Drilling Under New Wyoming Leases on Hold as Judge Requires BLM to Reconsider Impacts on Climate Change
Legal Sidebari
Drilling Under New Wyoming Leases on Hold
as Judge Requires BLM to Reconsider Impacts
on Climate Change
April 16, 2019
A recent decision in the United States District Court for the District of Columbia Circuit has paused oil
and gas exploration and production activity in certain leased areas of Wyoming and hinted at heightened
requirements that the Bureau of Land Management (BLM) must satisfy to comply with the National
Environmental Policy Act (NEPA) before issuing oil and gas leases. Specifically, the decision will require
BLM to conduct a more thorough review of the potential climate change impacts of certain oil and gas
leases before allowing the lessees to conduct drilling operations.
The decision addresses five oil and gas lease sales for areas in Wyoming between May 2015 and August
2016 that resulted in BLM issuing 282 leases. BLM had determined that the lease sales did not require it
to issue an Environmental Impact Statement (EIS), which is a detailed evaluation of a federal action that
NEPA and its implementing regulations require for any federal action that will “significantly affect the
quality of the human environment.” Instead, BLM issued Environmental Assessments (EAs) that were
“tiered to,” i.e. incorporated, a resource management plan for the relevant area and an EIS, which BLM
had produced at the land use planning stage. Addressing how the leases would impact climate change on a
“conceptual level,” the EAs acknowledged that oil and gas drilling on the parcels to be leased would
cause Greenhouse Gas (GHG) emissions. However, BLM did not attempt to quantify and project the
GHG emissions likely to result from the lease sales. The EAs noted that “[t]he inconsistency in results of
scientific models … limits the ability to quantify potential future impacts at this level.” The EAs
concluded that the GHG emissions likely to result from each lease sale “would not have a measurable
effect” when compared to national or global emissions, or would represent only an “incremental
contribution” to regional and global GHG emissions. For each of the EAs, BLM issued a Finding of No
Significant Impact (FONSI), meaning that BLM did not require an EIS to issue the leases.
Non-profit groups, including WildEarth Guardians, challenged BLM’s issuance of these leases, arguing
that “NEPA required BLM to conduct a more piercing consideration of the consequences of oil and gas
drilling before it authorized the Wyoming Lease Sales.” More specifically, Plaintiffs argue[d] that, by
issuing the EAs and FONSIs in conjunction with the Wyoming Lease Sales, BLM violated NEPA because
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it failed to take a “hard look” at the GHG emissions and their impact on climate change. The court
addressed a number of specific alleged shortcomings in the agency’s efforts to consider the direct, indirect
and cumulative impacts of the lease sales on GHG emissions as required by NEPA and its implementing
regulations.
The court noted that once the leases were sold, BLM had made an “irrevocable commitment” to allow at
least some GHG emissions, and therefore had to analyze the reasonably foreseeable impacts of those
leases on GHG emissions. The court acknowledged that BLM was not required to assess or evaluate
impacts on a parcel-by-parcel basis at the lease sale stage, and that a simple qualitative analysis of GHG
emissions impacts in an EA is acceptable if more definitive information cannot be provided. However, the
court found that “while BLM could not, at the leasing stage, reasonably foresee the environmental
impacts of specific drilling projects, it could reasonably foresee and forecast the impacts of oil and gas
drilling across the leased parcels as a whole.” The court thus concluded that “given the mix of information
available to BLM at the leasing stage, NEPA required that BLM reasonably quantify the GHG emissions
resulting from oil and gas development on the leased parcels in the aggregate.”
The court also found that BLM had “failed to sufficiently consider another potential effect of leasing: the
downstream GHG emissions that would result from the production of oil and gas on the leased parcels.”
As the court noted, NEPA regulations require agencies to evaluate the indirect effects that are “caused by
[a proposed federal] action and are later in time or farther removed in distance, but are still reasonably
foreseeable,” and the scope of this requirement has been a subject of considerable debate in recent years.
After a lengthy review of existing precedent, the court found that “even under the heightened causation
standard established” in previous cases, “downstream GHG emissions from fossil fuel use are an indirect
effect of BLM’s oil and gas leasing program at issue here” and therefore BLM was required to consider
them in its NEPA review of the lease sales.
The court next considered the plaintiff’s claim that BLM had not adequately addressed the cumulative
impacts of the lease sales on GHG emissions as required by NEPA regulations. The court agreed with the
plaintiffs, specifically noting that BLM’s failure to quantify estimated GHG emissions undermined its
conclusion that emissions resulting from the leases merely “represent an incremental contribution to the
total regional and global GHG emissions levels.” The court held that without quantified estimates, BLM
“could not conceptualize the extent to which the lease sales would contribute to the local, regional and
global climate change discussed in the EAs and tiered EISs.” However the court disagreed with the
plaintiffs’ assertion that BLM should be required to employ a methodology that monetizes GHG
emissions in the context of a “global carbon budget” in order to quantify the “social cost of carbon,”
finding that the agency’s decision to forgo this analysis “does not rise to the level of a NEPA violation.”
While this decision is important because of the court’s determinations regarding the extent of agency
obligations under NEPA to consider GHG emissions prior to lease sales, the court’s choice of remedy is
also noteworthy. The plaintiffs asked the court to void the Wyoming leases and enjoin BLM from
authorizing leases until the agency complied with NEPA requirements per GHG emissions. However,
while the court sided with the plaintiffs on the issue of BLM’s NEPA obligations, it chose not to void the
leases. Instead the court remanded the non-conforming EAs and FONSIs to BLM to allow the agency to
address the deficiencies identified in the decision. The court noted that these deficiencies consist “merely
of a failure to fully discuss the environmental effects of these lease sales” and that “nothing in the record
indicates that on remand the agency will necessarily fail to justify its decisions to issue EAs and
FONSIs.” Noting, however, that the failures raised doubts about BLM’s decision making regarding the
Wyoming leases, the court enjoined BLM from issuing any permits to drill under the leases at issue in the
case until BLM addresses its NEPA compliance shortcomings.
It is not yet known if BLM will successfully appeal this decision. If the decision stands, it has policy
implications that may be of interest to Congress. By holding that NEPA requires BLM to quantify how its
proposed leases impact GHG emissions, the decision hints that NEPA may require federal agencies to
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consider the impacts of a broader scope of federal actions on GHG emissions. Congress could amend
NEPA to add specificity to its requirements, or look into NEPA compliance at BLM and other federal
agencies.
Author Information
Adam Vann
Legislative Attorney
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