The Ninth Circuit vacated U.S. Department of the Interior approvals for a proposed offshore oil drilling and production facility in Alaska after finding its EIS improperly failed to consider impacts associated with foreign oil consumption and the U.S. Fish and Wildlife Service’s Biological Opinion relied on overly vague mitigation measures and improperly failed to quantify the project’s nonlethal take of polar bears. Center for Biological Diversity v. Bernhardt, 982 F.3d 723 (9th Cir. 2020).

Conservation groups challenged the Bureau of Ocean Energy Management’s (BOEM) approval of the “Liberty Project,” which proposes to produce crude oil from Foggy Island Bay off the northern coast of Alaska, for failure to comply with procedural requirements of NEPA, the ESA, and the Marine Mammal Protection Act (MMPA).  Project proponents estimated that the Project would produce approximately 120 million barrels of crude oil over a period of fifteen to twenty years.  To do so, the Project would require construction of various new facilities including an offshore gravel island, wells, a pipeline to transport the oil, a gravel mine, and additional ice roads and crossings. The Project site is characterized by its ecological diversity and for providing habitat and food sources for threatened and endangered marine mammals, including polar bears.

EIS That Failed to Address Greenhouse Gas Emissions Resulting from Foreign Oil Consumption Violated NEPA

The Ninth Circuit was persuaded by one of two arguments raised by the conservation groups concerning BOEM’s compliance with NEPA.  The court held that BOEM had failed to analyze “indirect effects” of the Project as required by NEPA by arbitrarily failing to include emissions estimates resulting from foreign oil consumption in its analysis of the Project’s no-action alternative. Counterintuitively, the EIS had concluded that maintaining the status quo under the no-action alternative would result in greater air emissions of priority pollutants as compared with the Project because, BOEM said, the production gap would be filled with substitutes produced from countries with “comparatively weaker environmental protection standards.” However, the EIR did not quantify the purported change in foreign oil consumption. BOEM argued that it could not have summarized or estimated foreign emissions associated with changes in foreign consumption with accurate or credible scientific evidence.

The court rejected BOEM’s failure to either quantify downstream greenhouse gas emissions or to “thoroughly explain why such an estimate is impossible.” The court specifically faulted the EIR for failing to “summarize existing research addressing foreign oil emissions” and for ignoring “basic economics principles,” including changes to equilibrium price and demand effects of the Project. Moreover, the court declined to accord deference to BOEM’s economic analysis of greenhouse gas emissions, stating that “BOEM’s area of expertise is the management of ‘conventional (e.g. oil and gas) and renewable energy-related’ functions, including ‘activities involving resource evaluation, planning, and leasing.’” Based on these findings, the court found that the BOEM’s failure to address global emissions constituted an impermissible failure to evaluate reasonably foreseeable environmental impacts required to be analyzed under NEPA.
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