onshore
leasing program “that involved only ‘the identification and mapping of areas that might
be suitable for leasing.’” Id. at 480. (quoting Wyoming Outdoor Council v. U.S. Forest
Service, 165 F.3d 43, 45 (D.C. Cir. 1999)). Given that EPA exempted program-level
leasing actions from conformity analysis because these are not “action[s] that would
actually result in emissions,” the OCS exemption cannot be extended to the leasing
stage where lease issuance will result in reasonably foreseeable emissions. See 43
C.F.R. § 3101.1-2 (recognizing that once leases are issued, the lessee has the
exclusive right to “use so much of the leased lands as is necessary to explore for, drill
for, mine, extract, remove and dispose of all the leased resource in a leasehold”).
D. The NSR Permit Exemption Does Not Apply to Lease Sale Authorizations. BLM’s final attempt to avoid making conformity determinations for the lease sales
is based on the New Source Review (“NSR”) permit exemption at 40 C.F.R. §
93.153(d)(1), which states:
29
Notwithstanding the other requirements of this subpart, a conformity determination is not required for the following Federal actions (or portion thereof): (1) The portion of an action that includes major or minor new or modified stationary sources that require a permit under the new source review (NSR) program (Section 110(a)(2)(c) and Section 173 of the Act) or the prevention of significant deterioration program (title I, part C of the Act).
EPA added this exemption because actions subject to NSR permitting “undergo
procedures and criteria, including air quality analyses, equivalent to those required by
the conformity rule.” 58 Fed. Reg. 63,230. The purpose is clearly to avoid duplicative air
quality analyses where analyses conducted for permitting “are adequate for purposes of
conformity.” Id. at 63,229.
BLM invokes this exemption on the possibility that certain development facilities
“such as tanks, separates, compressions engines, pump jacks, and dehydration units”
may require a minor source permit. BLM00003917, BLM00007756. Nevertheless, there
are a whole host of pollutant emitting activities that are exempt from NSR requirements
under the Colorado State Implementation Plan including mobile sources, fugitive
emissions, and activities that individually emit at low levels. 5 CCR-1001-58
(unnumbered pages 63-66 list exemptions). BLM does not identify these sources of
emissions or otherwise explain why a conformity determination is not required in light of
the fact that its decisions at the lease sale stage will authorize actions that will not be
subject to permitting.
CONCLUSION
For the foregoing reasons, Guardians respectfully asks the Court to declare
BLM’s authorizations of the 2015 May and November lease sales, and issuance of the
8 This provision of the Code of Colorado Regulations is available at https://www.colorado.gov/pacific/sites/default/files/5-CCR-1001-5.pdf (last visited July 28, 2017).
30
leases pursuant thereto, arbitrary; vacate and remand BLM’s lease authorizations; and
order BLM to demonstrate conformity with the Colorado SIP if the agency decides to
resell or reissue the leases in the challenged authorizations.
Respectfully submitted on this 31st day of July 2017,
/s/ Samantha Ruscavage-Barz /s/ Stuart Wilcox WildEarth Guardians WildEarth Guardians 516 Alto Street 2590 Walnut St. Santa Fe, NM 87501 Denver, CO 80205 (505) 401-4180 (720) 331-0385 [email protected] [email protected]
Attorneys for Petitioner WildEarth Guardians
CERTIFICATE OF WORD LIMIT COMPLIANCE
Pursuant to the Court’s Order on the Joint Case Management Plan (Dkt. 9), I hereby certify that this Opening Brief contains 8,191 words. I relied on my word processing program, Microsoft Word, to obtain this word count. /s/ Samantha Ruscavage-Barz
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing Opening Brief and attached exhibit are being filed with the Clerk of the Court using the CM/ECF system, thereby serving it on all parties of record, this 31st day of July, 2017.
/s/ Samantha Ruscavage-Barz
