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WildEarth Guardians v. U.S. Bureau of Land Management

United States District Court, D. Colorado

April 23, 2018

WILDEARTH GUARDIANS, Plaintiff,
v.
U.S. BUREAU OF LAND MANAGEMENT, Defendant.

          ORDER AFFIRMING AGENCY DECISION

          WILLIAM J. MARTINEZ, UNITED STATES DISTRICT JUDGE

         Plaintiff WildEarth Guardians (“WildEarth”) sues the Bureau of Land Management (“BLM”), under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701 et seq. WildEarth claims that BLM unlawfully determined that it had no duty to perform a “conformity” analysis under the Clean Air Act (“CAA”), 42 U.S.C. §§ 7401 et seq., when it auctioned certain oil and gas leases in May and November 2015.[1]

         On the arguments presented, WildEarth has not carried its burden to show that BLM acted unlawfully. Accordingly, BLM's decisions as to the two lease sales will be affirmed.

         I. STANDARD OF REVIEW

         The APA empowers a reviewing court to set aside agency action if it is, inter alia, “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). Generally, an agency decision will be considered arbitrary and capricious

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. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). A reviewing court should engage in a “thorough, probing, in-depth review, ” Wyoming v. United States, 279 F.3d 1214, 1238 (10th Cir. 2002) (citation omitted), with its review of the merits “generally limited to . . . the administrative record, ” Custer Cnty. Action Assoc. v. Garvey, 256 F.3d 1024, 1027 n.1 (10th Cir. 2001).

         However, “[t]he scope of review under the ‘arbitrary and capricious' standard is narrow and a court is not to substitute its judgment for that of the agency.” Motor Vehicle Mfrs. Ass'n, 463 U.S. at 43; see also Davis v. Mineta, 302 F.3d 1104, 1111 (10th Cir. 2002) (stating that the court's review is “highly deferential”). The Court confines its review “to ascertaining whether the agency examined the relevant data and articulated a satisfactory explanation for its decision, including a rational connection between the facts found and the decision made.” Colo. Wild v. U.S. Forest Serv., 435 F.3d 1204, 1213 (10th Cir. 2006). “An agency's action is entitled to a presumption of validity, and the burden is upon the petitioner to establish the action is arbitrary or capricious.” Sorenson Commc'ns, Inc. v. FCC, 567 F.3d 1215, 1221 (10th Cir. 2009).

         II. STATUTORY & REGULATORY BACKGROUND

         A. NAAQS, SIPs, and Ozone

         As part of the CAA, Congress charged the Environmental Protection Agency (“EPA”) with setting National Ambient Air Quality Standards (“NAAQS”) for certain pollutants. 42 U.S.C. § 7409. NAAQS are specifically described as “ambient air quality standards the attainment and maintenance of which in the judgment of the [EPA], based on such criteria and allowing an adequate margin of safety, are requisite to protect the public health.” Id. § 7409(b)(1).[2]

         Once a NAAQS is promulgated or revised, each state must adopt and submit to the EPA for approval a State Implementation Plan (“SIP”) that “provides for implementation, maintenance, and enforcement of [the NAAQS] in each air quality control region (or portion thereof) within such State.” Id. § 7410(a)(1). Each SIP must “include enforceable 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 [CAA's] applicable requirements.” Id. § 7410(a)(2)(A).

         The EPA has promulgated NAAQS for ozone, among other pollutants. The current ozone NAAQS is “0.075 parts per million (ppm), daily maximum 8-hour average.” 40 C.F.R. § 50.15(a).[3] Whether a region meets the standard is judged by asking whether “the 3-year average of the annual fourth-highest daily maximum 8-hour average [ozone] concentration is less than or equal to 0.075 ppm.” Id. § 50.15(b). If the answer is yes, the region is deemed in “attainment” with the ozone NAAQS. See 42 U.S.C. § 7407(d)(1)(A)(ii). If the answer is no, the region is in “nonattainment” status. Id. § 7407(d)(1)(A)(i).

         A substantial portion of Colorado's Front Range, along with portions of the eastern plains in Adams, Arapahoe, and Weld counties, is in nonattainment status for ozone (“Nonattainment Area”). See 40 C.F.R. § 81.306.

         B. The General Conformity Rule

         The federal government may not approve or support any activity that does not “conform” to an approved SIP. Id. § 7506(c)(1).

         Conformity to [a SIP] means-

(A) conformity to [a SIP'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.

         The EPA has promulgated regulations, collectively known as the “General Conformity Rule, ” that guide federal agencies' application of this requirement. See 40 C.F.R. §§ 51.851, 93.150-93.165. If a federal action is (a) unrelated to a transportation project and (b) may affect an ozone nonattainment area, the General Conformity Rule requires an agency to perform an ozone conformity analysis if “the total of direct and indirect emissions of [ozone] or [an ozone] precursor . . . caused by a Federal action would equal or exceed, ” as applicable here, 100 tons per year (tpy). 40 C.F.R. § 93.153(b)(1).[4] EPA considers 100 tpy a de minimis level of ozone or precursor emissions. See 58 Fed. Reg. 63214, 63228 (Nov. 30, 1993) (explaining why the General Conformity Rule excuses NAAQS conformity analysis in some circumstances).

         The General Conformity Rule defines “direct emissions” as “those emissions of a criteria pollutant or its precursors that are caused or initiated by the Federal action and originate in a nonattainment or maintenance area and occur at the same time and place as the action and are reasonably foreseeable.” 40 C.F.R. § 93.152. “Indirect emissions, ” by contrast, are those emissions of a criteria pollutant or its precursors:

(1) That are caused or initiated by the Federal action and originate in the same nonattainment or maintenance area but occur at a different time or place as the action;
(2) That are reasonably foreseeable;
(3) That the agency can practically control; and
(4) For which the agency has continuing program responsibility.

Id. Finally, indirect emissions are “reasonably foreseeable” when “the location of such emissions is known and 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.” Id.

         Thus, as applicable here, the General Conformity Rule establishes that an agency which can reasonably foresee more than de minimis ozone precursor emissions (defined as 100 tpy) must then take the next step of actually performing a NAAQS conformity analysis.

         C. Oil & Gas Leasing on Federal Lands

         BLM is the Secretary of the Interior's delegate for offering and managing onshore leases of federal property for purposes of mineral extraction, including oil and gas operations. See 43 C.F.R. § 3160.0-3. BLM carries out this responsibility through “a three-phase decision-making process.” Pennaco Energy, Inc. v. U.S. Dep't of Interior, 377 F.3d 1147, 1151 (10th Cir. 2004). First, BLM develops a resource management plan (“RMP”) for the region in question, which includes decisions regarding which resources may be extracted from the land. 43 C.F.R. § 1601.0-5(n). Second, BLM decides which parcels to offer for leasing, and then auctions the lease rights to those parcels to the highest bidder. See generally id. §§ 3120-3120.7. Third, BLM must decide whether to approve a lessee's “Application for Permit to Drill” (“APD”). Id. § 3162.3-1(c). “[A]t [this] point the agency has a second opportunity to review the potential environmental impacts of the proposed action and impose any necessary conditions of approval . . . .” Amigos Bravos v. BLM, 2011 WL 7701433, at *5 (D.N.M. Aug. 3, 2011).[5]

         III. FACTUAL BACKGROUND & PROCEDURAL HISTORY

         Oil and gas drilling and extraction operations may release nitrogen oxides (NOx) and volatile organic compounds (VOCs), which are ozone precursors. More specifically, given sunlight and the right meteorological conditions, NOx and VOCs can react with each other to produce ozone. This case turns on BLM's consideration of NOx and VOCs at the second stage of the three-stage process described above.

         A. The May 2015 Lease Sales

         Acting under an RMP encompassing northeastern Colorado, BLM issued an August 2014 environmental assessment (“EA”)[6] analyzing the environmental consequences of a proposed May 2015 auction of numerous oil and gas leases in that region. (Administrative Record (ECF No. 11) (“R.”) at 3895.) BLM understood that some of the lease parcels fall within the Nonattainment Area. (R. at 3700.) The EA therefore included a discussion of the NAAQS conformity requirement. (R. at 3700-01.)

         Applying the General Conformity Rule, BLM concluded that it did not need to perform a full conformity analysis for a number of reasons. As to “direct” emissions, BLM noted that leasing does not authorize any sort of emissions-generating activity, and so no “direct” emissions would result. (Id.) Concerning “indirect” emissions (i.e., future emissions likely to result upon approval of a lessee's APD), BLM found them analogous to land transfers, which EPA exempts from conformity analysis. (Id.) BLM also found that indirect emissions were not reasonably foreseeable:

- It is unclear who[] may bid on, let alone win individual lease parcels. Where such sales are made on a broad scale, it is unclear how many individuals may gain an interest in any number of the nominated parcels.
- Further, it is unclear if/how the parcels would be developed during the initial 10 year lease period, such that an emissions inventory could be reasonably estimated and compared ...

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