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Citizens for a Healthy Community v. United States Bureau of Land Management

United States District Court, D. Colorado

March 27, 2019

UNITED STATES BUREAU OF LAND MANAGEMENT, an agency of the U.S. Department of Interior; DAVID BERNHARDT, in his official capacity as Acting U.S. Secretary of the Interior; STEPHANIE CONNOLLY, in her official capacity as Southwest District Manager; UNITED STATES FOREST SERVICE, an agency of the U.S. Department of Agriculture; SONNY PERDUE, in his official capacity as U.S. Secretary of Agriculture; and SCOTT G. ARMENTROUT, in his official capacity as Forest Supervisor; Defendants, and SG Interests I, Ltd. and SG Interests VII, Ltd., Intervenor-Defendants.



         This matter is before me on Plaintiffs' Amended Complaint for Declaratory and Injunctive Relief and Petition for Review of Agency Action. ECF No. 14. Plaintiffs seek judicial review of: (1) Defendant Bureau of Land Management's (“BLM”) approval of a master development plan; (2) Defendant United States Forest Service's (“USFS”) approval of certain natural gas wells, well pads, and related infrastructure; and (3) both Defendants' approval of related applications for permits to drill. See Addendum to this Opinion for a list of acronyms used. I refer to USFS and BLM collectively as “Defendants.”

         The public officers named as defendants in this case have been updated pursuant to Fed.R.Civ.P. 25(d). SG Interests I, Ltd. and SG Interests VII, Ltd. (“Intervenor-Defendants”) properly intervened. ECF No. 26. The matter is fully briefed and the administrative records (“AR”) are lodged with the Court. ECF Nos. 44, 45, 47, 50-52.

         After carefully analyzing the briefs and the relevant portions of the record, I DEFER final ruling pending further briefing on remedies in accordance with this Order.

         I. Law

         A. The National Environmental Policy Act (“NEPA”)

         NEPA is the “basic national charter for protection of the environment” and its “procedures must insure that environmental information is available to public officials and citizens before decisions are made and before actions are taken.” 40 C.F.R. § 1500.1. Congress enacted NEPA to ensure that all federal agencies consider the environmental impacts of their actions to prevent or eliminate damage to the environment. Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 371 (1989); see 42 U.S.C. § 4321. NEPA's requirements are augmented by longstanding regulations issued by the Council on Environmental Quality, to which courts owe substantial deference. New Mexico ex rel. Richardson v. Bureau of Land Mgmt., 565 F.3d 683, 703 (10th Cir. 2009) (“New Mexico”) (citing Marsh, 490 U.S. at 372).

         Under NEPA, federal agencies must “include in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, a detailed statement by the responsible official on, ” in relevant part, the environmental impact of the proposed action and alternatives to the proposed action. 42 U.S.C. § 4332(C)(i)-(iii). This report may be an Environmental Assessment (“EA”), where the agency determines whether the action “is likely to significantly affect the quality of the human environment.” New Mexico, 565 F.3d at 703 (alterations and quotations omitted). If the agency finds that the action is not likely to significantly affect the quality of the human environment, it may issue a “finding of no significant impact” (“FONSI”). Id. (quoting 40 C.F.R. § 1508.13). If so, the agency must prepare a more thorough Environmental Impact Statement (“EIS”)-the agency may also skip the EA and directly prepare an EIS. Id. at 703, n.23.

         The requirement to complete an EIS aims to ensure “that the agency, in reaching its decision, will have available, and will carefully consider, detailed information concerning significant environmental impacts” and guarantees “that the relevant information will be made available to the larger audience that may also play a role in both the decisionmaking process and the implementation of that decision.” Robertson v. Methow Va ley Citizens Council, 490 U.S. 332, 349 (1989).

         B. Authority to Lease Oil and Gas on Federal Land

          Through the Mineral Leasing Act, 30 U.S.C. §§ 181-287, the Federal Land Policy and Management Act, 43 U.S.C. §§ 1701-1787, and related regulations, BLM has authority to lease public lands with oil and gas reserves to private industry for development. W. Energy A l. v. Zinke, 877 F.3d 1157, 1161 (10th Cir. 2017). Lands contained in national forests have additional oversight from the Secretary of Agriculture. 30 U.S.C. § 226(h).

         In enacting the Federal Land Policy and Management Act, Congress aimed to empower the Secretary of the Interior to manage the United States' public lands. 43 U.S.C. § 1701. The Secretary, through BLM, “shall manage the public lands under principles of multiple use and sustained yield.” 43 U.S.C. § 1732(a). “Multiple use” means “a combination of balanced and diverse resource uses that takes into account the long-term needs of future generations for renewable and nonrenewable resources, including, but not limited to, recreation, range, timber, minerals, watershed, wildlife and fish, and natural scenic, scientific and historical values . . . .”43 U.S.C. § 1702(c).Congress entrusts BLM with the “orderly and efficient exploration, development and production of oil and gas.” 43 C.F.R. § 3160.0-4; 43 U.S.C. § 1732(b). This is done by using a “three-phase decision-making process.” W. Energy A l. v. Zinke, 877 F.3d at 1161 (quoting Pennaco Energy, Inc. v. U.S. Dep't of Interior, 377 F.3d 1147, 1151 (10th Cir. 2004)).

         In the first phase, BLM creates a resource management plan (“RMP”), which is “designed to guide and control future management actions and the development of subsequent, more detailed and limited scope plans for resources and uses.” 43 C.F.R. § 1601.0-2; id. Part of an RMP indicates the lands open or closed to the development of oil and gas, and subsequent development must abide by the terms of the RMP. W. Energy A l., 877 F.3d at 1161-62. The approval of an RMP “is considered a major Federal action significantly affecting the quality of the human environment” and thus requires an EIS. 43 C.F.R. § 1601.0-6.

         In the second phase, through state offices, BLM identifies parcels that it will offer for lease, responds to potential protests of the suggested parcels, and conducts “a competitive lease sale auction.” W. Energy All., 877 F.3d at 1162 (citing 43 C.F.R. Subpart 3120). During the identification of parcels available for leasing, a 2010 Department of Interior policy mandates additional review, including: (1) an interdisciplinary team reviewing the parcels proposed for leasing and conducting site visits; (2) identifying issues BLM must consider; and (3) obliging BLM to consult other stakeholders “such as federal agencies, and State, tribal, and local governments.” Id.

         In the final phase, after the sale of a lease, BLM “decides whether specific development projects will be permitted on the leased land.” Id.; see 43 C.F.R. § 3162.3-1; 30 U.S.C. § 226. BLM must approve applications for permits to drill after parcels of land are leased. 30 U.S.C. § 226(g).

         C. The Administrative Procedure Act

         NEPA provides no private cause of action and thus Plaintiffs' claims arise under the Administrative Procedure Act. New Mexico, 565 F.3d at 704. Under the Act, a person who is suffering a “legal wrong because of agency action” is entitled to judicial review. 5 U.S.C. § 702. An agency's NEPA compliance is reviewed to see whether it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” New Mexico, 565 F.3d at 704 (quoting 5 U.S.C. § 706(2)(a)). The agency action is arbitrary and capricious if the agency

(1) entirely failed to consider an important aspect of the problem, (2) 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, (3) failed to base its decision on consideration of the relevant factors, or (4) made a clear error of judgment.

Id. (quoting Utah Envtl. Cong. v. Troyer, 479 F.3d 1269, 1280 (10th Cir. 2007)) (quotations omitted).

         When reviewing factual determinations made by agencies under NEPA, short of a “clear error of judgment, ” an agency is required to take “hard look” at information relevant to a decision. Id. A court considers only the agency's reasoning at the time it made its decision, “excluding post-hoc rationalization concocted by counsel in briefs or argument.” Id. (citing Utahns for Better Transp. v. U.S. Dep't of Transp., 305 F.3d 1152, 1165 (10th Cir. 2002)); see 3 Charles H. Koch, Jr. and Richard Murphy, Admin. L. & Prac. § 9:26 (3d ed. 2018) (“Without engaging in review of the actual resolution of factual questions of this variety, courts by using the hard look standard assure that the agency did a careful job at fact gathering and otherwise supporting its position.”).

         In reviewing an EIS or EA, the role of a federal court under NEPA is to simply “ensure that the agency has adequately considered and disclosed the environmental impact of its actions.” Coal. of Concerned Citizens To Make Art Smart v. Fed. Transit Admin. of U.S. Dep't of Transportation, 843 F.3d 886, 902 (10th Cir. 2016) (quoting Wyo. v. U.S. Dep't of Agric., 661 F.3d 1209, 1256-57 (10th Cir. 2011)). As such, the agency action is presumed valid and the burden of proof rests upon those challenging the agency action. New Mexico, 565 F.3d at 704 (quoting Citizens' Comm. to Save Our Canyons v. Krueger, 513 F.3d 1169, 1176 (10th Cir. 2008)). “So long as the record demonstrates that the agencies in question followed the NEPA procedures . . . the court will not second-guess the wisdom of the ultimate decision.” Utahns for Better Transp., 305 F.3d at 1163 (quoting Robertson v. Methow Va ley Citizens Council, 490 U.S. at 350).

         II. Background

         A. Bull Mountain Master Development Plan

         The Bull Mountain Unit (the “Unit”) is located in the Colorado River basin, approximately 30 miles northeast of the town of Paonia and is bisected by State Highway 133. UNC0027453 (I use the numbering system consistent with the Administrative Record). The Unit consists of: 440 acres of federal surface lands underlain by a mineral estate administered by BLM; 12, 900 acres of split-estate lands consisting of private surface and BLM-administered minerals; and 6, 330 acres of fee land consisting of private surface and private minerals regulated by the Colorado Oil and Gas Conservation Commission. UNC0027470.

         In 2008 and 2009, BLM sought input for a master development plan (“MDP”) concerning 2, 300 acres of land owned by Intervenor-Defendants within the Unit. UNC0055338, 0055341. An MDP typically provides infrastructural information regarding a planned cluster of wells and associated facilities adjacent to an oil and gas unit or field. UNC0027451. BLM completed a preliminary EA, but then elected to complete an EIS regarding the Unit's MDP. UNC0055344, 0078547. In January 2015, BLM published a draft EIS with an opportunity for public comment. UNC0005710-11. In July 2016, BLM published a final EIS. UNC0042302.

         In the final EIS, BLM considered four alternatives: alternative A was a no-action alternative and alternatives B, C, and D contained a development of 146 new gas wells and four new water disposal wells. UNC0027457. Alternatives B, C, and D contained 36, 35, and 33 new well pads, respectively. Id. BLM selected alternative D as its preferred alternative. Id. It assumed the life of the project would be at least 50 years. UNC0027501. In October 2017, BLM approved the MDP in a Record of Decision. UNC0042509. This Record of Decision additionally approved an application for permit to drill (“APD”) by Intervenor-Defendants. UNC0042453. BLM notes that since the commencement of this suit, it has approved: (1) three other APDs in the same well pad location as the original APD; (2) two lateral extensions for an existing well bore on a different well pad; and (3) two APDs on well pads located on private surface lands. Defs.' Resp., ECF No. 50 at 5.

         B. 25-well Project

         The 25-well Project addressed six APDs-three from Intervenor-Defendants and three from another company. UNC0097956. The 25-well Project is situated between Paonia and Carbondale. UNC0097964. It involves the construction of 25 natural gas wells on four new well pads and one existing well pad and the approval of 19 additional APDs. UNC0097956-57. One proposed well pad occurs on split estate lands with federal minerals underneath private surface land. UNC0097944. Three other well pads are located on federally managed lands. Id. The fifth well pad is located on private surface lands over private mineral estate, but is planned to bore horizontally into adjacent federal mineral estate. Id.

         In March 2015, BLM and USFS announced their intention to complete an EA for the 25-well Project and invited public comment. UNC0079341-42. In June, the agencies issued a preliminary EA with an invitation for additional public comment. UNC0079346. In September, the agencies issued a final EA and a draft FONSI. UNC0097938, 0098284. In December 2015, both agencies signed FONSIs and accepted the EA. UNC0098295, 0098306, 0098311.

         III. Analysis

         Plaintiffs are non-profit organizations who focus on environmental issues. ECF No. 14 at 6-10. Plaintiffs challenge the NEPA review process performed by Defendants regarding the Unit's MPD and the 25-well Project, alleging generally that Defendants “failed to consider a reasonable range of alternatives” and “failed to take a hard look at the direct, indirect, and cumulative impacts to people and the environment.” Pls.' Br., ECF No. 47 at 11, 15.

         A. Consideration of Alternatives

         Plaintiffs argue that Defendants considered an insufficiently narrow range of alternatives in violation of NEPA. ECF No. 47 at 11. They contend that Defendants should have considered a “phased development alternative . . . which would involve clustering drilling geographically to maintain open areas and allowing concentrated development that proceeds in stages rather than all at once.” Id. at 12. This proposed alternative would involve clustering oil and gas development in certain areas, then moving to other areas and using interim surface reclamation measures as a way to preserve open space for wildlife and recreation. Id.

         Defendants respond that Plaintiffs: (1) misunderstand the design features accompanying alternatives C and D; and (2) ignore Defendants' explanation of why it did not further consider an extended development timeframe. ECF No. 50 at 8. Defendants note that in alternative C, they considered a “progressive development plan” which contained “timing limitations that would allow for drilling and construction in phased timeframes.” Id. at 11-12. This plan considered voluntary seasonal timing limitations for private mineral development and included methods to monitor wells that would reduce disturbances to wildlife. Id. at 12. Intervenor-Defendants add that Plaintiffs have not offered a sufficient explanation of what a phased development plan would contain. Intervenor-Defs.' Br., ECF No. 51 at 9-10.

         The exploration of alternatives is the “heart” of an EIS, where the agency must rigorously explore and objectively evaluate all reasonable alternatives to the proposed action. New Mexico, 565 F.3d at 708 (citing 40 C.F.R. § 1502.14). In an EA, the agency must provide a “brief discussion” of alternatives. 40 C.F.R. 1508.9(b); see also Greater Ye lowstone Coal. v. Flowers, 359 F.3d 1257, 1278-79 (10th Cir. 2004) (a less extensive search for reasonable alternatives is required under NEPA when an agency makes an informed decision that the environmental impact of proposed action will be small).

         “While NEPA ‘does not require agencies to analyze the environmental consequences of alternatives it has in good faith rejected as too remote, speculative, or impractical or ineffective,' it does require the development of ‘information sufficient to permit a reasoned choice of alternatives as far as environmental aspects are concerned.'” New Mexico, 565 F.3d at 708 (quoting Colo. Envtl. Coal. v. Dombeck, 185 F.3d 1162, 1174 (10th Cir. 1999). As such, an agency need only evaluate alternatives that are significantly distinguishable from the considered alternatives. Id. at 708-09 (quoting Westlands Water Dist. v. U.S. Dep't of the Interior, 376 F.3d 853, 868 (9th Cir. 2004)).

         The sufficiency of an agency's analysis of alternatives in an EIS is measured against two guideposts using a “rule of reason.” Id. at 709. First, an alternative is reasonable only if it falls within the agency's statutory mandate. Id. (citing Westlands, 376 F.3d at 866). “Second, reasonableness is judged with reference to an agency's objectives for a particular project.” Id. (citing cases). Further, if “the action subject to NEPA review is triggered by a proposal or application from a private party, it is appropriate for the agency to give substantial weight to the goals and objectives of that private actor.” Citizens' Comm. to Save Our Canyons v. U.S. Forest Serv., 297 F.3d 1012, 1030 (10th Cir. 2002) (citing cases). However, this does not “allow an agency to define the objectives so narrowly as to preclude a reasonable consideration of alternatives. Id. (citing Davis v. Mineta, 302 F.3d 1104 (10th Cir. 2002)).

         In the EIS and EA, Defendants did not consider an alternative explicitly named “phased development, ” but they provided aspects of Plaintiffs' suggestions such that they were not significantly distinguishable from the considered alternatives. See New Mexico, 565F.3d at 708-09. Alternative C was a modification of Intervenor-Defendants' proposal. UNC0042479; ECF No. 50 at 10. It “was developed by modifying the geographic information system [] model to minimize surface disturbance by putting greater emphasis on soil types and proximity to existing roads and collocating roads and pipelines.” UNC0042479. “This, in turn, would reduce the miles of roads and pipelines needed to service the pad sites . . . .” Id. Further, seasonal winter timing limitations “would limit drilling and construction over private and federal minerals to no ...

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