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ORAL ARGUMENT NOT YET SCHEDULED
IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 12-1431
CENTER FOR SUSTAINABLE ECONOMY,
Petitioner,
v.
SALLY JEWELL, Secretary of the Interior, and BUREAU OF OCEAN ENERGY MANAGEMENT,
Respondents,
AMERICAN PETROLEUM INSTITUTE, et al., Intervenors.
Petition for Review of Final Administrative Action of the Department of the Interior, Bureau of Ocean Energy Management
REPLY BRIEF FOR PETITIONER
Michael A. Livermore Steven Sugarman INSTITUTE FOR POLICY INTEGRITY 347 County Road 55A 139 MacDougal Street, Wilf Hall Room 319 Cerrillos, NM 87010 New York, NY 10012 (505) 672-5082 (212) 992-8932 [email protected] [email protected]
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TABLE OF CONTENTS
TABLE OF AUTHORITIES ................................................................................... iii
GLOSSARY OF ACRONYMS AND ABBREVIATIONS ..................................... v
SUMMARY OF ARGUMENT ................................................................................. 1
ARGUMENT ............................................................................................................. 2
I. CSE HAS STANDING TO CHALLENGE THE PROGRAM ........................ 2
A. CSE Has Representational Standing ............................................................ 2
1. CSE Is a Traditional Membership Organization Capable of Asserting Representational Standing on Behalf of Members ........................................ 2
2. CSE’s Members Have Standing to Challenge the Program ..................... 4
3. The Interests CSE Seeks to Protect Are Germane to Its Organizational Purpose ........................................................................................................... 7
B. CSE Has Organizational Standing ............................................................... 9
II. THE PROGRAM VIOLATES OCSLA ........................................................... 9
A. Interior’s Irrational Allocation of Environmental Costs Defeats the Required “Equitable Sharing” and “Relative Environmental Sensitivity” Analyses ............................................................................................................. 9
B. Interior Cannot Defer Assessment of Coastal Impacts Until Subsequent OCSLA stages .................................................................................................. 13
C. Interior Fails to Account for the Significant Pool of Undeveloped Leases on the OCS ....................................................................................................... 17
D. Interior’s Irrational Assumption of “100% Domestic Consumption” Precludes the Required Consideration of Statutory Factors ............................ 17
E. Interior Violated OCSLA by Failing to Adequately Consider the Informational Value of Delay .......................................................................... 19
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III. INTERIOR’S NEPA ANALYSIS IS INHERENTLY BIASED AGAINST THE NO ACTION ALTERNATIVE .................................................................. 27
CERTIFICATE OF COMPLIANCE WITH WORD LIMITATION ..................... 32
ADDENDUM OF STATUTES & REGULATIONS
CERTIFICATE OF SERVICE
iii
TABLE OF AUTHORITIES
Cases
Am. Legal Found. v. FCC, 808 F.2d 84 (D.C. Cir. 1987) .....................................2, 3 *California ex rel. Brown v. Watt (“Watt I”), 668 F.2d 1290 (D.C. Cir. 1981) 1, 10,
11, 12, 14, 15, 25, 27 California ex rel. Brown v. Watt (“Watt II”), 712 F.2d 584 (D.C. Cir. 1983) ........ 20 Canadian Ass’n of Petroleum Producers v. FERC, 254 F.3d 289 (D.C. Cir. 2001)
............................................................................................................................... 21 *Center for Biological Diversity v. U.S. Dept. of the Interior (“CBD”), 563 F.3d
466 (D.C. Cir. 2009) .......................................................................... 1, 4, 6, 16, 19 Citizens Against Burlington, Inc. v. Busey, 938 F.2d 190 (D.C. Cir. 1991) ............ 27 City of Brookings Mun. Tel. Co. v. FCC, 822 F.2d 1153 (D.C. Cir. 1987) ............. 21 City of Dania Beach, Fla. v. FAA, 485 F.3d 1181 (D.C. Cir. 2007) ......................... 6 City of Los Angeles v. Lyons, 461 U.S. 95 (1983) ..................................................... 6 Coalition for Mercury-Free Drugs v. Sebelius, 671 F.3d 1275 (D.C. Cir. 2012) ..... 6 Disability Advocates, Inc. v. N.Y. Coal. for Quality Assisted Living, Inc., 675 F.3d
149 (2d Cir. 2012) ................................................................................................... 3 Fair Emp’t Council of Wash., Inc. v. BMC Mktg. Corp., 28 F.3d 1268 (D.C. Cir.
1994) ....................................................................................................................... 9 Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658 (D.C. Cir. 1996) (en banc) ................. 6 Fund Democracy, LLC v. SEC, 278 F.3d 21 (D.C. Cir. 2002) .................................. 3 Havens Realty Corp. v. Coleman, 455 U.S. 363 (1982) ............................................ 9 Humane Soc’y of the U.S. v. Hodel, 840 F.2d 45 (D.C. Cir. 1998) ........................... 8 Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333 (1977) ..... 2 James Madison Ltd. by Hecht v. Ludwig, 82 F.3d 1085 (D.C Cir. 1996) ............... 23 Montgomery Envtl. Coal. v. Costle, 646 F.2d 568 (D.C. Cir. 1980) ......................... 5 Nat’l Wildlife Fed’n v. Burford, 835 F.2d 305 (D.C. Cir. 1987) ............................... 4 *Natural Res. Def. Council, Inc. v. Hodel, 865 F.2d 288 (D.C. Cir. 1988) 14, 16, 18 Sierra Club v. EPA, 292 F.3d 895 (D.C. Cir. 2002) .................................................. 3 Sierra Club v. Sigler, 695 F.2d 957 (5th Cir. 1983) ................................................ 29 U.S. Telecom Ass’n v. FCC, 359 F.3d 554 (D.C. Cir. 2004) ..................................... 3 WildEarth Guardians v. Jewell, 738 F.3d 298 (D.C. Cir. 2013) ...........................4, 6
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Statutes
42 U.S.C. §§ 4321–4370h .......................................................................................... 1 *43 U.S.C. § 1344 ...................................................................................................... 1 *43 U.S.C. § 1344(a) ............................................................................................... 19 *43 U.S.C. § 1344(a)(1) .................................................................................... 20, 27 *43 U.S.C. § 1344(a)(2)(B) .......................................................................... 9, 12, 16 *43 U.S.C. § 1344(a)(2)(C) ..................................................................................... 19 *43 U.S.C. § 1344(a)(2)(D) ..................................................................................... 27 *43 U.S.C. § 1344(a)(2)(G) ....................................................................................... 9 *43 U.S.C. § 1344(a)(3) ........................................................................................... 16 43 U.S.C. § 1349(c)(5) ...................................................................................... 17, 22
Regulations
40 C.F.R. § 1502.14 .......................................................................................... 27, 28
Other Authorities
46 Fed. Reg. 18,026 (Mar. 23, 1981) ....................................................................... 30 Anthony C. Fisher, Investment under Uncertainty and Option Value in
Environmental Economics, 22 Res. & Energy Econ. 197 (2000) ........................ 22 Iulie Aslaksen & Terje Synnestvedt, Are the Dixit-Pindyck and the Arrow-Fisher-
Henry-Hanemann Option Values Equivalent? (Statistics Norway, Discussion Paper No. 390, 2004) ............................................................................................ 22
Jon M. Conrad & Koji Kotani, When to Drill? Trigger Prices for the Arctic National Wildlife Refuge, 27 Res. & Energy Econ. 273 (2005) ........................... 23
W. Michael Hanemann, Information and the Concept of Option Value, 16 J. Envtl. Econ. & Mgmt. 23 (1989) ..................................................................................... 22
* Indicates sources on which brief chiefly relies
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GLOSSARY OF ACRONYMS AND ABBREVIATIONS
Pursuant to Circuit Rule 28(a)(3), the following is a glossary of acronyms
and abbreviations used in this brief:
BBOE: Billion Barrels of Oil Equivalent
BOEM: Bureau of Ocean Energy Management
CSE: Center for Sustainable Economy
EAM: Economic Analysis Methodology
EIS: Environmental Impact Statement
JA: Joint Appendix
NEPA: National Environmental Policy Act
NSO: No Sale Option
OCS: Outer Continental Shelf
OCSLA: Outer Continental Shelf Lands Act
OECM: Offshore Environmental Cost Model
PEIS: Programmatic Environmental Impact Statement
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SUMMARY OF ARGUMENT
Petitioner Center for Sustainable Economy (“CSE”) demonstrates that
Respondents (“Interior”) violated Section 18 of the Outer Continental Shelf Lands
Act (“OCSLA”), 43 U.S.C. § 1344, and the National Environmental Policy Act
(“NEPA”), 42 U.S.C. §§ 4321–4370h, in developing the 2012-2017 Oil and Gas
Leasing Program (“Program”). Specifically, CSE shows that Interior failed to
consider required statutory factors, failed to quantify relevant environmental
benefits and costs when required, and made irrational assumptions that biased its
analysis. Consequently, Interior adopted an arbitrary and capricious Program,
which this Court must remand. See Center for Biological Diversity v. U.S. Dept. of
the Interior (“CBD”), 563 F.3d 466, 489 (D.C. Cir. 2009) (vacating Program for
failure to consider all Section 18(a)(2) factors and the “derivative failure to strike a
proper balance” under Section 18(a)(3)); California ex rel. Brown v. Watt (“Watt
I”), 668 F.2d 1290, 1301-02, 1325-26 (D.C. Cir. 1981) (applying “searching
scrutiny” to the rationality of policy judgments, and remanding Program for
inadequate analysis and failure “to quantify environmental costs to the extent they
are quantifiable”).
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ARGUMENT
I. CSE HAS STANDING TO CHALLENGE THE PROGRAM
A. CSE Has Representational Standing
Despite Interior’s and Intervenors’ contrary arguments, CSE has established:
(1) it is a traditional membership organization, (2) its members have individual
standing to challenge the Program, and (3) its litigation goals are germane to its
organizational purpose. Accordingly, CSE has representational standing to bring
OCSLA and NEPA claims against the Program.
1. CSE Is a Traditional Membership Organization Capable of Asserting Representational Standing on Behalf of Members
Interior contends that CSE cannot assert representational standing under the
Supreme Court’s decision in Hunt v. Washington State Apple Advertising
Commission, 432 U.S. 333 (1977). Hunt, however, is inapplicable, because it
concerned an organization without members asserting representational standing.
Unlike the plaintiff in Hunt, CSE is not merely “the functional equivalent of a
traditional membership organization.” Am. Legal Found. v. FCC, 808 F.2d 84, 90
(D.C. Cir. 1987) (emphasis added). Instead, CSE is a traditional membership
organization.1 See Talberth 3d Decl. ¶ 4 (“CSE . . . has maintained itself as a
1 Intervenors’ claim that CSE’s docketing statement did not specifically identify its members, Intervenors’ Br. 10-11, is insufficient to defeat CSE’s representational standing. CSE properly raised representational standing in response to Intervenors’ motion to dismiss. See Sierra Club v. EPA, 292 F.3d 895,
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membership organization. CSE’s Bylaws and directives . . . include membership
categories that have been maintained over the years . . . .”).
Interior does not cite, and CSE is unaware of, any case requiring traditional
membership organizations like CSE to satisfy the Hunt criteria. Both this Court
and other circuits have explicitly characterized those criteria as applicable only to
“entities that are not voluntary membership organizations.” See U.S. Telecom Ass’n
v. FCC, 359 F.3d 554, 593-94 (D.C. Cir. 2004) (emphasis added); Fund
Democracy, LLC v. SEC, 278 F.3d 21, 25-26 (D.C. Cir. 2002); see also, e.g.,
Disability Advocates, Inc. v. N.Y. Coal. for Quality Assisted Living, Inc., 675 F.3d
149, 159 (2d Cir. 2012) (“Hunt held that . . . a non-membership organization
[must] manifest the ‘indicia of membership’ . . . to have associational
standing . . . .” (emphasis added)).
Even if Hunt applied, CSE would have representational standing to
challenge the Program because it engages a “discrete, stable group of persons with
a definable set of common interests.” Am. Legal Found., 808 F.2d at 90. CSE’s
members share the core mission of promoting the transition to renewable energy,
in part by limiting unnecessary offshore fossil fuel extractions. Talberth 3d Decl.
¶ 6; Wilson 2d Decl. ¶ 2; Shavelson 2d Decl. ¶ 2. CSE’s members actively guide
900 (D.C. Cir. 2002) (noting that “the first appropriate point in the review proceeding” to establish standing may be “in response to a motion to dismiss”).
4
the organization’s activities to support this common goal. Talberth 3d Decl. ¶ 5
(noting that “active” members “participat[e] in the projects and programs [that
CSE] operate[s]”); Shavelson 2d Decl. ¶ 2 (discussing participation in “several”
CSE projects challenging fossil fuel development in Alaska).
2. CSE’s Members Have Standing to Challenge the Program
Intervenors argue that CSE’s members have not sufficiently alleged injuries
caused by the Program, because they do not demonstrate geographic proximity to
all leasing areas, allege future harms, or differentiate harms associated with new
federal leases from those associated with existing state leases. Intervenors’ Br. 12-
18. None of these criticisms is valid.
First, CSE’s members need not allege injuries in each leasing area to
challenge the Program as a whole. See CBD, 563 F.3d at 475, 479 (holding
petitioners’ recreational injuries in Alaska created sufficient standing to bring
various OCSLA and NEPA claims challenging the entire “irrationally based
Leasing Program”); see also Nat’l Wildlife Fed’n v. Burford, 835 F.2d 305, 314
(D.C. Cir. 1987) (“If the organization can establish that the Department’s actions
as to one parcel of land are unlawful because the procedure . . . fails to comply
with [the statute], then it has established the illegality as to all the lands at
issue . . . .”); WildEarth Guardians v. Jewell, 738 F.3d 298, 306 (D.C. Cir. 2013)
(plaintiffs who “established standing to challenge the adequacy of [a NEPA
5
document] on at least one ground . . . are entitled to raise other inadequacies”
(quotations omitted)).
Furthermore, Intervenors’ focus on geographic proximity as the
“touchstone” for injury-in-fact, Intervenors’ Br. 13, is inappropriate in the marine
context, where harms spread far from their source. For example, even if no new
leasing occurred in the Western Gulf, ocean currents would still carry oil spilled in
the Eastern Gulf to affect Western resources. See Final Programmatic
Environmental Impact Statement (“Final PEIS”) at 4-597, JA___. Birds and
marine species essential to CSE members’ recreational and commercial interests
migrate through multiple, interconnected ecosystems. E.g., compare id. at 3-155,
JA___ (explaining that salmon’s range includes the Chukchi and Beaufort Seas)
with Shavelson 2d Decl. ¶ 5 (detailing plans to fish salmon in Cook Inlet); see also
Wilson 2d Decl. ¶¶ 3, 19, 23 (describing the Gulf’s interconnected ecosystems and
the migratory birds and marine species essential to her recreation and commercial
activities). Interior even acknowledges that “adverse environmental effects [may
occur] outside of particular program areas where leasing occurs.” Resp’ts Br. 29-
30 & n.6; see also Montgomery Envtl. Coal. v. Costle, 646 F.2d 568, 578 (D.C.
Cir. 1980) (explaining how pollutants discharged into upstream tributaries injured
residents in Maryland, Virginia, and D.C., “by whose shores the Potomac River
flows”).
6
Equally erroneous is Intervenors’ contention that CSE lacks standing to seek
injunctive relief because its members reference past harms. In fact, as Intervenors’
primary citation confirms, allegations of past harm are relevant when petitioners
also establish a “‘real and immediate threat’ that the harm-producing conduct will
recur.” Coalition for Mercury-Free Drugs v. Sebelius, 671 F.3d 1275, 1280 (D.C.
Cir. 2012) (quoting City of Los Angeles v. Lyons, 461 U.S. 95, 105 (1983)).
Similarly, petitioners have standing to challenge agency actions that exacerbate
past harms. See City of Dania Beach, Fla. v. FAA, 485 F.3d 1181, 1186 (D.C. Cir.
2007) (finding sufficient procedural injury because agency authorization to
increase runway use would make petitioners “even more susceptible to these
injuries in the future”); WildEarth Guardians, 738 F.3d at 306 (finding sufficient
procedural injury because Interior’s expansion of coal leases would harm
petitioners “by the increase in local air, water and land pollution”).2
CSE’s members have shown that the Program both will cause their past
harms to imminently recur, worsen, or increase, and will cause new, comparable
2 Furthermore, because CSE’s members allege procedural injuries, “the primary focus of the standing inquiry is not the imminence or redressability of the injury . . ., but whether a plaintiff who has suffered personal and particularized injury has sued a defendant who has caused that injury.” Fla. Audubon Soc’y v. Bentsen, 94 F.3d 658, 664 (D.C. Cir. 1996) (en banc); see also CBD, 563 F.3d at 479 (finding procedural standing to challenge Interior’s “adoption of an irrationally based” Program). Regardless, CSE’s members have adequately shown that the Program substantially increases risk of imminent harm and that vacating the Program will provide redress.
7
injuries. E.g., Wilson 2d Decl. ¶¶ 15-16 (explaining how multiple new lease sales
will “increase” water pollution and disturbances that injure her economic
interests); id. ¶ 17 (averring that new leases will increase catastrophic risks); id. ¶¶
22-23 (detailing new threats posed by Lease Sale 229 to recreational interests in
Matagorda Bay); Shavelson 2d Decl. ¶¶ 7, 10 & 13 (noting that the Program will
expand onshore infrastructure and associated injuries); id. ¶¶ 8-9, 11 (explaining
how future lease sales “will worsen” water pollution and cause new harms by
triggering surveys, drilling, and discharges).
Finally, CSE’s members have demonstrated harms attributable to Interior’s
Program, distinct from state leasing programs. Even if the Court determines, for
example, that Texas has exclusive jurisdiction over oil and gas development
approximately 10.35 miles offshore in the Gulf of Mexico, see Intervenors’ Br. 15,
the harms to CSE’s members extend beyond this region, including up to “9 to 200
nautical miles offshore.” See Wilson 2d Decl. ¶¶ 3, 15-16, 23; see also Shavelson
2d Decl. ¶¶ 9, 13 (discussing how the Program will “exacerbate . . . harms . . . [in
areas] within and bordering the areas in Lease Sale 244”).
3. The Interests CSE Seeks to Protect Are Germane to Its Organizational Purpose
To satisfy the “germaneness” requirement of representational standing, an
organization need only demonstrate that its litigation goals are “pertinent to its
special expertise and the grounds that bring its membership together.” Humane
8
Soc’y of the U.S. v. Hodel, 840 F.2d 45, 56 (D.C. Cir. 1998). CSE easily clears this
“modest” hurdle. Id.
Interior mischaracterizes CSE’s aim as simply “promot[ing] greater use of
certain types of economic analysis.” Resp’ts Br. 24. CSE and its members’ actual
objective is promoting a sustainable economy; advocating for better cost-benefit
analysis is just one means to that end, as is litigation. Talberth 3d Decl. ¶ 6. The
specific goal of this litigation—ensuring that new offshore leasing is authorized
only if absolutely necessary, economically justified, and safe, Wilson 2d Decl. ¶ 2;
Shavelson 2d Decl. ¶ 2—is unquestionably pertinent to CSE’s core organizational
mission of “speeding the transition to a sustainable economy” and “to a renewable
energy platform.” Talberth 3d Decl. ¶ 6.
Interior also underestimates CSE’s relevant expertise. Resp’ts Br. 23. CSE
offers its members expertise on whether agency decisions rationally evaluate
natural resource uses and benefits, Talberth 3d Decl. ¶ 3, and CSE specifically has
experience evaluating the economics of coastal ecosystems, water pollution,
aquaculture, biodiversity, fossil fuel extractions, and Alaskan infrastructure, see
CSE, Partners and Clients, http://sustainable-economy.org/partners-and-clients
(last visited March 20, 2014).
9
B. CSE Has Organizational Standing
Interior erroneously argues that CSE has shown no “direct hindrance of its
ability to fulfill its mission.” Resp’ts Br. 18. CSE’s “key activities,” however,
include providing consulting services on the application of economic analysis to
NEPA reviews. Talberth 3d Decl. ¶¶ 9, 15. Interior’s failure to provide the
Programmatic Environmental Impact Statement’s cost-benefit analysis for public
comment “undermine[s] the substantial time and resources CSE has spent
developing its consulting services,” id. ¶ 14, and “reduce[s] the effectiveness” of
these activities, Fair Emp’t Council of Wash., Inc. v. BMC Mktg. Corp., 28 F.3d
1268, 1276 (D.C. Cir. 1994). This direct harm is sufficient for organizational
standing. Havens Realty Corp. v. Coleman, 455 U.S. 363, 379 (1982); see also
CSE Br. 22-23.
II. THE PROGRAM VIOLATES OCSLA
A. Interior’s Irrational Allocation of Environmental Costs Distorts the Required “Equitable Sharing” and “Relative Environmental Sensitivity” Analyses
One principle animating Section 18 is Congress’s determination that outer
continental shelf (“OCS”) resources be developed in a manner reflecting an
“equitable sharing of developmental benefits and environmental risks among the
various regions,” accounting for each region’s “relative environmental sensitivity.”
43 U.S.C. §§ 1344(a)(2)(B), (G). To achieve this result at the program stage,
10
Interior must assess the various OCS regions’ unique resources, relative
sensitivities, and susceptibilities to environmental risks. Watt I, 668 F.2d at 1307-
08. A program that fails to account for all these factors will not be sustained by this
Court. Id.
In this case, Interior allocated the environmental costs associated with the
No Sale Option (“NSO”) alternative amongst the various OCS areas in an entirely
irrational fashion: to OCS areas where they will not occur. Interior thereby
distorted the required inter-area analysis of relative benefits and risks and impaired
its ability to strike an appropriate “equitable balance.” Interior asserts that “for
every program area the environmental and social costs of relying on the substitute
sources of energy [under the] No Sale option are equal to or greater than these
costs from producing area resources.”3 Program 125, JA___. This fundamentally
flawed assertion—which is at the core of the Program’s logic—is premised entirely
on Interior’s arbitrary allocation of NSO environmental costs.
Interior’s irrational approach reaches its apogee in connection with Alaska’s
planning areas, where NSO environmental risks are de minimis or entirely absent.
3 According to Interior, choosing the NSO alternative for any OCS area will result in domestic demand for energy substitutes to replace fuel that would otherwise have been produced, and those “[r]eplacement energy sources [will] generate [environmental and social] costs from added risk of oil spills and additional air emissions with increased tanker imports as well as with additional air emissions resulting from increased onshore production of oil, natural gas, and other energy sources such as coal.” Program 125, JA___.
11
For example, Interior admits that “NSO impacts listed for the Chukchi Sea would
not actually occur in the Chukchi Sea, but rather along the contiguous U.S. coasts
and onshore in places of oil, gas, or coal production.” Final Economic Analysis
Methodology (“Final EAM”) 20, JA___. In other words, it is impossible for NSO
costs to outweigh production costs in the Chukchi area, because there are no NSO
costs for the Chukchi area. This critical fact is turned on its head by Interior’s
irrational NSO cost allocation.
Undoubtedly, Interior could allocate NSO costs in a manner that more
closely tracks reality. By default, Interior’s Revised Offshore Environmental Cost
Model (“OECM”)—which generates the data used in the inter-area risk analysis—
rationally allocates NSO costs associated with increased risk of import tanker spills
in proportion to “the average annual fraction of total crude oil tanker trips that
arrive at ports in each of the planning areas.” OECM 7, JA___. However, Interior
overrode the model’s rational default mode and forced the model to irrationally
allocate NSO costs associated with import tanker spills to OCS areas where such
spills will not occur.
In Watt I, this Court held that Interior bears an “especially heavy” burden to
justify departures from the required Section 18 analysis when it decides that “it [is]
impossible or impracticable or simply not useful to perform.” 668 F.2d at 1312.
Interior has not carried that heavy burden here. To defend its irrational NSO cost
12
allocation, Interior states that “it would be impossible” to report actual NSO costs
“in a simple table.” Program 125 n.71, JA___. However, Watt I clarified that
administrative convenience does not trump statutory requirements. 668 F.2d at
1307-08. A table reflecting a rational NSO cost allocation might be less “simple”
than the fallacious table incorporated into the Program, but it would be reality-
based.
Attempting to justify its irrational NSO cost allocation, Interior claims that it
“considered the overall balance of benefits and costs from a national perspective.”
Resp’ts Br. 28-29. This facile explanation misses the mark, as it disregards the core
function of Section 18’s inter-area analysis, which is to provide “a clearer picture
of the overall balance of benefits and costs tied to the program-area-by-program-
area decision as to whether to offer the area for leasing” and “to help the Secretary
select decision options for each program area.” Program 118, 125 n.71, JA___,
___. Interior undermined these purposes by irrationally forcing its economic model
to attribute NSO environmental costs to OCS areas where they will not occur.
Interior admits that “developing substitute sources of oil and gas will
adversely affect parts of the United States outside a program area where leasing is
foregone,” and that “those impacts must be considered if Interior is to develop ‘an
equitable sharing of developmental benefits and environmental risks among the
various regions.’” Resp’ts Br. 30-31 (citing 43 U.S.C. § 1344(a)(2)(B)). However,
13
in this case Interior did not consider the actual NSO impacts outside of program
areas. Instead, it irrationally allocated NSO environmental costs to OCS program
areas where they will not occur, thereby defeating the purpose of Section 18’s
inter-area analysis and impairing Interior’s ability to assure the “equitable sharing”
required by OCSLA.4
B. Interior Cannot Defer Assessment of Coastal Impacts Until Subsequent OCSLA Stages
Interior acknowledges that coastal impacts of OCS energy development are
significant. With respect to Alaska’s planning areas—where onshore infrastructure
is non-existent or immature—the Program states that impacts from routine OCS
operations in coastal zones, like pipeline and road construction, “could include
elimination of wetland habitat” and “could have a major effect on the local
indigenous residents.” Program 66, 72; Final PEIS 4-792, JA___, ___, ___. Interior
must weigh these adverse coastal impacts in striking the required Section 18(a)(3)
balance.5 Nonetheless, Interior deferred consideration of these potentially major
4 CSE does not argue that Interior should “ignore the full [NSO] costs likely to result,” as Interior suggests. Resp’ts Br. 31. Rather, CSE argues those costs should be allocated in a rational manner reflecting reality and actual environmental risks.
5 Interior’s assertion that CSE did not raise this issue in administrative proceedings is incorrect, as CSE specifically addressed Interior’s failure to account for loss of “service values” associated with “terrestrial ecosystems” generally, and for infrastructure-related “loss and degradation of coastal wetlands” in particular. R. No. 3284 at 16-17, JA___-___.
14
coastal impacts until subsequent OCSLA stages, stating that such impacts “do not
merit assessment” at the program stage. OECM 95, JA___. This Court has held
that deferring relevant environmental concerns until subsequent OCSLA phases is
impermissible. Watt I, 668 F.2d at 1317 (explaining that, at the program stage
“[t]he obligation . . . is to look at all factors and then balance the results,” and
“consideration of environmental damage” may not be “postponed or foregone”). It
is undisputed that Interior has models capable of quantifying coastal impacts at the
program stage. Interior used these models in previous Program iterations. Natural
Res. Def. Council, Inc. v. Hodel, 865 F.2d 288, 311 (D.C. Cir. 1988) (valuing
wetlands lost to OCS-related infrastructure at $20,898/acre). Because coastal
impacts are “not inherently insusceptible of quantitative analysis,” they must be
quantified and weighed in striking the Section 18(a)(3) balance. Watt I, 668 F.2d at
1319.
Interior responds that it would be “difficult and speculative” to assess the
adverse impact of Program-related coastal development at this time. Resp’ts. Br.
35-36. This argument rings hollow, as the Record shows that Interior did estimate
the extent—though not the associated impact or cost—of coastal infrastructure
development required for Program implementation. Final PEIS 4-657-58, JA___-
___ (projecting the number of miles of new onshore pipelines and landings
required for Program implementation). While “[l]ack of information, lack of time,
15
and methodological imperfections all may make the consideration [of expected
adverse impacts] highly speculative,” Congress accommodated this uncertainty by
requiring Interior to conduct its analysis “based upon the ‘best information’
available.” Watt I, 668 F.2d at 1313.
Interior further argues that it did consider and address concerns regarding
coastal impacts of routine OCS operations. Resp’ts Br. 33. But even if it were
permissible to forego quantification of easily quantifiable impacts—which is not
the case—Interior cannot point to any substantive consideration of the issue.
Interior’s references to the so-called consideration direct the Court to nothing more
than a concession that routine OCS activities will have coastal impacts and a
catalogue of National Parks and Wildlife Refuges subject to adverse impacts.
Notably, the cited passages lack any qualitative or quantitative discussion of
coastal impacts projected to result from Program implementation in various OCS
areas, let alone any discussion of relative risks of coastal damage in those areas.
Additionally, Interior argues that it was reasonable to conclude that coastal
impacts would “likely” be mitigated. Resp’ts Br. 35. While CSE agrees that
potential mitigation efforts are relevant, Interior failed to address the varying
extent to which coastal impacts are amenable to mitigation in different OCS areas,
16
as well as the cost of this mitigation.6 Obviously, mitigation will be effective only
to a certain degree and carries costs that will be borne either by industry (i.e.,
private costs relevant to Interior’s Net Economic Value calculation) or by the
public (i.e., public costs relevant to Interior’s Net Social Value calculation). Either
way, Interior ignored the costs of the contemplated mitigation. Hodel, 865 F.2d at
311 (“[I]t would be irrational to ignore mitigation costs.”).
Finally, Interior argues that it may “utilize simplifying assumptions” in its
Section 18 analysis. Resp’ts Br. 35. However, Interior lacks “carte blanche to
wholly disregard a statutory requirement out of convenience.” CBD, 563 F.3d at
279. Section 18 expressly requires Interior to weigh “the potential for adverse
impact on the coastal zone” in determining an appropriate equitable sharing of
benefits and risks amongst the nation’s OCS regions. 43 U.S.C. §§ 1344(a)(2)(B),
(a)(3). Here, Interior’s determination that coastal impacts “do not merit
assessment” at the program stage is clearly at odds with express statutory
requirements.
6 Interior admits that “[s]pecific mitigation measures . . . will be developed at the lease sale stage and in subsequent development activities.” Final PEIS 8-48, JA___. Thus, Interior’s unsubstantiated suggestion of complete mitigation is entirely speculative at this time.
17
C. Interior Fails to Account for the Significant Pool of Undeveloped OCS Leases
Interior incorrectly asserts that the issue of undeveloped leases was not
raised during the Program’s administrative proceedings. In fact, Oceana submitted
this issue to Interior in public comments. R. No. 3336 at App.A-6, JA___.
Accordingly, the Court may adjudicate this issue on its merits. 43 U.S.C.
§ 1349(c)(5).
D. Interior’s Irrational Assumption of 100% Domestic Consumption Precludes the Required Consideration of Statutory Factors
Interior does not dispute CSE’s core factual assertion: the United States is
increasingly a net exporter of both refined and raw energy products, to the extent
that it is possible that 100% of the OCS energy products produced on Program-
authorized leases will be exported. This fact notwithstanding, Interior’s Program
analysis is premised on the irrational assumption that all OCS-derived energy
products will be consumed domestically.
Interior insists that it did not assume 100% domestic consumption, Resp’ts
Br. 42-43, but the assumption is plainly evident in Interior’s economic analysis.
Interior projects that production from Program-authorized leases will be 5.75
Billion Barrels of Oil Equivalent (“BBOE”) at the low-price scenario and 14.30
BBOE at the high-price scenario. Program 121, JA___. Interior also projects that
the amount of substitute energy required if the Program deferred all additional
18
OCS leasing (the NSO alternative) would be 5.73 BBOE at the low-price scenario
and 14.22 BBOE at the high-price scenario. Final PEIS 4-644, JA___. The
equivalence7 in the projected production amounts and the projected NSO
substitution amounts reflects the irrational assumption that all OCS energy
production will be consumed domestically.
In Hodel, this Court found that a 100% domestic consumption “assumption
is a rough estimation that would prove wrong . . . to the extent that some of the
OCS production is exported.” 865 F.2d at 309. The specific assumptions at issue in
Hodel were that all OCS energy is consumed domestically and that every barrel of
OCS oil “will ‘back-out’ foreign oil barrel for barrel, thus reducing oil spill costs”
associated with tanker imports. Id. (citations omitted). Interior’s economic analysis
now accounts for the fact that not all of the “backed-out” energy products will be
imported, and that a portion will be substituted by domestic onshore production
and conservation. Resp’ts Br. 44. However, Interior continues to rely on the core
assumption of 100% domestic consumption at issue in Hodel, despite the country’s
current status as a net exporter of energy. As Hodel makes clear, that assumption
“prove[s] wrong” when “some of the OCS production is exported.” 865 F.2d at
309.
7 The small numerical divergence is due to rounding.
19
The irrational 100% domestic consumption assumption is the product of an
unreasonably cramped analysis, as Interior disavows any obligation to “consider
consumption patterns, including whether OCS energy production is consumed
domestically or not.”8 Resp’ts Br. 39-40. Interior’s admitted failure to “consider
consumption patterns”—and, specifically, to consider what fraction of energy
produced on Program-authorized leases will be consumed domestically—precludes
any rational analysis of important statutory factors: whether the Program “will best
meet national energy needs” and be configured to reflect “the relative needs of[]
regional and national energy markets.” 43 U.S.C. §§ 1344(a), (a)(2)(C). Interior’s
irrational assumption of 100% domestic consumption also results in over-
estimation of the substitution costs associated with the NSO alternative, such as
tanker import spills.
E. Interior Fails to Adequately Consider the Informational Value of Delay
The informational value of delay (also known as “options value”) is a
relevant statutory factor, CSE Br. 47-48, and Interior “does not have carte blanche
to wholly disregard a statutory requirement out of convenience,” CBD, 563 F.3d at
488. But rather than “measur[e] the value of delay,” Interior claims that it
“considered the value of delay . . . qualitatively.” Resp’ts Br. 48. This “qualitative
8 Contrary to Interior’s assertion, CSE does not argue that Interior should have considered the environmental impacts of “downstream” consumption.
20
assessment” was legally insufficient, and Interior arbitrarily biased its Section 18
analysis and abdicated its responsibility to consider “economic, social, and
environmental values,” 43 U.S.C. § 1344(a)(1), by failing to use—or even properly
consider—alternative existing methodologies for quantitatively estimating and
comparing the environmental options values of various OCS areas during the
program stage.
To defend its “qualitative assessment,” Interior asserts unlimited discretion
to eschew quantifying costs and benefits, Resp’ts Br. 48-49, and insists that “there
is no established methodology” to quantify environmental options value, id. at 49-
50. Both claims are incorrect.
To support its first claim, Interior quotes California ex rel. Brown v. Watt
(“Watt II”):
The Secretary did not base his entire section 18(a)(3) analysis on the cost benefit analysis. Instead, he considered the quantifiable costs in the cost benefit analysis and then later considered costs which he determined could not be quantified.
Resp’ts Br. 49 (quoting 712 F.2d 584, 603 (D.C. Cir. 1983)). That language is
inapposite to this case because Interior never explains or cites any
“determin[ation]” that environmental options value “could not be quantified.”
Interior does not enjoy unbounded discretion to select a “qualitative
assessment.” Interior may be permitted to determine that certain factors cannot be
quantified, as in Watt II. But no such rational explanation was ever offered for
21
rejecting CSE’s proposed methodological alternative of quantitative options
analysis. “It is well settled that an agency has a duty to consider responsible
alternatives to its chosen policy and to give a reasoned explanation for its rejection
of such alternatives.” City of Brookings Mun. Tel. Co. v. FCC, 822 F.2d 1153,
1169 (D.C. Cir. 1987) (finding agency action arbitrary and capricious for failure to
consider methodological alternatives suggested by public comments) (quotations
omitted); see also Canadian Ass’n of Petroleum Producers v. FERC, 254 F.3d 289,
298-99 (D.C. Cir. 2001) (reversing and remanding agency’s methodological
decision because it “fail[ed] to respond meaningfully” to a proposed alternative).
Interior attempts to remedy this failure by asserting that “there is no
established methodology for making [options value] determinations regarding
environmental and social impacts.” Resp’ts Br. 50. Not only are post hoc
rationalizations impermissible, City of Brookings Mun. Tel. Co., 822 F.2d at 1170,
but this claim is flatly contradicted by the robust economic literature presented to
Interior through public comments.
CSE’s comments directly referenced Michael Livermore’s work
synthesizing the options value literature as applied to offshore leases. R. No. 3284
at 11 n.46, JA___ (CSE’s comments, citing Livermore’s work published by Policy
Integrity); see also R. Nos. 3324, 3325 & 3469 (Policy Integrity comments and
Interior e-mail attaching Michael A. Livermore, Patience is an Economic Virtue:
22
Real Options, Natural Resources, and Offshore Oil (Policy Integrity Discussion
Paper No. 2012/1, 2012) [hereinafter “Livermore”]), JA___, ___&___. Livermore
at 13-14 explains:
A model that specifically focuses on the value of waiting to gain greater information about environmental costs was developed by Arrow, Fisher, Hanemann, and Henry (“the AFHH formula”). This model, sometimes referred to as quasi-options, has key similarities to the real options formulation, and seeks to correct an anti-preservation bias in decisionmaking based on models that do not take into account the possibility of increasing knowledge about the natural world and the environmental effects of development.
JA___-___. That passage cites the following three articles, all widely available:
Anthony C. Fisher, Investment under Uncertainty and Option Value in Environmental Economics, 22 Res. & Energy Econ. 197 (2000);
W. Michael Hanemann, Information and the Concept of Option Value, 16 J. Envtl. Econ. & Mgmt. 23 (1989);
Iulie Aslaksen & Terje Synnestvedt, Are the Dixit-Pindyck and the Arrow-Fisher-Henry-Hanemann Option Values Equivalent? (Statistics Norway, Discussion Paper No. 390, 2004).
These and many other articles on options value cited by Livermore do not appear
in the Record, suggesting they were not consulted by Interior.9 This well-
9 Interior states, “Many of the documents relied upon by CSE . . . to support the alleged existence of an established methodology for quantifying option values in this context are not in the record, and hence cannot be considered.” Resp’ts Br. 50 n.10. However, the relevant documents were directly cited by CSE and other public commenters and, as peer-reviewed articles and scholarly books, were widely available to Interior. By directing Interior to easily accessible scholarship, CSE complied with its obligation to place relevant literature before the agency during public comments. See 43 U.S.C. § 1349(c)(5). Not placing these documents
23
established methodology would have allowed Interior to quantitatively estimate
environmental options value and is effectively identical to the methodology used
by Interior (see Resp’ts Br. 50) to account for price uncertainty. Beyond its bare
assertion that no “established methodology” exists to quantify environmental
options value, Interior provides no explanation for disregarding the literature
presented by CSE’s comments and Livermore’s work.
Interior argues there is “no established practice of extending analyses
applicable to oil price uncertainties to the different realm of environmental impact
uncertainties,” noting that the petroleum industry only measures options value
relating to prices. Id. at 49-50. Of course, the fact that industry lacks incentives to
account for environmental costs does not mean Interior should follow suit. CSE Br.
52-53. The framework industry uses to evaluate price uncertainty “is flexible
enough to take into account broader social costs in the oil drilling context.”
Livermore at 22, JA___ (citing Jon M. Conrad & Koji Kotani, When to Drill?
Trigger Prices for the Arctic National Wildlife Refuge, 27 Res. & Energy Econ.
273 (2005)). The fact that expert judgment is required to apply existing economic
in the Record, in fact, demonstrates Interior’s failure to even cursorily examine the viability of methodologies for quantifying environmental options value. See James Madison Ltd. by Hecht v. Ludwig, 82 F.3d 1085, 1095 (D.C Cir. 1996) (noting that courts may supplement the administrative record when an agency “negligently excluded documents that may have been adverse to its decision” or when additional documents are necessary “to determine whether the agency considered all of the relevant factors”).
24
models and existing predictive information10 to Interior’s decision is very different
from lacking any “established methodology.” Agency discretion to “formulate a
solution,” Resp’ts Br. 50, or to evaluate predictive information, Intervenors’ Br.
30, does not include freedom to deny the existence of a decades-old methodology,
which was developed in extensive peer-reviewed literature and was called to
Interior’s attention during public comments.
Finally, Interior’s allegedly “reasonable” “qualitative assessment,” Resp’ts
Br. 49, was arbitrary. Interior gave some delay scenarios cursory consideration in
its environmental impact statement, id. at 45-46, but claims it “concluded generally
that uncertainties at this stage did not warrant foreclosing leasing in program
areas,” particularly in Alaska. Id. at 46. Yet Interior did foreclose all leasing in the
North, Mid-, and South Atlantic areas due to uncertainty over resource potential
and conflicts with other uses. Program 12-13, JA___-___.11 Interior never
explained why resource and use uncertainties justified excluding Atlantic regions,
10 Intervenors mistakenly imply that OCSLA’s call to use “existing information” somehow limits Interior’s responsibility to consider options value. Intervenors’ Br. 30. However, options methodologies would utilize existing projections about uncertain costs and benefits, and OCSLA references “existing information” in only one prong of its multi-factor timing analysis. See CSE Br. 47.
11 Interior also cites local opposition and underdeveloped infrastructure to justify foreclosing leasing in Atlantic areas. Program 12-13, JA___-___. Yet similar arguments exist for Arctic areas. E.g., id. at 8, JA___ (“[I]n the Arctic OCS[,] [l]onger-term planning and infrastructure development are also necessary.”).
25
whereas comparable environmental uncertainties “did not warrant foreclosing
leasing in” Alaska or the Gulf. This failure reveals the arbitrariness of Interior’s
qualitative assessment; estimating and comparing various regions’ options values
would have instead provided a rational basis for selecting areas to exclude from
this Program. See CSE Br. 49-51 (explaining why options value will vary among
OCS areas).
Interior further claims it appropriately considered uncertainty by scheduling
Arctic leases in the Program’s latter years to allow information-gathering. Resp’ts
Br. 46. Yet Interior never explained why comparable environmental and social
uncertainties in Cook Inlet or deepwater Gulf regions did not warrant similar delay.
Cf. Watt I, 668 F.2d at 1314 (explaining that Interior cannot simply “claim[ ] that
timing and location were based on a consideration of . . . benefits and . . . costs,”
but must “indicate how this consideration occurred”). Moreover, the 2016-17 dates
chosen for Alaska do not reflect any evaluation of optimal timing due to Alaska’s
unique uncertainties and options value; rather, those dates were arbitrarily chosen
as simply coinciding with this Program’s end. Interior never considers delaying
energy extraction in those or other OCS areas beyond the Program’s five-year
period, when new information and technology may reveal more favorable cost-
benefit calculations. To the contrary, Interior assumes in its No Sale Option that
100% of the 5.75-14.30 billion barrels of oil that Interior estimates this Program
26
could generate over the next 40 years must be replaced by non-OCS energy
substitutes, Resp’ts Br. 43, ignoring the possibility that future leases in these same
OCS areas could make up some of that 40-years’ worth of production, perhaps at
even greater net benefits.
Interior also claims authorization to defer considering uncertainties and
options value until the leasing stage. Resp’ts Br. 47. Yet OCSLA forbids deferring
analyses that are required at the program stage, especially when the required
analysis cannot be conducted afterwards. For example, considering new
information about uncertain costs and benefits in the Chukchi Sea in isolation at
the leasing stage is no substitute for comparing all the costs and benefits—
including options value—of all OCS areas and their subareas at the program stage.
At the leasing stage, Interior at most could assess whether, in light of new
information, the environmental and social costs of drilling in Chukchi are justified
by the benefits of oil production. However, it will be too late for Interior to assess
whether, in light of current predictive information on uncertainties, the same oil
production benefits could have been obtained more cheaply and at less
environmental risk by leasing different OCS areas. Downgrading relative
environmental considerations into “merely . . . factors which could affect the
precise timing of a sale . . . contradicts the statutory requirement that these
considerations be taken into account at the programmatic stage; otherwise, the
27
requirement that the Secretary select the timing of leasing ‘among the regions’ is
rendered meaningless.” Watt I, 668 F.2d at 1314 (quotation omitted).
III. INTERIOR’S NEPA ANALYSIS IS INHERENTLY BIASED AGAINST THE NO ACTION ALTERNATIVE
Interior mischaracterizes CSE’s argument concerning the biased analysis of
the No Action Alternative, referred to by Interior as the NSO alternative. CSE does
not contend that NEPA requires Interior to quantify all economic benefits of the
NSO alternative as a matter of law. Resp’ts Br. 52-53. Rather, CSE contends that
Interior’s NEPA analysis of various action and NSO alternatives should facilitate
Interior’s compliance with OCSLA’s procedural and substantive requirements. The
scope of NEPA alternatives analysis “should always consider the views of
Congress, expressed . . . in the agency’s statutory authorization to act.” Citizens
Against Burlington, Inc. v. Busey, 938 F.2d 190, 196 (D.C. Cir. 1991); see also 40
C.F.R. § 1502.14 (alternatives analyses are the “heart” of environmental impact
statements). In connection with the Program, the NEPA alternatives analysis must
account for Congress’s Section 18 command that Interior consider the OCS’s
important non-mineral resource values (such as fisheries and recreation) and the
potential for additional oil and gas leasing to conflict with those values. 43 U.S.C.
§§ 1344(a)(1), (a)(2)(D). To do this, Interior must account for mineral and non-
mineral resource values that currently exist on lands and waters assessed in the
Program, even absent additional leasing.
28
To aid in program development, Interior’s NEPA alternatives analysis must
display the relative advantages and disadvantages of each alternative “so that
reviewers may evaluate their comparative merits.” 40 C.F.R. § 1502.14. Here, the
NEPA alternatives analysis should have reflected the significant continuing
economic benefits associated with the NSO alternative—benefits that could be
estimated using the same calculations Interior made in determining NSO costs in
its OECM. For example, in quantifying the costs of the NSO alternative, Interior
calculated “an average value of $14” for a recreational beach visit and an “average
value of $42” for a recreational fishing trip. OECM 11, 12, JA___,___. However,
the NEPA analysis failed to use these same values in describing ongoing mineral
and non-mineral benefits that would continue or even increase under the NSO
alternative.12 Instead of calculating values for the ongoing benefits of the NSO
alternative, Interior assigned zero economic value to the NSO alternative. Interior’s
lopsided analysis is irrational in light of Congress’s instruction to consider both
mineral and non-mineral values, and it violates NEPA.
12 Interior acknowledges that the NSO alternative may, in fact, stimulate additional production from existing OCS leases: “MarketSim does not include estimates of changes in production from existing OCS leases in response to the selection of the No Sale Option for one or more program areas.” Program 124 n.68, JA___. This fact underscores the necessity of quantifying the value of existing economic benefits (both mineral and non-mineral) that flow from the OCS, even absent additional leasing.
29
A review of Interior’s cost-benefit analysis—which is incorporated into the
Final PEIS—reveals the core flaw in Interior’s biased NEPA alternatives analysis.
Interior’s cost-benefit analysis incorporates the environmental costs calculated by
the OECM into the Program’s net benefits calculation.13 Final PEIS 2-24, JA___.
The NEPA alternatives analysis, however, fails to include any quantification of the
ongoing environmental benefits, even for the same resources that are considered in
terms of costs. These benefits include “recreation, air quality, property values,
subsistence harvests, commercial fishing, and ecosystem services.” Final PEIS
2-22, JA___. Interior simply does not account for the significant values associated
with these same resources in its NEPA analysis. This omission is particularly
noteworthy in connection with the NSO alternative because Interior’s failure to
calculate and incorporate the value of existing benefits on the OCS leads to the
irrational conclusion that the OCS currently generates no economic benefit. See
Sierra Club v. Sigler, 695 F.2d 957, 979 (5th Cir. 1983) (invalidating a NEPA
analysis as “a sham” for failure to consider both the costs and the benefits of all
alternatives).
This fundamental flaw also extends to the qualitative discussions of
economic impacts. In the Final PEIS, Interior offers a litany of economic and
13 The environmental costs that Interior does factor into its cost-benefit analysis are the anticipated costs of routine OCS operations and spills under the action alternatives and the NSO alternative costs described above.
30
environmental woes associated with the NSO alternative: increased oil spills, acid
mine drainage, groundwater contamination, diminished air quality, loss of
employment and community cohesion, outmigration, among others. Final PEIS 4-
647-48, JA___-___. On the flip side, Interior is silent with respect to the economic
benefits of the NSO alternative in both quantitative and qualitative terms. Instead,
the various mineral and non-mineral use benefits that Interior quantified in making
the case against the NSO alternative are hidden from view. In essence, the “zero
valuation” that Interior assigns to the NSO alternative is a finger on the scale,
which inevitably tips the balance against that alternative and in favor of leasing.
NEPA alternatives analysis requires comparing a proposed action’s expected
net impacts against the expected net impacts of maintaining the status quo. 46 Fed.
Reg. 18,026, 18,027 (Mar. 23, 1981). Fully describing the status quo (both benefits
and costs) is particularly important in this case, in light of Congress’s expressed
intent that Interior weigh the existing mineral and non-mineral uses of the OCS
during program development.
The economic benefits of the NSO alternative are worth many billions of
dollars each year and include benefits associated with development and production
of existing oil and gas leases, recreational fishing and beach visits, commercial
fishing, tourism and ecosystem services. CSE Br. 8. Yet in Interior’s view, none of
these benefits is worth even a cursory nod in the Final PEIS or cost-benefit
31
analysis, despite the fact that Interior addresses these exact resources when it
calculates the costs associated with the various alternatives. OECM 9, 14, 36, 42,
46, 52, 92, 104, JA___,___,___,___,___,___,___,___. Excluding information about
the NSO alternative’s existing economic benefits skews decisionmaking in favor of
the Program and defeats the purpose of NEPA by precluding full and fair
consideration of the advantages and disadvantages of each alternative in like terms.
DATED: March 21, 2014
Respectfully submitted,
_/s/ Steven Sugarman____________ Steven Sugarman 347 County Road 55A Cerrillos, NM 87010 (505) 672-5082 [email protected] Michael A. Livermore INSTITUTE FOR POLICY INTEGRITY 139 MacDougal Street, Wilf Hall Room 319 New York, NY 10012 (212) 992-8932 [email protected] Attorneys for the Petitioner.
32
CERTIFICATE OF COMPLIANCE WITH WORD LIMITATION
Counsel hereby certifies that, in accordance with Federal Rule of Appellate
Procedure 32(a)(7)(C), the foregoing Reply Brief of Petitioner contains 6,976
words, as counted by counsel’s word processing system, and this complies with the
applicable word limit established by the Court.
DATED: March 21, 2014
_/s/ Steven Sugarman____________ Steven Sugarman 347 County Road 55A Cerrillos, NM 87010 (505) 672-5082 [email protected]
Michael A. Livermore
INSTITUTE FOR POLICY INTEGRITY 139 MacDougal Street, Wilf Hall Room 319
New York, NY 10012 (212) 992-8932
Attorneys for the Petitioner.
STATUTES AND REGULATIONS
TABLE OF CONTENTS
Statutes Page
43 U.S.C. § 1344………………………………………………..ADD1
43 U.S.C. § 1349………………………………………………..ADD4
Regulations
40 C.F.R. § 1502.14…………………………………………….ADD6
43 USC 1344: Outer Continental Shelf leasing programText contains those laws in effect on October 21, 2013
From Title 43-PUBLIC LANDSCHAPTER 29-SUBMERGED LANDSSUBCHAPTER III-OUTER CONTINENTAL SHELF LANDS
Jump To: Source Credit
§1344. Outer Continental Shelf leasing program
(a) Schedule of proposed oil and gas lease sales
The Secretary, pursuant to procedures set forth in subsections (c) and (d) of this section, shall prepare and periodically revise, and maintain an oil and gas leasing program to implement the policies of this subchapter. The leasing program shall consist of a schedule of proposed lease sales indicating, as precisely as possible, the size, timing, and location of leasing activity which he determines will best meet national energy needs for the five-year period following its approval or reapproval. Such leasing program shall be prepared and maintained in a manner consistent with the following principles:
(1) Management of the outer Continental Shelf shall be conducted in a manner which considers economic, social, and environmental values of the renewable and nonrenewable resources contained in the outer Continental Shelf, and the potential impact of oil and gas exploration on other resource values of the outer Continental Shelf and the marine, coastal, and human environments.(2) Timing and location of exploration, development, and production of oil and gas among the oil- and
gas-bearing physiographic regions of the outer Continental Shelf shall be based on a consideration of-(A) existing information concerning the geographical, geological, and ecological characteristics of
such regions;(B) an equitable sharing of developmental benefits and environmental risks among the various
regions;(C) the location of such regions with respect to, and the relative needs of, regional and national
energy markets;(D) the location of such regions with respect to other uses of the sea and seabed, including fisheries,
navigation, existing or proposed sealanes, potential sites of deepwater ports, and other anticipated uses of the resources and space of the outer Continental Shelf;(E) the interest of potential oil and gas producers in the development of oil and gas resources as
indicated by exploration or nomination;(F) laws, goals, and policies of affected States which have been specifically identified by the
Governors of such States as relevant matters for the Secretary's consideration;(G) the relative environmental sensitivity and marine productivity of different areas of the outer
Continental Shelf; and(H) relevant environmental and predictive information for different areas of the outer Continental
Shelf.
(3) The Secretary shall select the timing and location of leasing, to the maximum extent practicable, so as to obtain a proper balance between the potential for environmental damage, the potential for the discovery of oil and gas, and the potential for adverse impact on the coastal zone.(4) Leasing activities shall be conducted to assure receipt of fair market value for the lands leased and
the rights conveyed by the Federal Government.
(b) Estimates of appropriations and staff required for management of leasing program
The leasing program shall include estimates of the appropriations and staff required to-(1) obtain resource information and any other information needed to prepare the leasing program
required by this section;(2) analyze and interpret the exploratory data and any other information which may be compiled under
the authority of this subchapter;(3) conduct environmental studies and prepare any environmental impact statement required in
accordance with this subchapter and with section 4332(2)(C) of title 42; and(4) supervise operations conducted pursuant to each lease in the manner necessary to assure due
diligence in the exploration and development of the lease area and compliance with the requirements of applicable law and regulations, and with the terms of the lease.
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(c) Suggestions from Federal agencies and affected State and local governments; submission of proposed program to Governors of affected States and Congress; publication in Federal Register
(1) During the preparation of any proposed leasing program under this section, the Secretary shall invite and consider suggestions for such program from any interested Federal agency, including the Attorney General, in consultation with the Federal Trade Commission, and from the Governor of any State which may become an affected State under such proposed program. The Secretary may also invite or consider any suggestions from the executive of any affected local government in such an affected State, which have been previously submitted to the Governor of such State, and from any other person.(2) After such preparation and at least sixty days prior to publication of a proposed leasing program in the
Federal Register pursuant to paragraph (3) of this subsection, the Secretary shall submit a copy of such proposed program to the Governor of each affected State for review and comment. The Governor may solicit comments from those executives of local governments in his State which he, in his discretion, determines will be affected by the proposed program. If any comment by such Governor is received by the Secretary at least fifteen days prior to submission to the Congress pursuant to such paragraph (3) and includes a request for any modification of such proposed program, the Secretary shall reply in writing, granting or denying such request in whole or in part, or granting such request in such modified form as the Secretary considers appropriate, and stating his reasons therefor. All such correspondence between the Secretary and the Governor of any affected State, together with any additional information and data relating thereto, shall accompany such proposed program when it is submitted to the Congress.(3) Within nine months after September 18, 1978, the Secretary shall submit a proposed leasing program
to the Congress, the Attorney General, and the Governors of affected States, and shall publish such proposed program in the Federal Register. Each Governor shall, upon request, submit a copy of the proposed leasing program to the executive of any local government affected by the proposed program.
(d) Comments by Attorney General on anticipated effect on competition; comments by State or local governments; submission of program to President and Congress; issuance of leases in accordance with program
(1) Within ninety days after the date of publication of a proposed leasing program, the Attorney General may, after consultation with the Federal Trade Commission, submit comments on the anticipated effects of such proposed program upon competition. Any State, local government, or other person may submit comments and recommendations as to any aspect of such proposed program.(2) At least sixty days prior to approving a proposed leasing program, the Secretary shall submit it to the
President and the Congress, together with any comments received. Such submission shall indicate why any specific recommendation of the Attorney General or a State or local government was not accepted.(3) After the leasing program has been approved by the Secretary, or after eighteen months following
September 18, 1978, whichever first occurs, no lease shall be issued unless it is for an area included in the approved leasing program and unless it contains provisions consistent with the approved leasing program, except that leasing shall be permitted to continue until such program is approved and for so long thereafter as such program is under judicial or administrative review pursuant to the provisions of this subchapter.
(e) Review, revision, and reapproval of program
The Secretary shall review the leasing program approved under this section at least once each year. He may revise and reapprove such program, at any time, and such revision and reapproval, except in the case of a revision which is not significant, shall be in the same manner as originally developed.
(f) Procedural regulations for management of program
The Secretary shall, by regulation, establish procedures for-(1) receipt and consideration of nominations for any area to be offered for lease or to be excluded from
leasing;(2) public notice of and participation in development of the leasing program;(3) review by State and local governments which may be impacted by the proposed leasing;(4) periodic consultation with State and local governments, oil and gas lessees and permittees, and
representatives of other individuals or organizations engaged in activity in or on the outer Continental Shelf, including those involved in fish and shellfish recovery, and recreational activities; and(5) consideration of the coastal zone management program being developed or administered by an
affected coastal State pursuant to section 1454 or section 1455 of title 16.
Such procedures shall be applicable to any significant revision or reapproval of the leasing program.
(g) Information from public and private sources; confidentiality of classified or privileged data
The Secretary may obtain from public sources, or purchase from private sources, any survey, data, report, or other information (including interpretations of such data, survey, report, or other information) which may be necessary to assist him in preparing any environmental impact statement and in making other
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evaluations required by this subchapter. Data of a classified nature provided to the Secretary under the provisions of this subsection shall remain confidential for such period of time as agreed to by the head of the department or agency from whom the information is requested. The Secretary shall maintain the confidentiality of all privileged or proprietary data or information for such period of time as is provided for in this subchapter, established by regulation, or agreed to by the parties.
(h) Information from all Federal departments and agencies; confidentiality of privileged or proprietary information
The heads of all Federal departments and agencies shall provide the Secretary with any nonpriviledged 1
or nonproprietary information he requests to assist him in preparing the leasing program and may provide the Secretary with any privileged or proprietary information he requests to assist him in preparing the leasing program. Privileged or proprietary information provided to the Secretary under the provisions of this subsection shall remain confidential for such period of time as agreed to by the head of the department or agency from whom the information is requested. In addition, the Secretary shall utilize the existing capabilities and resources of such Federal departments and agencies by appropriate agreement.
(Aug. 7, 1953, ch. 345, §18, as added Pub. L. 95–372, title II, §208, Sept. 18, 1978, 92 Stat. 649.)
TRANSFER OF FUNCTIONSFunctions of Secretary of the Interior to promulgate regulations under this subchapter which
relate to fostering of competition for Federal leases, implementation of alternative bidding systems authorized for award of Federal leases, establishment of diligence requirements for operations conducted on Federal leases, setting of rates for production of Federal leases, and specifying of procedures, terms, and conditions for acquisition and disposition of Federal royalty interests taken in kind, transferred to Secretary of Energy by section 7152(b) of Title 42, The Public Health and Welfare. Section 7152(b) of Title 42 was repealed by Pub. L. 97–100, title II, §201, Dec. 23, 1981, 95 Stat. 1407, and functions of Secretary of Energy returned to Secretary of the Interior. See House Report No. 97–315, pp. 25, 26, Nov. 5, 1981.
1 So in original. Probably should be “nonprivileged”.
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43 USC 1349: Citizens suits, jurisdiction and judicial reviewText contains those laws in effect on October 21, 2013
From Title 43-PUBLIC LANDSCHAPTER 29-SUBMERGED LANDSSUBCHAPTER III-OUTER CONTINENTAL SHELF LANDS
Jump To: Source CreditReferences In TextAmendmentsEffective Date
§1349. Citizens suits, jurisdiction and judicial review
(a) Persons who may bring actions; persons against whom action may be brought; time of action; intervention by Attorney General; costs and fees; security
(1) Except as provided in this section, any person having a valid legal interest which is or may be adversely affected may commence a civil action on his own behalf to compel compliance with this subchapter against any person, including the United States, and any other government instrumentality or agency (to the extent permitted by the eleventh amendment to the Constitution) for any alleged violation of any provision of this subchapter or any regulation promulgated under this subchapter, or of the terms of any permit or lease issued by the Secretary under this subchapter.(2) Except as provided in paragraph (3) of this subsection, no action may be commenced under
subsection (a)(1) of this section-(A) prior to sixty days after the plaintiff has given notice of the alleged violation, in writing under oath, to
the Secretary and any other appropriate Federal official, to the State in which the violation allegedly occurred or is occurring, and to any alleged violator; or(B) if the Attorney General has commenced and is diligently prosecuting a civil action in a court of the
United States or a State with respect to such matter, but in any such action in a court of the United States any person having a legal interest which is or may be adversely affected may intervene as a matter of right.
(3) An action may be brought under this subsection immediately after notification of the alleged violation in any case in which the alleged violation constitutes an imminent threat to the public health or safety or would immediately affect a legal interest of the plaintiff.(4) In any action commenced pursuant to this section, the Attorney General, upon the request of the
Secretary or any other appropriate Federal official, may intervene as a matter of right.(5) A court, in issuing any final order in any action brought pursuant to subsection (a)(1) or subsection (c)
of this section, may award costs of litigation, including reasonable attorney and expert witness fees, to any party, whenever such court determines such award is appropriate. The court may, if a temporary restraining order or preliminary injunction is sought, require the filing of a bond or equivalent security in a sufficient amount to compensate for any loss or damage suffered, in accordance with the Federal Rules of Civil Procedure.(6) Except as provided in subsection (c) of this section, all suits challenging actions or decisions allegedly
in violation of, or seeking enforcement of, the provisions of this subchapter, or any regulation promulgated under this subchapter, or the terms of any permit or lease issued by the Secretary under this subchapter, shall be undertaken in accordance with the procedures described in this subsection. Nothing in this section shall restrict any right which any person or class of persons may have under any other Act or common law to seek appropriate relief.
(b) Jurisdiction and venue of actions
(1) Except as provided in subsection (c) of this section, the district courts of the United States shall have jurisdiction of cases and controversies arising out of, or in connection with (A) any operation conducted on the outer Continental Shelf which involves exploration, development, or production of the minerals, of the subsoil and seabed of the outer Continental Shelf, or which involves rights to such minerals, or (B) the cancellation, suspension, or termination of a lease or permit under this subchapter. Proceedings with respect to any such case or controversy may be instituted in the judicial district in which any defendant resides or may be found, or in the judicial district of the State nearest the place the cause of action arose.(2) Any resident of the United States who is injured in any manner through the failure of any operator to
comply with any rule, regulation, order, or permit issued pursuant to this subchapter may bring an action for
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damages (including reasonable attorney and expert witness fees) only in the judicial district having jurisdiction under paragraph (1) of this subsection.
(c) Review of Secretary's approval of leasing program; review of approval, modification or disapproval of exploration or production plan; persons who may seek review; scope of review; certiorari to Supreme Court
(1) Any action of the Secretary to approve a leasing program pursuant to section 1344 of this title shall be
subject to judicial review only in the United States Court of Appeal 1 for the District of Columbia.(2) Any action of the Secretary to approve, require modification of, or disapprove any exploration plan or
any development and production plan under this subchapter shall be subject to judicial review only in a United States court of appeals for a circuit in which an affected State is located.(3) The judicial review specified in paragraphs (1) and (2) of this subsection shall be available only to a
person who (A) participated in the administrative proceedings related to the actions specified in such paragraphs, (B) is adversely affected or aggrieved by such action, (C) files a petition for review of the Secretary's action within sixty days after the date of such action, and (D) promptly transmits copies of the petition to the Secretary and to the Attorney General.(4) Any action of the Secretary specified in paragraph (1) or (2) shall only be subject to review pursuant to
the provisions of this subsection, and shall be specifically excluded from citizen suits which are permitted pursuant to subsection (a) of this section.(5) The Secretary shall file in the appropriate court the record of any public hearings required by this
subchapter and any additional information upon which the Secretary based his decision, as required by section 2112 of title 28. Specific objections to the action of the Secretary shall be considered by the court only if the issues upon which such objections are based have been submitted to the Secretary during the administrative proceedings related to the actions involved.(6) The court of appeals conducting a proceeding pursuant to this subsection shall consider the matter
under review solely on the record made before the Secretary. The findings of the Secretary, if supported by substantial evidence on the record considered as a whole, shall be conclusive. The court may affirm, vacate, or modify any order or decision or may remand the proceedings to the Secretary for such further action as it may direct.(7) Upon the filing of the record with the court, pursuant to paragraph (5), the jurisdiction of the court shall
be exclusive and its judgment shall be final, except that such judgment shall be subject to review by the Supreme Court of the United States upon writ of certiorari.
(Aug. 7, 1953, ch. 345, §23, as added Pub. L. 95–372, title II, §208, Sept. 18, 1978, 92 Stat. 657; amended Pub. L. 98–620, title IV, §402(44), Nov. 8, 1984, 98 Stat. 3360.)
REFERENCES IN TEXTThe Federal Rules of Civil Procedure, referred to in subsec. (a)(5), are set out in the Appendix
to Title 28, Judiciary and Judicial Procedure.
AMENDMENTS1984-Subsec. (d). Pub. L. 98–620 struck out subsec. (d) which provided that except as to
causes of action considered by the court to be of greater importance, any action under this section would take precedence on the docket over all other causes of action and would be set for hearing at the earliest practical date and expedited in every way.
EFFECTIVE DATE OF 1984 AMENDMENTAmendment by Pub. L. 98–620 not applicable to cases pending on Nov. 8, 1984, see section
403 of Pub. L. 98–620, set out as a note under section 1657 of Title 28, Judiciary and Judicial Procedure.
1 So in original. Probably should be “Appeals”.
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1005
Council on Environmental Quality § 1502.16
among alternatives). The summary will
normally not exceed 15 pages.
§ 1502.13 Purpose and need.
The statement shall briefly specify
the underlying purpose and need to
which the agency is responding in pro-
posing the alternatives including the
proposed action.
§ 1502.14 Alternatives including the proposed action.
This section is the heart of the envi-
ronmental impact statement. Based on
the information and analysis presented
in the sections on the Affected Envi-
ronment (§ 1502.15) and the Environ-
mental Consequences (§ 1502.16), it
should present the environmental im-
pacts of the proposal and the alter-
natives in comparative form, thus
sharply defining the issues and pro-
viding a clear basis for choice among
options by the decisionmaker and the
public. In this section agencies shall: (a) Rigorously explore and objec-
tively evaluate all reasonable alter-
natives, and for alternatives which
were eliminated from detailed study,
briefly discuss the reasons for their
having been eliminated. (b) Devote substantial treatment to
each alternative considered in detail
including the proposed action so that
reviewers may evaluate their compara-
tive merits. (c) Include reasonable alternatives
not within the jurisdiction of the lead
agency. (d) Include the alternative of no ac-
tion.
(e) Identify the agency’s preferred al-
ternative or alternatives, if one or
more exists, in the draft statement and
identify such alternative in the final
statement unless another law prohibits
the expression of such a preference.
(f) Include appropriate mitigation
measures not already included in the
proposed action or alternatives.
§ 1502.15 Affected environment.
The environmental impact statement
shall succinctly describe the environ-
ment of the area(s) to be affected or
created by the alternatives under con-
sideration. The descriptions shall be no
longer than is necessary to understand
the effects of the alternatives. Data
and analyses in a statement shall be
commensurate with the importance of
the impact, with less important mate-
rial summarized, consolidated, or sim-
ply referenced. Agencies shall avoid
useless bulk in statements and shall
concentrate effort and attention on im-
portant issues. Verbose descriptions of
the affected environment are them-
selves no measure of the adequacy of
an environmental impact statement.
§ 1502.16 Environmental consequences.
This section forms the scientific and
analytic basis for the comparisons
under § 1502.14. It shall consolidate the
discussions of those elements required
by sections 102(2)(C)(i), (ii), (iv), and (v)
of NEPA which are within the scope of
the statement and as much of section
102(2)(C)(iii) as is necessary to support
the comparisons. The discussion will
include the environmental impacts of
the alternatives including the proposed
action, any adverse environmental ef-
fects which cannot be avoided should
the proposal be implemented, the rela-
tionship between short-term uses of
man’s environment and the mainte-
nance and enhancement of long-term
productivity, and any irreversible or ir-
retrievable commitments of resources
which would be involved in the pro-
posal should it be implemented. This
section should not duplicate discus-
sions in § 1502.14. It shall include dis-
cussions of:
(a) Direct effects and their signifi-
cance (§ 1508.8).
(b) Indirect effects and their signifi-
cance (§ 1508.8).
(c) Possible conflicts between the
proposed action and the objectives of
Federal, regional, State, and local (and
in the case of a reservation, Indian
tribe) land use plans, policies and con-
trols for the area concerned. (See
§ 1506.2(d).)
(d) The environmental effects of al-
ternatives including the proposed ac-
tion. The comparisons under § 1502.14
will be based on this discussion.
(e) Energy requirements and con-
servation potential of various alter-
natives and mitigation measures.
(f) Natural or depletable resource re-
quirements and conservation potential
of various alternatives and mitigation
measures.
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CERTIFICATE OF SERVICE
I hereby certify that on this 21st day of March, 2014, I have served the
foregoing Reply Brief for Petitioner on all registered counsel through the Court’s
electronic filing system (ECF).
DATED: March 21, 2014
_/s/ Steven Sugarman____________ Steven Sugarman 347 County Road 55A Cerrillos, NM 87010 (505) 672-5082 [email protected]
Michael A. Livermore
INSTITUTE FOR POLICY INTEGRITY 139 MacDougal Street, Wilf Hall Room 319
New York, NY 10012 (212) 992-8932
Attorneys for the Petitioner.
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