Village of False Pass v. Clark

• Decision Date: 24 May 1984
• Docket Number: Nos. 83-3989,83-4003 and 83-4036,83-3990,s. 83-3989
• Citation: 733 F.2d 605
• Parties: , 14 Envtl. L. Rep. 20,398 VILLAGE OF FALSE PASS, et al., Plaintiffs-Appellants, Cross-Appellees, v. William C. CLARK, et al., Defendants-Appellees, Cross-Appellants, Amoco Production Company, et al., Intervenors.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 605

733 F.2d 605

20 ERC 1705, 14 Envtl. L. Rep. 20,398

VILLAGE OF FALSE PASS, et al., Plaintiffs-Appellants, Cross-Appellees, v. William C. CLARK, et al., Defendants-Appellees, Cross-Appellants, Amoco Production Company, et al., Intervenors.

Nos. 83-3989, 83-3990, 83-4003 and 83-4036.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 6, 1984.

Decided March 12, 1984.

Rehearing and Rehearing En Banc Denied May 24, 1984.

Eric Smith, Trustees for Alaska, Anchorage, Alaska, Lynne Edgerton, Sarah Chasis, Natural Resources Defense Council, New York City, for plaintiffs-appellants.

Carl J.D. Bauman, Joe Loescher, Hughes, Thorsness, Gantz, Powell & Brundin, Anchorage, Alaska, David C. Shilton, Dept. of Justice, Washington, D.C., E. Edward Bruce, John T. Smith, II, Covington & Burling, Washington, D.C., for intervenors.

Appeal from the United States District Court for the District of Alaska.

Before KILKENNY, WALLACE and CANBY, Circuit Judges.

WALLACE, Circuit Judge:

The Village of False Pass, another village, one individual, and eight organizations (Village) appeal from a denial, in part, of summary judgment in their action for declaratory and injunctive relief against the Secretary of the Interior's (Secretary) proposed sale of oil leases in the St. George Basin of the Bering Sea. The Secretary and various intervenor oil companies cross-appeal the partial summary judgment and an injunction against them. The case involves an important marine environment, rare whales, large sums of money, a search for increasingly scarce energy resources, and three basic statutory schemes: the Outer Continental Shelf Lands Act, 43 U.S.C. Sec. 1331 et seq. (OCSLA), the National Environmental Policy Act of 1969, 42 U.S.C. Sec. 4321 et seq. (NEPA), and the Endangered Species Act of 1973, 16 U.S.C. Sec. 1531 et seq. (ESA). We have jurisdiction under 28 U.S.C. Sec. 1291, and affirm the ruling on appeal. We do not reach the ruling on cross-appeal.

I

The St. George Basin, located off the west coast of Alaska in the Bering Sea, is a rich and diverse marine area, home to many animals and "the gateway to virtually every marine mammal, fish, and bird species moving between the North Pacific and the Bering Sea." Village of False Pass v. Watt, 565 F.Supp. 1123, 1129 (D.Alaska 1983). It may also hold large oil and gas reserves, perhaps 1.12 billion barrels of extractable oil. Id. at 1139. Although the chances of discovering such commercial quantities of oil or gas are about 28% and 37% respectively, id. at 1130, the oil companies bidding on St. George Basin leases are willing to spend almost a half-billion dollars for the right to investigate those chances on the specific parcels of Lease Sale 70.

The planning for Lease Sale 70 began in 1979 when the Department of the Interior's Bureau of Land Management requested resource reports from various agencies about oil and gas leasing in the St. George Basin. In early 1980, the Secretary designated 479 parcels as Lease Sale 70, and by the fall of 1981 he had prepared a Draft Environmental Impact Statement for the sale. In the summer of 1982, the Secretary asked the National Marine Fisheries Service (Fisheries Service) to prepare a Final Biological Opinion about the effects of the proposed lease sale on fish and marine mammals. That December, the Secretary issued a Final Environmental Impact Statement (Final Statement) that included information from several agencies' impact studies, among them preliminary biological studies from the Fisheries Service. Although the Final Statement provided two sets of oil spill analyses, one for spills over 1,000 barrels and one for spills of 10,000 barrels or more, it did not provide an explicit worst case analysis for oil spills of 100,000 barrels.

On March 7, 1983, the Secretary signed a Final Notice of Sale for Lease Sale 70. The Final Notice did not require any particular seasonal drilling or exploration restrictions, although several interested parties had suggested them. It did inform potential lessees that the Secretary retained power to impose such restrictions. Two days later the Secretary received the Fisheries Service's Final Biological Opinion. The Opinion recommended that "exploratory drilling and associated activities should be conducted ... only at times and in locations where [the Department of the Interior] can ensure these areas will remain free of spilled oil" and that the Secretary plan seismic testing both preliminary to and during exploration to avoid adverse effects on gray and right whales.

Soon after the Final Notice issued, the Village sued to declare that the Secretary acted arbitrarily and that his decisions were based on inadequate information, and to enjoin the lease sale. It claimed, among other things, that the lease sale decision violated ESA because the decision took place two days before receipt of the Fisheries Service's Final Biological Opinion; violated ESA because the decision did not include specific drilling and seismic testing limitations to protect endangered gray and right whales; and violated NEPA because the Final Statement did not include a worst case analysis of "large" or "major" oil spills, and the impact of Lease Sale 70 on the resources of the St. George Basin, including whales. After some initial proceedings, the Village, the Secretary, and the intervenors all moved for summary judgment, which the district court granted in part and denied in part to each.

In his Order following summary judgment, the district judge enjoined execution of leases under the lease sale until the Secretary prepared either a worst case analysis or supplemental environmental impact analysis of the effects of seismic testing before the exploration stage on gray and right whales, reconsidered his Final Notice of Sale after that analysis, and included in the Final Notice or another order either the Fisheries Service's suggested reasonable and prudent exploration and drilling restrictions to protect the whales, or a justification of why such restrictions were unnecessary. Village of False Pass v. Watt, 565 F.Supp. at 1165-66.

On appeal, the Village argues first that the district court erred in not finding the Secretary violated the "inter-agency consultation" and "best available data" requirements of ESA by issuing a Final Notice of Sale two days before receiving the Fisheries Service's Final Biological Opinion. Second, it claims the district court erred by failing to require the Secretary to adopt "concrete measures" at the lease sale stage, such as tract deletion or seasonal drilling restrictions, to protect gray and right whales under ESA from oil spills and seismic testing. Finally, the Village argues the district court improperly refused, under NEPA, to require a worst case analysis at the lease sale stage of "the effects" of oil and gas activity on all species in the St. George Basin. Although it did not initially limit its argument to the need for a worst case analysis of a 100,000 barrel spill, in its briefs and at oral argument the Village acknowledged it seeks only worst case analyses of a "major oil spill" of 100,000 barrels or more. Cross-appealing, the Secretary and the intervenor oil companies argue that the district court erred under NEPA in requiring a worst case analysis, or supplemental environmental analysis, of impacts of seismic surveys preliminary to the exploration stage on gray and right whales. We will address the Village's arguments under ESA, and then the NEPA claims. Before doing so, however, we describe the larger context of the appeals: the structure of oil and gas exploration under OCSLA.

II

The Supreme Court recently explained the basic structure of OCSLA in Secretary of the Interior v. California, --- U.S. ----, 104 S.Ct. 656, 78 L.Ed.2d 496 (1984). Three of the four statutory stages identified by the Court for developing an offshore oil well concern us: lease sales, see 43 U.S.C. Sec. 1337(a); exploration, see 43 U.S.C. Sec. 1340(b); and development and production, see 43 U.S.C. Sec. 1351(a). See generally Secretary of the Interior v. California, --- U.S. at ----, 104 S.Ct. at 669. These stages are separate and distinct. As the Court stated, "by purchasing a lease, lessees acquire no right to do anything more. Under the plain language of OCSLA, the purchase of a lease entails no right to proceed with full exploration, development, or production ... the lessee acquires only a priority in submitting plans to conduct those activities. If these plans, when ultimately submitted, are disapproved, no further exploration or development is permitted." Id.; see also id. at ----, 104 S.Ct. at 671. "Each stage involves separate regulatory review that may, but need not, conclude in the transfer to lease purchasers of rights to conduct additional activities on the OCS." Id. at ----, 104 S.Ct. at 669. Although the present case applied OCSLA in a different factual situation, there is no doubt that we are bound by the Court's analysis of OCSLA.

In prescribing this structure for oil and gas leasing, OCSLA makes no direct reference to ESA. The general provision on enforcement of environmental standards simply specifies that "in enforcement of safety, environmental, and conservation laws and regulations, the Secretary shall cooperate with the relevant departments and agencies ...." 43 U.S.C. Sec. 1334(a). Cf. 43 U.S.C. Sec. 1866(a) (OCSLA, unless expressly provided, does not modify other laws). The Secretary must cooperate in enforcement, as OCSLA provides, but ESA applies of its own force and effect. See, e.g., Secretary of the Interior v. California, --- U.S. at ----, 104 S.Ct. at 670 (ESA applies at lease sale stage).

OCSLA does make reference to NEPA, however. See 43 U.S.C. Secs. 1331(p), 1344(b)(3), 1346(a) (by implication), 1351(e)-(h), (k). It specifically does not limit NEPA's basic application, see 43 U.S.C. Sec. 1866; instead, the two statutory schemes are complementary. In ...