Defenders of Wildlife v. Bureau of Ocean Energy Mgmt.

• Decision Date: 22 June 2012
• Docket Number: Nos. 11–12598,11–12599.,s. 11–12598
• Citation: 23 Fla. L. Weekly Fed. C 1212,684 F.3d 1242
• Parties: DEFENDERS OF WILDLIFE, Center for Biological Diversity, Natural Resources Defense Council, Petitioners, v. BUREAU OF OCEAN ENERGY MANAGEMENT, United States Department of the Interior, Secretary, Department of the Interior, Director, Bureau of Ocean Energy Management, Regulation and Enforcement, Respondents, Shell Gulf of Mexico, Inc., American Petroleum Institute, State of Louisiana, Louisiana Department of Natural Resources, State of Alabama, Governor and the State of Mississippi, Intervenors. Gulf Restoration Network, Inc., Florida Wildlife Federation, Sierra Club, Inc., Petitioners, v. Bureau of Ocean Energy Management, Regulation and Enforcement, Secretary of the Department of Interior, Respondents, Shell Gulf of Mexico Inc., American Petroleum Institute, State of Louisiana, Louisiana Department of Natural Resources, State of Alabama, Governor and the State of Mississippi, Intervenors.
• Court: U.S. Court of Appeals — Eleventh Circuit

684 F.3d 1242

23 Fla. L. Weekly Fed. C 1212

DEFENDERS OF WILDLIFE, Center for Biological Diversity, Natural Resources Defense Council, Petitioners,

v.BUREAU OF OCEAN ENERGY MANAGEMENT, United States Department of the Interior, Secretary, Department of the Interior, Director, Bureau of Ocean Energy Management, Regulation and Enforcement, Respondents,Shell Gulf of Mexico, Inc., American Petroleum Institute, State of Louisiana, Louisiana Department of Natural Resources, State of Alabama, Governor and the State of Mississippi, Intervenors.

Gulf Restoration Network, Inc., Florida Wildlife Federation, Sierra Club, Inc., Petitioners,

v.Bureau of Ocean Energy Management, Regulation and Enforcement, Secretary of the Department of Interior, Respondents,Shell Gulf of Mexico Inc., American Petroleum Institute, State of Louisiana, Louisiana Department of Natural Resources, State of Alabama, Governor and the State of Mississippi, Intervenors.

Nos. 11–12598, 11–12599.

United States Court of Appeals,Eleventh Circuit.

June 22, 2012.

Monica K. Reimer, Earthjustice, Tallahassee, FL, for Plaintiff–Appellant.

Deirdre McDonnell, Center for Biological Diversity, Portland, OR, David Pettit, Stephen Zak Smith, Natural Resources Defense Council, Santa Monica, CA, Catherine M. Wannamaker, Southern Environmental Law Ctr., Atlanta, GA, Sierra B. Weaver, Defenders of Wildlife, Washington, DC, for Petitioners in No. 11–12598.

David G. Guest, Alisa A. Coe, Earthjustice, Tallahassee, FL, for Petitioners in No. 11–12599.

David C. Shilton, U.S. Dept. of Justice, Environmental & Natural Res. Div., Dennis Daughtry, Lars Herbst, U.S. Dept. of Interior—Office of the Sol., Eric Holder, Jr., U.S. Atty. General's Office, Washington, DC, Michael Thomas Gray, U.S. Dept. of Justice c/o US Army Corps of Engineers, Jacksonville, FL, for Respondents.

Steven J. Rosenbaum, Covington & Burling, LLP, New York City, Elizabeth Baker Murrill, Ryan M. Seidemann, Atty. General's Office, Baton Rouge, LA, Alida C. Hainkel, Carl D. Rosenblum, Jones Walker, New Orleans, LA, Chilton Varner, Lewis Bondurant Jones, King & Spalding, LLP, Atlanta, GA, Katherine L. Rhyne, King & Spalding, LLP, Washington, DC, Peter W. Cleveland, Atty. General's Office, Jackson, MS, for Intervenors.

R. Ted Cruz, Morgan Lewis & Bockius, LLP, Houston, TX, for Chamber of Commerce of the United States of America, Amicus Curiae.

Petitions for Review of a Decision of the Department of the Interior.

Before DUBINA, Chief Judge, EDMONDSON, Circuit Judge, and RESTANI, ^* Judge.

DUBINA, Chief Judge:

This case concerns a challenge to an exploratory drilling plan under the Outer Continental Shelf Lands Act (“OCSLA”). 43 U.S.C. § 1331 et seq. The Bureau of Ocean Energy Management¹ (“BOEM”) approved the Shell Exploration Plan S–7444 (“Shell EP”) to conduct drilling in the Gulf of Mexico. The Shell EP covers ten exploratory wells on offshore Alabama leases in the Central Gulf of Mexico between 7,100 and 7,300 feet deep. This case is a consolidated appeal in which Petitioners, Defenders of Wildlife, et al. and Gulf Restoration Network, et al. (“Petitioners”), filed comments on the Shell EP, participated in the administrative proceeding below, and filed this petition for review. See 43 U.S.C. § 1349(c)(2). The only issues on petition for review are whether the Shell EP violates the National Environmental Policy Act (“NEPA”), 42 U.S.C. § 4332 et seq., and the Endangered Species Act (“ESA”), 16 U.S.C. § 1536 et seq. After reviewing the record, reading the parties' briefs, and having the benefit of oral argument, we deny the petition for review.

I. Background

(A) Agency Proceedings

OCSLA governs federal offshore oil and gas leasing, exploration, and development, and gives the Secretary of the Interior authority over the administration of offshore leasing. 43 U.S.C. § 1331 et seq.,43 U.S.C. § 1334(a). The Secretary delegated the authority to “regulate oil, gas, and sulphur exploration, development, and production operations on the Outer Continental Shelf (OCS)” to the BOEM. 30 C.F.R. § 550.101. OCSLA uses a four-stage process for oil and gas development, with review at each stage: (1) preparation of a leasing program; (2) lease sales; (3) exploration by the lessees; and (4) development and production. See Sec'y of the Interior v. California, 464 U.S. 312, 337–40, 104 S.Ct. 656, 669–71, 78 L.Ed.2d 496 (1984). During the first stage, the Secretary prepares a five-year OCS oil and gas lease-sale schedule and completes an environmental impact statement (“EIS”). 43 U.S.C. § 1344(a), (b)(3). In the second stage, the Secretary conducts lease sales on tracts of the OCS. 43 U.S.C. § 1337. The lessee then has the exclusive right to submit an exploration plan for approval during the third stage. 43 U.S.C. § 1340(c). If the exploration is successful, the lessee can submit development and production plans for the Central and Western Gulf of Mexico. 43 U.S.C. § 1351. The stage at issue in this proceeding is the third stage, exploratory drilling.

A leaseholder must submit an exploration plan for approval by BOEM. See 43 U.S.C. § 1340(c)(1). BOEM is required to approve, approve with modifications, or deny a plan within 30 days of submission. See id. BOEM may allow exploration to proceed and issue a permit for drilling if the lessee's plan “will not be unduly harmful to aquatic life in the area, result in pollution, create hazardous or unsafe conditions, unreasonably interfere with other uses of the area, or disturb any site, structure, or object of historical or archeological significance.” 43 U.S.C. § 1340(g)(3). The exploration plan must also comply with all other applicable laws, including NEPA and ESA. See 42 U.S.C. § 4332; 16 U.S.C. § 1536(a).

(1) Compliance with NEPA

NEPA requires all federal agencies to prepare an environmental assessment (“EA”) and EIS on the environmental effects of proposed federal agency actions. See 42 U.S.C. § 4332. All “major Federal actions [that] significantly affect[ ] the quality of the human environment” require an EIS. 42 U.S.C. § 4332(C). A less exhaustive EA can be used to determine whether the proposed action may significantly affect the environment and whether an EIS is required. See 40 C.F.R. § 1508.9. An EIS is not required if the agency makes a finding of no significant impact (“FONSI”) that identifies reasons why the proposed action will not have a significant impact on the environment. 40 C.F.R. §§ 1501.4(e), 1508.13.

BOEM applies NEPA procedures using a tiered process encouraged by the Council on Environmental Quality's (“CEQ”) regulations implementing NEPA. The CEQ regulations seek to avoid repetitive discussions and urge that:

Whenever a broad environmental impact statement has been prepared (such as a program or policy statement) and a subsequent statement or environmental assessment is then prepared on an action included within the entire program or policy (such as a site specific action) the subsequent statement or environmental assessment need only summarize the issues discussed in the broader statement and incorporate discussions from the broader statement by reference and shall concentrate on the issues specific to the subsequent action.

40 C.F.R. § 1502.20. The Shell EA “tiers” from two prior EIS's: the 2007 Multisale EIS covering eleven Gulf lease sales in the 2007–2012 Multisale and the 2009 supplemental EIS for seven remaining lease sales in the 2007–2012 Multisale. In 2007, MMS, BOEM's predecessor, finalized an EIS covering the Western and Central Gulf areas. The 2007 EIS analyzed expected impacts of oil and gas exploration, including possible oil spills. It found large oil spills to be low-probability events and determined that environmental impacts would not be catastrophic to the region, animal populations, and ecosystems. The 2009 supplemental EIS found that relevant new information did not change the conclusions from the 2007 multisale EIS.

In response to the April 2010 Deepwater Horizon disaster,² BOEM commenced the process to prepare a supplemental EIS for the remaining lease sales in the Gulf under the 2007–2012 Multisale. See 75 Fed.Reg. 69,122–01 (Nov. 10, 2010). The final supplemental EIS was issued on January 20, 2012. 77 Fed.Reg. 2,991–02 (Jan. 20, 2012). BOEM concluded that “[n]o substantial new information, with the exception of archaeological resources [related to historic shipwrecks], was found that would alter the impact conclusions as presented in the Multisale EIS and the 2009–2012 Supplemental EIS ....” BOEM, Gulf of Mexico OCS Oil and Gas Lease: 2012, Final Supplemental Environmental Impact Statement, Vol. I at x (Jan. 2012).

Prior to the Deepwater Horizon disaster, BOEM generally did not prepare EA's when approving exploration plans in the Western and Central Gulf of Mexico under leases studied in previous EIS's. After the spill, the Director of BOEM instructed the agency to restrict its use of categorical exclusions for exploration plans that proposed activity that would require approval of an application for a permit to drill and involve the use of a subsea Blow Out Preventer (“BOP”) or surface BOP.³ Categorical exclusions are “a category of actions which do not individually or cumulatively have a significant effect on the human environment ... and for which, therefore, neither an environmental assessment nor an environmental impact statement is required.” 40 C.F.R. § 1508.4. Accordingly, BOEM prepared a site-specific EA for the Shell EP.

(2) Compliance with ESA

The ESA requires federal agencies to ensure that their actions are “not likely to jeopardize the continued existence of any endangered species or threatened species.” 16 U.S.C. § 1536(a)(2). If a proposed federal action may affect an endangered species, the agency proposing the action must consult with the appropriate expert agency, either the Fish and Wildlife Service (“FWS”) or the National Marine Fisheries Service (“NMFS”). See 50 C.F.R. § 402.14(a). The agency proposing the...