A federal court has ordered the Interior Department to provide better explanation to justify approval of two Gulf of Mexico oil and gas lease sales held in 2018.
The Aug. 30 decision did not vacate the sales, which means companies can continue working on plans they have for tracts won in Lease Sales 250 and 251. However, the court required Interior’s Bureau of Ocean Energy Management (BOEM) to respond to criticisms of the work of its sister agency, the Bureau of Safety and Environmental Enforcement (BSEE).
The National Environmental Policy Act (NEPA) mandates that government agencies provide reasonable responses to legitimate questions or criticisms of regulatory actions, such as lease sales. Courts often get the final say on what is reasonable and legitimate.
In this case, a three-judge panel of the US Court of Appeals for the District of Columbia Circuit ruled that BOEM should have responded to a Government Accountability Office (GAO) report that faulted policies and procedures of BSEE. The GAO report said BSEE failed to develop “criteria to guide how it uses enforcement tools” and that this contributed to inconsistencies and uncertainties about oversight.
BOEM insisted BSEE conducted “rigorous enforcement programs,” but the appeals court said BOEM failed to consider whether BSEE work was, in fact, rigorous in light of GAO’s criticisms.
Much money at stake
The Sierra Club, the Center for Biological Diversity, and the Gulf Restoration Network sued, and Interior defended itself with support from the American Petroleum Institute and Chevron USA Inc. Interior won at the district court level but lost in the appeals court. The case is Gulf Restoration Network v. Haaland.
Interior received more than $300 million in high bids in the two lease sales. Chevron paid roughly $50 million on 29 leases and like the other winning bidders has been paying rental fees for its leases.
Three environmental impact statements (EISs) put together by BOEM were relevant to the case: the programmatic EIS for the 5-year leasing program that included the 2018 lease sales, the multisale EIS for the sales, and a supplemental EIS for the sales.
After a commenter raised the issue of the GAO report at the programmatic stage, “BOEM promised to address the asserted deficiencies at the leasing stage,” the appeals court opinion said. “But it later reneged, telling commenters that the issues were outside the scope of the EISs at that stage.”
In court, Interior argued that the GAO report did not raise significant concerns. That may be, but BOEM should have explained its position in an EIS, the appeals court said.
The court said it would not vacate the leases because BOEM had made a sufficient argument that when it responds to the GAO report in greater detail, the result should not change the outcomes of the EISs and the decisions to hold the sales.
The opinion was written by Judge Gregory Katsas, with agreement from Judges Robert Wilkins and Ketanji Brown Jackson.
