In Alaska Wilderness League v. Sally Jewell, 2015 U.S. App. LEXIS 9755, a coalition of environmental groups sued various administrative agencies following their approval of Shell Gulf of Mexico, Inc.’s (Shell’s) Oil Spill Response Plans (OSRPs) for their planned oil rigs in Alaska’s arctic coast.
OSRPs are mandated under a combination of both the Clean Water Act and Outer Continental Shelf Lands Act (OCSLA). OCSLA creates a four-step process for exploring and developing off-shore oil and natural gas resources. Notably, the third step requires applicants to submit an exploration plan for secretary approval along with an OSRP, which is required under the Clean Water Act.
The Clean Water Act provides the framework under which an OSRP must be prepared, including a requirement that the Bureau of Safety and Environmental Enforcement (BSEE) promulgate regulations requiring owners and operators of offshore facilities to submit an OSRP “for responding, to the maximum extent practicable, to a worst case discharge… of oil or a hazardous substance.” (33 U.S.C. § 1321, subd. (j)(5)(A)(i).) Under the Clean Water Act’s Compliance requirements, BSEE must then promptly review these plans, require amendments to any plan that does not meet the statutory requirements, and “shall” approve any plan that meets those requirements.
Here, the plaintiffs alleged that the BSEE unlawfully approved two of Shell’s OSRPs. Shell intervened and both sides filed for summary judgment. The district court granted summary judgment in favor of the defendants, and the plaintiffs appealed. On appeal, the plaintiffs argued: (1) BSEE’s OSRP approval was arbitrary and capricious under the Administrative Procedure Act (APA); (2) BSEE should have engaged in Endangered Species Act (ESA) consultation before approving the OSRPs; and (3) the OSRPs were subject to review under the National Environmental Protection Act (NEPA) before the agencies could approve them. The Ninth Circuit Court of Appeals (Court) disagreed, affirming the lower court’s decision in its entirety.
First, the plaintiffs argued BSEE’s OSRP approval was arbitrary and capricious under the Administrative Procedure act. They argued Shell assumed a 90 to 95 percent recovery rate in a worst case discharge event, and that recovery rate was unrealistic and unsupported. The court disagreed, finding that Shell claimed 10 percent of the oil would drive toward the mainland, not that all but 10 percent would be recovered. The court also found that Shell had the capacity to store up to 95 percent of the worst case scenario discharge volume, not that it would actually be able to collect that much.
Next, the plaintiffs argued BSEE should have engaged in ESA consultation before approving the OSRPs, since ESA section 7. The statute provides that BSEE “shall… approve any plan that meets the requirements” of the statute. (32 U.S.C. § 1321 subd. (j)(5)(E).) Pursuant to this requirement, BSEE claimed it lacked discretion to consider factors apart from the delineated statutory criteria and, as a result, ESA consultation was unnecessary. While the court concluded the statutory requirements applicable to OSRPs were ambiguous, the court deferred to BSEE’s reasonable interpretation. Thus, the court rejected the plaintiff’s ESA consultation argument. Lastly, the plaintiffs argued that BSEE violated NEPA because they failed to prepare an Environmental Impact Study (EIS) before approving the OSRPs. NEPA is subject to a “rule of reason” that frees agencies from preparing an EIS on actions they cannot refuse to perform. When an agency cannot prevent a certain effect due to its limited statutory authority over the action, the agency does not need to consider the environmental effects arising from that action. Here, since the court held BSEE had no discretion in approving or disapproving the OSRPs, the OSRPs did not require an EIS.
Justice D.W. Nelson dissented . Justice Nelson acknowledged that “[t]here is no point in consulting if the agency has no choices.” (Ctr. For Food Safety v. Vilsak (2013) 718 F.3d 829, 841.) However, Justice Nelson interpreted BSEE’s regulations and implementing statutes as providing BSEE with choices that allowed it to influence a private activity to benefit an endangered species. Therefore, Justice Nelson concluded BSEE’s action to approve an OSRP was discretionary and triggered ESA consultation.
Justice Nelson also concluded BSEE was required to prepare an EIS under NEPA. She argued BSEE had the necessary authority to trigger NEPA review because the Oil Pollution Act grants them significant authority to regulate offshore facilities and directs BSEE to consider environmental factors in its decision making process.
The approval of Oil Spill Response Plans by the Bureau of Safety and Environmental Enforcement is a nondiscretionary action that does not trigger Endangered Species Act consultation or necessitate an Environmental Impact Statement under NEPA.