Appeals court dismisses effort to overturn drilling permits in New Mexico, Wyoming

The US Court of Appeals for the D.C. Circuit dismissed an effort to overturn more than 4,000 oil and natural gas drilling permits in the Permian basin of southeast New Mexico and the Powder River basin of northeast Wyoming July 15, saying that the environmental groups bringing the lawsuit failed to show a direct link between the permits and environmental harm.

The three-judge panel upheld a lower court decision that found the plaintiffs lacked standing. Still, it did not rule on the merits of the case, the Center for Biological Diversity (the Center) et al v. US Department of Interior.

“The point is not that we question whether the asserted harmful effects extend beyond the specific well sites, but that plaintiffs have provided no information at all as to how far they typically extend,” Circuit Judge Cornelia Pillard wrote for the court.

The environmental groups sued the government, claiming that the Bureau of Land Management (BLM) granted 4,019 permits to drill on federal lands from January 2021 to August 2022 without adequately considering the climate and environmental justice impacts of the wells.

Oil and gas industry associations, companies holding the challenged permits, and the state of Wyoming intervened to defend BLM’s permit approvals, with the lower court dismissing the case because the groups did not show “concrete and particularized injury” linked to the permits.

The Center and the other groups appealed, submitting affidavits from members in the general vicinity suffering injuries to their health, safety, and recreational and aesthetic interests.

“Plaintiffs have failed to sufficiently link those harms to the discrete agency actions they seek to reverse,” the court ruled. “Rather than explain how one or more of the challenged permits would likely injure them…plaintiffs have instead pursued an all-or-nothing theory that claims standing to challenge all the permits in the aggregate.”

The environmental groups also asserted standing based on calculations of the wells’ overall contribution to global climate change. The court said that theory is also “barred by our precedent. We therefore affirm the district court’s judgment of dismissal.”

“This is a major victory for Wyoming’s oil and natural gas industry—not only in securing the 1,000 permits affected in Wyoming but also in setting an important precedent,” said Petroleum Association of Wyoming president Pete Obermueller in a statement. Future challenges, he said, “must demonstrate actual harm tied to specific projects, not rely on vague or generalized claims.”

The court said the plaintiffs must establish standing for each permit since each is a distinct agency action.

The appeals court said its decision did not obligate the environmental groups to “submit a voluminous complaint featuring separate, duplicative allegations” for each of the 4,000 challenged wells.

“If Plaintiffs are correct that BLM has failed to properly account for the cumulative impacts of the wells—and we take no position on the merits of Plaintiffs’ arguments at this stage of the proceedings—that might mean that each of the challenged permits violates [the National Energy Policy Act] for the same reason, such as a failure to consider the ‘incremental effects of the action when added to the effects of other past, present and reasonably foreseeable actions.’ Even if the challenged permits all suffer from the same legal defect, however, the Constitution requires plaintiffs to demonstrate an injury linked to each distinct federal action.”