Native Vill. of Hope v. Salazar

• Decision Date: 25 May 2012
• Docket Number: Nos. 11–72891,11–72943.,s. 11–72891
• Citation: 2012 Daily Journal D.A.R. 6978,74 ERC 1801,680 F.3d 1123
• Parties: NATIVE VILLAGE OF POINT HOPE; Alaska Wilderness League; Center for Biological Diversity; Defenders of Wildlife; Natural Resources Defense Council; National Audubon Society, Inc.; Northern Alaska Environmental Center; Oceana; Pacific Environment; Resisting Environmental Destruction on Indigenous Lands, Redoil; Sierra Club; The Wilderness Society, Inc.; Greenpeace, Inc., Petitioners, v. Kenneth Lee SALAZAR, Secretary of the Interior; Bureau of Ocean Energy Management, Regulation and Enforcement, Respondents, State of Alaska; Shell Offshore, Respondents–Intervenors. Inupiat Community of the Arctic Slope, Petitioner, v. Kenneth Lee Salazar, Secretary of the Interior; Bureau of Ocean Energy Management, Regulation and Enforcement, Respondents, State of Alaska; Shell Offshore Inc., Respondents–Intervenors.
• Court: U.S. Court of Appeals — Ninth Circuit

680 F.3d 1123

74 ERC 1801

2012 Daily Journal D.A.R. 6978

NATIVE VILLAGE OF POINT HOPE; Alaska Wilderness League; Center for Biological Diversity; Defenders of Wildlife; Natural Resources Defense Council; National Audubon Society, Inc.; Northern Alaska Environmental Center; Oceana; Pacific Environment; Resisting Environmental Destruction on Indigenous Lands, Redoil; Sierra Club; The Wilderness Society, Inc.; Greenpeace, Inc., Petitioners,

v.Kenneth Lee SALAZAR, Secretary of the Interior; Bureau of Ocean Energy Management, Regulation and Enforcement, Respondents,State of Alaska; Shell Offshore, Respondents–Intervenors.

Inupiat Community of the Arctic Slope, Petitioner,

v.Kenneth Lee Salazar, Secretary of the Interior; Bureau of Ocean Energy Management, Regulation and Enforcement, Respondents,State of Alaska; Shell Offshore Inc., Respondents–Intervenors.

Nos. 11–72891, 11–72943.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 15, 2012.

Filed May 25, 2012.

Holly A. Harris (argued), Earthjustice, Juneau, Alaska; Christopher Winter, Crag Law Center, Portland, Oregon, for petitioners Native Village of Point Hope, et al. and Inupiat Community of the Arctic Slope.

David C. Shilton (argued), U.S. Department of Justice, Washington, D.C., for respondent Ken Salazar, Secretary of the Interior, and Bureau of Ocean Management.

Kathleen M. Sullivan (argued), Quinn Emanuel Urquhart & Sullivan, LLP, New York, New York; Kyle W. Parker, Crowell & Moring LLP, Anchorage, Alaska, for respondent-intervenor Shell Offshore Inc., et al.

Rebecca Kruse, State of Alaska Department of Law, Anchorage, Alaska, for respondent-intervenor the State of Alaska.

On Petition for Review of a Final Agency Action Bureau of Ocean Energy Management.

Before: ALEX KOZINSKI, Chief Judge, CARLOS T. BEA and SANDRA S. IKUTA, Circuit Judges.

OPINION

IKUTA, Circuit Judge:

In these expedited petitions for review, we consider the allegations of Native Village of Point Hope et al. and Inupiat Community of the Arctic Slope (collectively, “petitioners”) that the Bureau of Ocean Energy Management (BOEM) failed to discharge its obligations under the Outer Continental Shelf Lands Act (OCSLA) in approving Shell Offshore Inc.'s plan for exploratory oil drilling in the Beaufort Sea. We have jurisdiction pursuant to 43 U.S.C. § 1349(c), and we deny the petitions.¹

I

This case is the latest chapter in a long-running saga beginning back in April 2002, when the Minerals Management Service (MMS) ² established a five-year lease sale schedule for the outer continental shelf of Alaska. Alaska Wilderness League v. Kempthorne, 548 F.3d 815, 817–18 (9th Cir.2008), vacated,559 F.3d 916 (9th Cir.2009), dismissed as moot sub nom., Alaska Wilderness League v. Salazar, 571 F.3d 859 (9th Cir.2009). Indeed, this is the third time the government has appeared before us to defend its approval of Shell's exploration plan against challenges by many of these same petitioners. We begin by describing the legal framework and factual background for these challenges.

A

In enacting the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. §§ 1331–1356a, Congress authorized the Secretary of the Interior to lease portions of the outer continental shelf to qualified bidders for the purpose of exploring and developing its oil and gas reserves. Under OCSLA, the Secretary begins by holding a lease sale to identify qualified bidders. Id. §§ 1337, 1344(a). Becoming the successful bidder in a lease-sale auction is merely the first step. Before undertaking exploration activities in the leased area, the winning bidder must obtain the Secretary's approval of an exploration plan, id. § 1340(c)(1), and obtain many other permits and approvals. ³ If, after completing such exploration activities, the leaseholder concludes there is potential for developing oil and gas reserves on the leased area, the leaseholder must obtain approval of a development and production plan, id. § 1351(a)(1), as well as obtaining a new round of permits and approvals before pursuing development of the leased area.

Only the exploration plan stage and the leaseholder's obligations under OCSLA are at issue here. In general, the applicable regulations require the leaseholder to submit specified information about its proposed exploration plan. 30 C.F.R. § 550.211–228. Within thirty days of the leaseholder's submission or last modification of the exploration plan, the Secretary “shall approve” the plan if it is consistent with OCSLA, its implementing regulations, and the applicable lease, 43 U.S.C. § 1340(c)(1), unless the Secretary determines that the proposed activity “would probably cause serious harm or damage to life ..., to property, to any mineral ..., to the national security or defense, or to the marine, coastal, or human environment,” id. § 1334(a)(2)(A)(i), and that “such proposed activity cannot be modified to avoid such condition,” id. § 1340(c)(1); see also30 C.F.R. § 550.233.

While OCSLA focuses on development of the outer continental shelf, the Clean Water Act § 311, as amended by the Oil Pollution Act of 1990, focuses on the prevention of and response to oil spills. See33 U.S.C. § 1321. Among other things, § 311 requires a leaseholder to submit an oil spill response plan, which is “a plan for responding, to the maximum extent practicable, to a worst case discharge, and to a substantial threat of such a discharge, of oil or a hazardous substance.” Id. § 1321(j)(5)(A)(i). Offshore facilities “may not handle, store, or transport oil unless” the leaseholder's oil spill response plan “has been approved by the President” and the “facility is operating in compliance with the plan.” Id. § 1321(j)(5)(F)(i)–(ii).

At the time Shell began its leasing and exploration efforts, MMS was in charge of conducting lease sales, reviewing exploration plans under OCSLA, and approving oil spill response plans under § 311 of the Clean Water Act. Following the Deepwater Horizon oil spill in the Gulf of Mexico in early 2010, the Secretary divided MMS's responsibilities among three new regulatory entities in order to separate the “three distinct and conflicting missions” of (1) promoting resource development, (2) enforcing safety regulations, and (3) maximizing revenues from offshore operations. Press Release, U.S. Dep't of the Interior, Salazar Divides MMS's Three Conflicting Missions (May 19, 2010), available at http:// www. doi. gov/ news/ pressreleases/ Salazar– Divides– MMSs– Three– Conflicting– Missions. cfm; see also76 Fed.Reg. 64,432; DOI Secretarial Order No. 3299. In the reorganization, the Secretary made BOEM responsible for managing the development of offshore resources, including approving a leaseholder's exploration plan under OCSLA and conducting an environmental analysis of that plan under the National Environmental Policy Act (NEPA). See76 Fed.Reg. at 64,432. The Secretary made the Bureau of Safety and Environmental Enforcement (BSEE) responsible for enforcement of safety and environmental functions, including the oil spill response plan requirements in 30 C.F.R. pt. 254. See76 Fed.Reg. at 64,448.⁴ As the regulatory process now stands, BOEM and BSEE are independent entities with separate responsibilities.

B

Although a winning bidder in the Beaufort Sea lease sale in 2003, Shell has yet to commence exploration activities. In November 2006, Shell submitted an exploration plan for the Beaufort Sea region. Alaska Wilderness League, 548 F.3d at 818. MMS approved Shell's exploration plan in February 2007. Id. at 821. Some of the petitioners here, along with other groups, challenged MMS's approval, and a panel of this court issued a stay pending review, thereby preventing exploration in 2007 and 2008. See id. at 819–20. On November 20, 2008, the panel vacated and remanded MMS's approval. See id. at 835. After Shell filed a petition for rehearing en banc, we issued an order vacating and withdrawing the panel opinion. See Alaska Wilderness League, 559 F.3d at 916. Shortly thereafter, Shell withdrew its exploration plan, and in 2009 we granted Shell's motion to dismiss the petitions as moot. See Alaska Wilderness League, 571 F.3d at 859. In June 2009, Shell submitted a new exploration plan that proposed drilling at the Sivulliq and Torpedo prospects in the Beaufort Sea. MMS approved that plan, and in May 2010 we denied expedited petitions challenging that approval. See Native Vill. of Point Hope v. Salazar, 378 Fed.Appx. 747, 748 (9th Cir.2010) (mem.). Drilling did not commence, however, because soon after the approval the federal government suspended all drilling exploration activities in the Arctic in response to the Deepwater Horizon oil spill. U.S. Dep't of the Interior, Decision Memorandum Regarding the Suspension of Certain Offshore Permitting and Drilling Activities on the Outer Continental Shelf, July 12, 2010, at 1, available at http:// www. doi. gov/ deepwater horizon/ upload/ Salazar– Bromwich– July– 12– Final. pdf.

In May 2011, after the Secretary lifted the moratorium on drilling, Shell submitted a revised exploration plan to BOEM and a revised oil spill response plan to BSEE.⁵ In the revised exploration plan, Shell proposed drilling two wells at its Sivulliq prospect and two wells at its Torpedo prospect in the Beaufort Sea during the July 10 to October 31 drilling season. On August 3, 2011, after conducting a NEPA review of the drilling activities contemplated in the revised exploration plan, BOEM issued a Finding of No Significant Impact. The agency concluded “that no substantial questions remain regarding potentially significant impacts and that no potentially significant impacts are expected to occur as a result of the proposed activities.” Petitioners do not challenge these conclusions. On August 4, 2011, BOEM approved Shell's revised exploration plans subject to eleven conditions. Conditions 8 and 9 require Shell to make certain technical demonstrations concerning its oil spill response capabilities...