Consider the Alternative

The Bureau of Land Management (BLM) and United States Forest Service (USFS) recently considered four alternatives for a drilling proposal in the Pinedale Resource Area of the Wyoming Range. In the Draft Environmental Impact Statement (DEIS), BLM rejected two alternatives as unreasonable. The remaining two alternatives – including the alternative selected by BLM – were substantially identical. None of the alternatives included what I would consider reasonable environmental protection for watersheds and habitat.

BLM has the authority — and, according its own guidance documents, a duty —  to consider an alternatives that impose stringent environmental protections.  This position has ample support in the case law interpreting an agency’s responsibility to “objectively evaluate all reasonable alternatives” under the National Environmental Policy Act (NEPA).

The purpose and scope of a project define the range of alternatives that must be considered in an EIS. BLM is required to “take environmental values into account” in carrying out its regulatory functions for oil and gas development. It also has a substantive duty to “minimize damage to . . . fish and wildlife habitat and otherwise protect the environment.” Given that the rights granted in an oil or gas lease are explicitly “subject to” BLM’s right to condition development for its environmental purposes, measures to protect watersheds and fish are consistent with the purpose and scope of any proposal to drill on a lease. Therefore, to the extent that these measures are feasible and effective, they are reasonable alternatives and should be fully analyzed in the EIS.

I. The Alternatives Requirement

BLM must “rigorously explore and objectively evaluate all reasonable alternatives” when formulating a DEIS so that reviewers may evaluate their comparative merits. The alternatives section must also include a discussion of appropriate mitigation measures. While NEPA does not require the agency to analyze alternatives it has in good faith rejected as too remote, speculative, impractical, or ineffective, it does require the development of information sufficient to permit reasoned choice of environmental protections. Accordingly, the existence of a reasonable, but unexamined, alternative renders the EIS inadequate.

TU’s desired alternative would likely be considered a “reasonable” alternative. An alternative is “reasonable” only if it falls within the agency’s statutory purposes. For BLM, the alternative must fall within its duties under the Mineral Leasing Act (MLA) and Federal Land and Policy Management Act (FLMPA). The FLPMA directs BLM to “minimize damage to . . . fish and wildlife habitat and otherwise protect the environment.” The MLA requires BLM to “regulate all surface-disturbing activities conducted pursuant to any lease . . . in the interest of conservation of surface resources.” Thus, an alternative that would impose strict protections for watersheds and fish habitat is reasonable because it is consistent with BLM’s responsibilities under these statutes.

 

 

II. Seminal Cases Discussing the Alternatives Requirement

 

A. Methow Valley – Duty to discuss mitigation measures

 

The Supreme Court confirmed an agency’s duty to consider adequate mitigation measures under NEPA in Robertson v. Methow Valley Citizens Council. in Methow Valley, the plaintiffs challenged a Forest Service permit for a ski resort in a national forest. The Court held that the requirement that an agency consider mitigation measures is implicit in “NEPA’s demand” and CEQ regulations. The omission of a “reasonably complete discussion” of mitigation measures would undermine NEPA’ s action-forcing function. Without such a discussion, the Court added, neither the agency nor other interested groups or individuals could properly evaluate the severity of the adverse effects of the action.

NEPA’s requirement to discuss mitigation, however, ends with the discussion. There is no substantive requirement that a complete mitigation plan be actually formulated or adopted. Methow Valley rejected the Ninth Circuit decision that the Forest Service had the duty to develop necessary mitigation measures before it could issue a permit for the ski resort.

Despite this holding, Methow Valley’s emphasis on the need to discuss mitigation measures in impact statements reinforces the importance of mitigation in the NEPA process, and supports TU’s desire to require BLM to consider environmental alternatives in the future. Indeed, lower federal courts now give discussion of mitigation measures careful attention. Methow Valley’s reliance on CEQ’s interpretation of the Act also strengthens the role of CEQ in defining the impact statement process and what it should contain, including discussion of adequate mitigation measures.

 

B. Calvert Cliffs – NEPA’s Alternatives Requirements

NEPA actually contains two provisions requiring a discussion of alternatives. The provision requiring the preparation of impact statements requires a discussion of “alternatives to the proposed action.” Another provision, § 102(2)(E), requires agencies to “study, develop, and describe appropriate alternatives to recommended courses of action in any proposal which involves unresolved conflicts concerning alternative uses of available resources.”

The importance of both alternatives requirements was emphasized in the first landmark case on NEPA, Calvert Cliffs’ Coordinating Committee, Inc. v. Atomic Energy Commission. The court noted that the alternatives requirements seek—

 

to ensure that each agency . . . takes into proper account all possible approaches to a particular project . . . which would alter the environmental impact and the cost-benefit analysis. Only in that fashion is it likely that the most intelligent, optimally beneficial decision will ultimately be made.

 

Courts have held that agencies must comply with the alternatives requirement in § 102(2)(E) even when they do not have to prepare an impact statement. Although the alternatives requirement in § 102(2)(E) imposes somewhat different responsibilities and may be more rigorous than the requirement to discuss alternatives in an impact statement, courts often view the two alternatives requirements as interchangeable. Nonetheless, Calvert Cliffs lends further support to TU’s desire for the BLM to consider environmental alternatives in the future by recognizing the purpose and importance of both alternatives requirements.

 

C. California v. Block – Inadequate Range of Alternatives

The opinion in State of California v. Block contains an extension discussion of the duty to consider an adequate range of alternatives. In Block, the Plaintiffs challenged the EIS informing the Forest Service’s decision over which portions of a 62 million-acre national forest should remain roadless and designated wilderness. The Service considered 11 alternatives, ranging from the extremes of all wilderness to no wilderness. In between the extremes, however, none of the alternatives considered allocating more than 33% of the roadless area to wilderness. In holding that this was inadequate, the Ninth Circuit emphasized that an agency need not consider every alternative or alternatives that are unlikely to be implemented for legitimate reasons, but, equally, it must not ignore important alternatives or bias in its evaluation by arbitrarily narrowing the range of options considered.

The Block court held the Service should have considered the alternative of allocating more than one-third of the land to the wilderness category. It noted that the agency’s failure to consider this alternative was “puzzling,” especially as all 62 million acres of the forest met the criteria for wilderness. The court was also troubled that the agency’s selection of alternatives dictated an “end result” in which nonwilderness designations exceeded wilderness designations by a substantial margin.

The Service claimed the range of alternatives selected was adequate because the decisional criteria used to evaluate alternatives were diverse. The court disagreed. It held that the numerical values used to apply the criteria were not explained, that the cutoff points for designation varied from one alternative to the other, and that the agency could not emphasize decisional criteria over the actual results they generated. Other cases have similarly held an agency may not skew its alternatives in favor of a certain result.

 

D. Legacy Parkway – Failure to evaluate alternatives to protect habitat

The Great Salt Lake (“GSL”) and the wetlands surrounding its shoreline provide critical habitat for migratory birds. The Legacy Parkway, the first segment of a much longer proposed road extending along Utah’s Wasatch Front, would traverse fourteen miles along the GSL shoreline. Commenters urged the lead agencies to consider alternative means of meeting regional travel demand, including other highway alignments, mass transit, and land use planning, that could have lessened the parkway’s destruction of bird habitat. The Army Corps of Engineers refused to evaluate these alternatives in the EIS, apparently because they would have increased the cost of the project.

The EIS recommended as the preferred alternative a freeway design that would erase 114 acres of GSL wetlands. This was less than the 188 acres under the most damaging proposed route, but still more than under the least damaging alternative identified in the EIS. The Tenth Circuit found the EIS inadequate on three main grounds: (1) failure to consider a narrower right-of-way for the proposed road, which would have reduced wetland impacts; (2) failure to consider a proposed light rail as a less damaging practicable alternative; and (3) failure to evaluate wildlife impacts properly.

The litigation ended with a settlement between the environmental plaintiffs and the agencies. The road was redesigned to meander around wetlands and other sensitive areas, to prohibit most trucks, and to have a speed limit of fifty-five miles per hour. Slower speeds and the absence of trucks will reduce highway noise dramatically, reducing disturbance to birds in the GSL habitats.

 

III. The purpose and need of lease development on federal lands, generally

 

A. BLM’s environmental purpose

BLM should also examine TU’s environmental alternative because it is required to examine methods of protecting the environment by its enabling legislation.” While BLM’s authorities direct the agency to maximize oil and gas recovery, development is not its sole purpose. The MLA and FLPMA establish policy and requirements to protect the natural environment. These include the policy that the public lands be managed to protect ecological and water resources, provide habitat for fish, and to provide for outdoor recreation. Specifically, the MLA directs BLM to “regulate all surface-disturbing activities conducted pursuant to any lease . . . and determine reclamation and other actions as required in the interest of conservation of surface resources.” Moreover, the FLPMA requires that BLM, in managing the public lands, “take any action necessary to prevent unnecessary or undue degradation (UUD) of the lands.” Thus, the agency must take any action needed to prevent any activities, even if the activities are necessary for extracting minerals, that would unduly harm the public land.

 

B. The rights granted in an O&G lease are subject to BLM’s environmental purpose

Oil and gas leases grant the lessee the right to extract any oil or natural gas that may be found on the lease. However, an oil and gas lease does not grant an unqualified right to development. Under the standard modern O&G lease (post-1984) and BLM’s § 3101.1-2 regulation (1988), BLM has made any development of the lease or the removal of oil or gas “subject to” a number of provisions that allow BLM to protect the natural environment.

Many of these retained rights are grounded in BLM’s mandatory environmental protection obligations. The lease provides that the holder’s extraction right is subject to the agency’s need to comply with its responsibilities under FLPMA and MLA, any other applicable laws, regulations, and formal orders in effect when the lease is issued. The § 3101.1-2 regulation further makes the lease subject to any “reasonable measures” the BLM might impose to reduce the adverse environmental impacts of development. BLM’s “reasonable measures” authority is specifically reserved by section 6 of the modern lease. BLM can use this authority to condition its approval of drilling projects on reasonable environmental protections. Conditions for protecting watersheds and habitat may include regulating the timing of operations and the siting and design of facilities, as well as specification of the rates of oil and gas development and production. BLM can even prohibit development if the environmental impacts are substantially different or greater than normal. In short, BLM has ample authority to regulate the time, place, and manner of drilling activities.

If BLM fully exercised that authority, it could considerably reduce the harms of mineral extraction on watersheds and habitat. It could dictate the pace of development, require directional drilling and “closed-loop” fluid systems, confine operations to prescribed areas, or even suspend lease development in the interest of conserving these resources.

 

IV. Recent Cases

 

A. Otero Mesa (10th Cir. 2009) – closing entire grassland to lease development

The 10th Circuit held that the BLM was required to analyze an alternative that imposed strict environmental protections in Mtn. Oil & Gas Ass’n v. Watt. It recently reaffirmed that holding in a case similar to TU’s facts here. In 1997, an exploratory well struck natural gas on the Otero Mesa. O&G companies responded by nominating over 250,000 acres in the area for federal leases, and BLM determined the increased development interest required a new resource management plan. BLM conducted a large-scale land management planning process for O&G development in Sierra and Otero Counties, where the Mesa is located. The plan-level EIS recommended opening the majority of the Mesa to development, subject to a stipulation that only 5% of the surface of the Mesa could be in use at any one time.

The EIS analyzed five possible alternative management schemes for development in the area, three of which were fully analyzed. The other two were eliminated without further analysis.

Both eliminated alternatives would have increased the level of environmental protection for the entire plan area beyond any of the fully analyzed alternatives. One would have imposed a blanket ban on minerals development leasing; the other, through a “no surface occupancy” (“NSO”) stipulation allowing minerals development only by slant drilling from non-BLM lands. These alternatives were “considered initially but eliminated prior to further analysis” based on BLM’s conclusion that adopting a plan which so limited development would be arbitrary and capricious under FLPMA’s multiple-use mandate. BLM also discounted one of the three alternatives analyzed in the Draft EIS, the “No-Action Alternative,” as inconsistent with its own policies.

Thus, BLM was left with two possible management schemes, “Alternative A” and “Alternative B.” Of the two, Alternative A placed fewer restrictions on development, and BLM selected it as the preferred alternative. Alternative A opened 96.9% of the plan area but placed limitations on possible development, subjecting 58.9% of the area to a combination of NSO stipulations, controlled surface use stipulations, and timing stipulations. More importantly, Alternative A subjected 116,206 acres of the Otera Mesa to an NSO provision limiting disturbances to any 5% of the surface area of a leased parcel at a given time, regardless of location. BLM crafted this NSO restriction “[t]o protect portions of the remaining desert grassland community by minimizing habitat fragmentation.”

BLM refused to consider closing the entire Otero Mesa to O&G development, because it believed that a complete restriction on drilling violated the concept of managing for multiple use.

The Tenth Circuit rejected that argument, and decided that an alternative of closing the entire Mesa fell within BLM’s statutory mandate. The FLPMA requires BLM to manage public lands under the principle of multiple use. “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.

 

The court emphasized that multiple use does not direct BLM to prioritize development over other uses. And it does not require that every use be accommodated on every piece of land. If all the competing demands reflected in FLPMA were focused on one particular piece of public land, in many instances only one set of demands could be satisfied. For example, “a parcel of land cannot both be preserved in its natural character and mined.” Accordingly, BLM’s multiple use duty did not mean that drilling must be allowed on the Mesa. Development is a possible use, which BLM must weigh against other possible uses – including conservation to protect environmental values, which are best assessed through the NEPA process. Because BLM had not assessed an alternative of closing the Mesa to drilling activities, it had failed to analyze an adequate range of alternatives.

In short, this case decided that an alternative of closing an entire area to lease development is consistent with BLM’s statutory purpose, and that the multiple use duty is not a sufficient reason to exclude more protective alternatives from consideration. Accordingly, Otero Mesa squares on all fours with the facts presented by TU in this memo, and can be cited as supporting authority.

 

B. Anglers of the Au Sable (D. Mich. 2008) – alternative to protect trout

The court in Anglers of the Au Sable considered BLM’s and the Forest Service’s obligations under NEPA where a company was seeking to drill exploratory wells. . The court found that the agencies failed to “objectively evaluate all reasonable alternatives” by not considering greater protections for trout habitat. The range of alternatives considered in the EIS was deficient for two reasons. First, the no action alternative was improperly rejected because the Forest Service felt it was obligated to approve drilling. The court held, however, that none of the Service’s authorities require approval of a leaseholder’s proposed mineral extraction, foreclose a decision of No Action, or place the Service’s objectives at odds with environmental preservation. Additionally, the court noted that the plain language of 43 C.F.R. § 3161.2, which directs BLM to require that operations protect environmental quality, “makes it clear that approval is not appropriate in all cases, particularly cases where the project poses a threat to environmental quality.”

Second, the agencies impermissibly limited the range of alternatives to only those that would meet [the O&G company’s] project objectives, rather than alternatives that might better serve the agencies’ [environmental] goals.” In short, Au Sable confirmed that the rights of a mineral leaseholder are subject to BLM’s environmental obligations. When operations are proposed on a lease, BLM must interpret and perform its obligations in light of the policies established by NEPA.

 

C. Oregon Natural Desert – resource management alternatives

BLM’s impact statement for its Southeast Oregon Resource Management Plan violated NEPA by failing to consider alternatives that would have closed more acreage to off-road vehicles.

The EIS analyzed seven alternatives. With regard to ORV use, the alternatives varied almost entirely by the amount of land allocated between open and limited-use categories. Importantly, BLM never considered closing a significant amount of land to ORVs, nor did it consider an option geared toward protecting wilderness values from ORV use. The most protective limited-use category restricted ORVs to existing routes in wilderness areas and imposed seasonal closures to protect wildlife. But every alternative exposed more land to some type of ORV use than was previously permitted. For example, BLM’s recommended alternative opened approximately 20,000 acres of previously closed land to some ORV use. With regard to grazing, BLM considered only one alternative with substantial restrictions, and did not consider limiting grazing in areas with wilderness characteristics outside of designated wilderness.

 

D. Northern Alaska – adequate range of alternatives

Environmental plaintiffs challenged the adequacy of the EIS prepared by the BLM for its plan to offer long term oil and gas leases in the NWPA of Alaska. The leases would enable the oil companies to undertake exploration to determine what sites could be developed for productive drilling. The Ninth Circuit determined that BLM had adequately examined a range of viable alternatives.

The plaintiffs argued that BLM violated NEPA by failing to consider an alternative proposed by the Audubon Society in developing its recommended course of action in the EIS. The Audubon alternative recommended that BLM add four new special areas and, therefore, make 35 percent of the high oil potential area unavailable for leasing. Although BLM chose not to consider the Audubon alternative itself, the preferred alternative it did adopt included some similar protections. The court decided that BLM’s explanation that the Audubon alternative as a whole was inconsistent with the NWPA project and statutory mandates, coupled with BLM’s willingness to incorporate several recommendations into the preferred alternative, was a sufficient explanation for its refusal to consider entire Audubon proposal. Since BLM adopted components of the Audubon alternative, the BLM adequately examined a range of viable alternatives in preparing the FEIS.

Significantly, the court also concluded that BLM can condition permits for drilling on implementation of environmentally protective measures, and it can reject a proposal altogether if a particularly sensitive area is sought to be developed and mitigation measures are not available.

 

V. Conclusion

 

In short, BLM is required to “take environmental values into account” in carrying out its regulatory functions for oil and gas development. It also has a substantive duty “minimize damage to . . . fish and wildlife habitat and otherwise protect the environment.” And given that the rights granted in an oil or gas lease are explicitly “subject to” BLM’s right to condition development for its environmental purposes, measures to protect watersheds and fish are consistent with the purpose and scope of any proposal to drill on a lease. Therefore, to the extent that these measures are feasible and effective, they are reasonable alternatives and should be fully analyzed in the EIS.

 

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